The prospect for state enterprises going public this year are highly unlikely in light of the unsettled political situation and the fact that the Electricity Generating Authority of Thailand (Egat)'s listing plan was put on the shelf by the Supreme Administrative Court early last year.

However, privatisation will have to go ahead some time in the future.

The Supreme Administrative Court in March revoked the two royal decrees supporting Egat's privatisation. One decree highlighted the privatised entity's power and rights, the other the deadline when Egat's state-enterprise status would come to an end. The court ruled that the earlier transformation of the state agency into a public company was not legitimate.

The Supreme Court is now considering a bid by a consumer-rights group to nullify PTT's recent privatisation process. PTT was formerly known as the Petroleum Authority of Thailand.

The halting of Egat's privatisation and a petition to de-list PTT are expected to derail the privatisation plans of Egat's sister organisations, the Provincial Electricity Authority and the Metropolitan Electricity Authority.

CAT Telecom and TOT Corp privatisations are also frozen.

A five-year plan to privatise a number of state-enterprises was initiated by the first Thaksin administration in the hope that the large-market-cap state enterprises would boost the bourse's market capitalisation significantly.

PTT was the first state enterprise to go public under the plan. It listed on the stock market in late 2001 and was Thailand's largest IPO, with Bt32 billion capital raised until its subsidiary, Thai Oil, beat it in 2004.

The listing of PTT revitalised the stock market at the time and its share price has shot up over 500 per cent from its IPO price of Bt35 per share.

Despite the big success of the listing, the bonanza returns from PTT led to strong criticism that persons linked to politicians at that time received a large share of PTT's IPO share allocation.

Airports of Thailand (AOT) was the second privatised stock. It started trading on the stock market in early 2004 and it also offered handsome gains to those who subscribed to its IPO shares.

In late 2004, MCOT listed on the stock market. Like its predecessors, it provided large returns to its shareholders before the stock was battered by the resignation of former president Mingkwan Saengsuwan and a TV programme revamp.

Despite continuing strong protests against privatisation, Deputy Finance Minister Sommai Phasee recently said that privatisation plans would have to go ahead but their patterns would be "adapted" to the public's satisfaction.

Kongkiat Opaswongkarn, chief executive of Asia Plus Securities and chairman of the Federation of Thai Capital Market Organisations, said that the Supreme Court's ruling against Egat's privatisation would have a long-term impact on the Thai stock market and the country's economy as a whole.

 Egat's case will inevitably delay the privatisation of other state enterprises, he said.

 Without privatisation, the Stock Exchange of Thailand (SET) is likely to fail to meet its target of market capitalisation of Bt10 trillion over the next five years, as the number of newly listed firms is small and, most importantly, most of them have small market capitalisations.

However, he anticipates that privatisation will be resumed after the next government is established.

Stock exchange  chairman Vijit Supinit said that the stalled privatisation plans would slow the SET's drive to achieve its Bt10-trillion market cap target.

The Thai market's capitalisation is now Bt5 trillion.

Vijit threw his support behind privatisation, saying it would alleviate the government's burden and people would eventually benefit from it.

Phatra Securities CEO Suvit Mapaisansin commented that, in the absence of privatisation, the Thai bourse would lose its shine in the eyes of foreign investors. They now invest in around 20 out of the 400 listed companies.

 Listed companies' earnings growth is now the one aspect that attracts foreign investors, he added.

Kasikorn Securities chairman Rapee Sucharitakul commented that investors would lose confidence in the government's privatisation plan if any stocks privatised recently were de-listed.

Siriporn Chanjindamanee

The Nation