Bank of Thailand Governor MR Pridiyathorn Devakula said if Temasek brings in additional foreign money to finance the tender offers, the exchange rate should not fluctuate that much.

“It’s still too tiny,” he told reporters.

Yesterday, the baht ended lower against the US dollar on continued baht sales following Monday’s news confirming the acquisition.

“The announcement of the Shin-Temasek deal ended the wave of strong baht demand and helped to consolidate the current surge,” a local trader told Dow Jones Newswires.

The dollar ended the Asian day at Bt39.31, up from Monday’s close of Bt39.215. The US unit slipped to an intra-day low of Bt39.10 in the morning and before climbing to Bt39.25 at noon.

Last week, the baht leapt in value against US dollar, reaching Bt38.98 on Friday, as Temasek brought in money to pay for the Bt73.3-billion acquisition announced on Monday. Last week, it was moving between Bt39.20 to Bt39.47.

BOT assistant governor Nitaya Pibulratnagit also noted that capital inflows likely ahead of a tender next week would probably have only a limited impact on the baht.

Temasek is required by local regulations to tender for outstanding shares in Shin and the holding companies are making a voluntary tender for shares of mobile-phone unit AIS not already held by Shin.

“Given the size of inflows for the big-lot acquisition (of Shin shares this week), the baht didn’t rise too much, so I think everything will get back to normal soon,” despite the tender offer, Nitaya said.

After wrapping up the Bt73.3-billion acquisition, Temasek was now scrambling for the best means to finance the tender offers for both companies, according to ML Chayotid Kridakorn, CEO of SCB Securities.

“If Temasek has to bring in all cash, the baht could be strengthened by Bt1 or Bt2,” he said. A loan syndication was considered one tool to fund the tender offers, he said.

TMB Bank hopes to become one of the local institutions participating in the syndicated loan for Temasek Holdings, as it mobilises funds to tender for remaining shares of Shin and AIS.

Chief operating officer Kraithip Krairiksh said yesterday TMB had not yet been contacted, but it should be given a chance to lend to Temasek.

“What Temasek needs far exceeds Bt70 billion. Many banks should join this exercise, besides Bangkok Bank and Siam Commercial Bank,” he said, adding that the exact amount would depend on how many shares are offered to Temasek.

While Bt79 billion is earmarked for Shin shares, the remaining Bt122 billion would be for AIS.

But analysts said AIS shareholders should not be attracted to sell their shares due to the low tender price of Bt72.31 against a market price of over Bt100. AIS yesterday ended at Bt99, down from Bt104 on Monday. Shin was unchanged at Bt48.25, although the tender price is Bt49.25.

Business Desk
The Nation