Local companies will likely flock to the debt market for fund-raising as commercial banks tighten their loan approvals and the stock market suffers wold swings, says the Stock Exchange of Thailand (SET).
Executive vice-president Chanitr Charnchainarong said low interest rates could draw companies to raise fund from the domestic bond market.
The Bank of Thailand's Monetary Policy Committee kept its policy rate unchanged at last Wednesday's meeting after cutting it by a quarter percentage point to 2.25% last November during the final meeting of 2013.
But Mr Chanitr said the SET sees another rate cut around the corner, as the effect of the political turmoil is expected to exacerbate the already-fragile state of the economy.
He predicts three-year bonds will prove the most popular among companies.
The Thai Bond Market Association recently forecast local companies will raise 400-420 billion baht this year from the debt market compared with 418 billion last year.
But the SET is maintaining its 2014 market capitalisation target from initial public offerings (IPOs) at 210 billion baht.
Mr Chanitr said companies in the pipeline still intend to proceed with their fund-raising plans in the primary equities market, although some firms may delay.
IPOs in the Thai stock market reached a fever pitch last year, when market capitalisation of newly listed securities reached a record 340 billion baht.
The good performance was due mainly to April's 62.5 billion baht in funds raised in the country's largest IPO, the BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF).
But signs of weakening demand for IPOs among investors appeared in the final two months of 2013, with several IPOs' debut flopping and a few firms postponing.