DESPITE the gloom that set in over the market for initial public offerings (IPO) late last year, most investment experts expect more deals to come in this year – especially on the junior board Market for Alternative Investment (MAI).
So far this year, some 21 companies have filed the paperwork for IPO plans to the Securities and Exchange Commission (SEC). Of the total, seven plan to be listed on the Stock Exchange of Thailand (SET), with remaining 14 bound for the MAI.
Last year marked a five-year low in the number of listings on the Thai exchange. Of the 18 IPO deals in 2018, seven made their trading debuts on the SET, with the remaining 11 on the MAI. Combined, they notched a total market capitalisation, by IPO prices, of Bt127.05 billion.
SET senior executive vice president Manpong Senanarong believes more and bigger deals are coming this year, targeting the country's strengths in health, transport and food businesses.
MAI president Prapan Charoenprawat said the secondary board had set a goal of attracting 15 IPOs of sustainable-growth firms, startups and innovative companies with additional market capitalisation of about Bt20 billion. Now, 13 companies have submitted filings to the SET - three of which have been allowed to launch their share sales.
So far, about 200 companies are pressing ahead to tap the equity market after the MAI went out to educate targeted companies. About 15 firms, on average, are expected to be listed on the MAI each year.
Veena Lertnimitr, executive vice president of Siam Commercial Bank, is among others projecting an increase in the number of IPOs this year, citing the better investment environment. Some four or five of the bank’s customers – including those with interests in energy, food and property – are likely to be listed in the year, Veena said.
Soravis Krairiksh, deputy managing director of Bualuang Securities, shares the optimistic view for this year. Soravis forecasts the benchmark SET Index will rise to 1,820 points, with up to five customers to file for listings this year.
Anuwat Ruamsuke, head of capital markets at Phatra Securities, said that several firms have been preparing to tap the equity markets for a long period and some of the firm’s customers are drawing up their filing plans to go public.
It all depends on the stock market environment and concerns over the gloomy equities market could force some companies to delay their deals, he said.
Sompob Sakphanpanom, chairman of Asset Pro Management, expected no fewer than 25 IPO deals in 2019, with the outlook boosted by the likelihood of a general election this year. If the broader markets improve, more firms that want to raise capital for business expansion will file for IPO plans, Sompob said.
In 2019, as many as six of the company's customers will submit filings to the SEC, he said. Two of these firms will file to go public in the first quarter, with two or three of them in the second quarter and one in the fourth quarter.
The stock listing process takes about 120 days for approval and the environment for the IPOs is expected to improve after the general election takes place and a new government is installed, Sompob said, adding that negative external factors - including the US-China trade war - are likely to ease over the year.