Swept up in panic-selling because of Tuesday's coup, shares in Bangkok Metro Plc (BMCL) failed to stay above the initial public offering (IPO) price on debut yesterday and at one stage falling 19 per cent below it.

The stock was quoted at Bt1.10 at the opening bell, well below the IPO price of Bt1.31, and shortly afterwards fell to the day's trough of Bt1.06 before rebounding to close at Bt1.25, or 4.58 per cent lower than the IPO price.

The Stock Exchange of Thailand Index yesterday tumbled to close the day at 692.57, well off the bottom of 673 points.

Interestingly, there was a big lot transaction of 81.99 million shares in BMCL just a few minutes ahead of the curtain rising on the market. The price was Bt1.31, costing more than Bt107 million total.

BMCL managing director Sombat Kijjalak said the poor debut could be attributed to the steep fall in the stock market.

"Investors who understand what's going on prefer to hold the stock. But those who don't, and don't have enough information, may choose to sell. Also, Bangkok Metro is a non-dividend-payment stock, so it may not attract investors like other dividend stocks do," he said.

The subway operator recently raised Bt3.61 billion in its IPO of 2.76 billion shares. It also sold another batch of 2.99 billion new shares to its regulator, the Mass Rapid Transit Authority of Thailand (MRTA), at par value of Bt1 each.

Of the total IPO shares, 1.32 billion were new and 1.44 billion were existing shares once held by Ch Karnchang Plc.

Ch Karnchang president and CEO Plew Trivisvavet, said his firm intended to buy BMCL shares in a bid to recover its previous holding ratio of 50 per cent, which was diluted to 30 per cent by the share allocation.

"We'll increase our shareholding proportion to as close to 50 per cent as possible," he said. "The subway project is a good project, and in the future there will be more route expansions. This will benefit the company in its business expansion."

Plew said Ch Karnchang might buy BMCL shares from existing shareholders like Natural Park Plc or buy them in the stock market.

"It will depend on our Strategic Investment Department which investment method we apply," he said.

MRTA chairman Anchalee Chavanit said the authority borrowed Bt2.99 billion from the Government Savings Bank to pay for its BMCL shares. The MRTA now owns a 25-per-cent stake in Bangkok Metro.

The GSB loan matures in 5.2 years and carries a floating interest rate based on the lowest range of the bank's six-month time-deposit rate. It is guaranteed by the Finance Ministry.

Anchalee said holding BMCL stock would benefit the government in the long term, because the number of passengers would increase continuously, especially once properties being developed along the subway routes were completed.

"The MRTA will act like a representative of the government sector as well as be a business partner to BMCL. The authority will hold the stock for three years, in accordance with the silent-period agreement, just like other major shareholders, including Ch Karnchang and Bangkok Expressway," said Anchalee.

Siriporn Chanjindamanee

The Nation