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Published on November 28, 2007

Its shares were dragged down by a general Stock Exchange of Thailand (SET) plunge in line with falls across the region.

Major Development ended the day at Bt4.42, while the SET Index closed down 1.18 per cent at 822.99 points, due to negative sentiment in foreign markets.

The newly listed land developer's stock initially jumped 10.64 per cent to Bt5.20 before falling sharply. Its trading value was Bt896.37 million.

CEO Suriyon Poolvoralaks said the stock had originally risen above its IPO price due to the firm's strong fundamentals and consistent income from land development.

During the IPO, the company experienced demand that was six times greater than the shares on offer, he said.

"[Despite the eventual lower-than-IPO price], I'm not worried about the first day's trading. Our fundamentals are very solid. I'm confident that performance this year and next will be in line with our targets. We are not worried about the overall negative market sentiment, as we had given some discount [on the IPO price] to investors already," Suriyon said.

He expects his company to record higher income than last year's Bt1.6 billion. In 2006, it recorded a net profit of Bt260 million.

Next year, the company will gradually record income from five projects worth a combined Bt7 billion to Bt8 billion, he added.

Paiboon Nalinthrangkurn, managing director of Tisco Securities - Major Development's arranger and underwriter - said if there had not been an overall negative effect on the bourse yesterday as a result of global market sentiment, the firm's stock would have risen impressively, as the IPO price provided a 30-per-cent discount from the book value for subscribers.

"But I did not expect Major Development's stock to rise 100 per cent, similar to some other stocks. The IPO price was reasonable. The price-to-earnings ratio is only 6, much lower than the industry's 10," Paiboon said.

The Nation