Local listed companies have increased capital by only Bt803.62 billion through public offerings over the past decade, significantly less than other regional bourses, says the Capital Market Research Institute.
A recent survey on ways to increase fund-mobilisation efficiency in secondary equity offerings showed Thai companies were more cyclical than those listed on other bourses in Southeast Asia.
"Influencing fund mobilisation in Thailand were political problems, uncertainty over government policies and the amount of leverage of other low-cost funding sources, such as bank borrowing and debenture issues," CMRI researcher Teerapon Lacharoj said yesterday.
Conditions also exist in Thailand that make it difficult to facilitate fund mobilisation, such as referencing par value when increasing a company's capital. Teerapon said that practice should be abolished, because par value did not reflect the actual value of an enterprise.
From 2005-08, the ratio of fund mobilisation via public offerings to market capitalisation of Thai listed firms was only 0.14 per cent per year. Those in Hong Kong, Singapore, Indonesia and Malaysia were 0.87 per cent, 0.68 per cent, 0.6 per cent and 0.31 per cent, respectively. Thailand had the lowest ratio.
Teerapon said Thai companies usually mobilised funds during upturns in the economy and stock market, while figures declined sharply during economic downturns. This differs from other listed firms in the region, which continue to mobilise funds even in times of economic downturn. During the first half of this year, no Thai listed company issued new shares, while those in Hong Kong mobilised US$14.874 billion (Bt496 billion) through the stock market, followed by $1.014 billion in Singapore, he said.
However, some foreign bourses that have cancelled referencing par value to determine a company's registered capital, such as Singapore, said listed firms there could not increase capital, due to stock prices that were lower than par value.
Other actions that should be taken include reducing the shareholders' proportion for approving increases in registered capital from 75 per cent to 50 per cent, said Teerapon.
He said that could make it easier for local listed firms to mobilise funds and thus increase competitiveness.
