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MARKET OVERVIEW Alternative means of value creation Impressive number of entries, but investors yet to benefit
Foundedin1999, the board was created as ameans for small, high-growth companies to access new capital. Ideally, such new companies seek initial listings on the MAI and then transfer over to the larger SET once sufficient size and scale are reached. But are these companies creating value? In 2005, the broader SET generated a market capitalisation-weighted average return of 20%. The MAI, on the other hand, lost 2.0% of its value over the year (again, inmarket capitalisation-weighted average terms). However, as MAI companies mature, the fastest-growing and most successful seek a quick transfer to the larger SET.
Of the 22 MAI stocks at the end of 2005, 14 ofthem—or64%—had negative TSRs. In comparison, 53% of the companies on the SET had negative oneyear TSRs in 2005. In theory, the MAI may always lag the SET, as its best performers shift across to larger bourse. Interestingly, of the six companies that migratedto the SET,onlytwofirms,Siam Future and Team Precision,managed to surpass the MAI average in their one year TSRs. Twocompanies, MatchingStudioand Traffic Corner, destroyed two thirds and one half their value, respectively, over 2005. TSRs for the other two companies — Daidomon, and Shun Thai Rubber Gloves Industry — could not be calculated, dueto suspensions over the analysis period. Whatever gains these companie may have had, illiquidity does not serve investors well. Although some gains have been made on the MAI, the record to date is not over whelming. MAI stocks are inherently more risky, with lower capital reserves than those on the SET. While an impressive number of companies has entered the market, and fulfilled the MAI’s original intent of matching entrep reneurs with investors. Many of those investors have yet to reap significant rewards from putting their money in.
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