Thailand expects more companies from neighbouring countries to raise funds on the local exchange through real estate investment trusts as authorities aim to expand investment alternatives for locals and foreigners.
The Stock Exchange of Thailand has approached owners of hotels, office buildings, shopping malls and other properties in Laos, Cambodia and Myanmar to tap its capital market for long-term funds, said Manpong Senanarong, the head of the bourse’s Issuer Marketing Division. Spinning off assets would be faster and easier than doing initial public offerings of entire companies, he said.
The government and companies of Southeast Asia’s second-biggest economy are seeking more trade and investment opportunities in neighbouring countries as well as in Vietnam as domestic growth slows and an ageing population dampens consumption. Thai investors are accustomed to foreign bond issuers after firms including Singapore-based Yoma Strategic Holdings Ltd and EDL-Generation Plc, Laos’s state-controlled power producer, sold baht bonds to finance their expansion.
“A number of businesses have expressed interest in fund raising through asset spin-offs such as REITs,” Mr Manpong said in an interview Tuesday. “Their stable income and high growth would attract Thai investors to those new securities.”
Myanmar has the highest potential for new issuers among neighbouring countries as its large population, pace of economic growth and underdeveloped financial system spur demand for capital, Mr Manpong said. Thai investors are hunting for investment alternatives as the central bank’s benchmark interest rate is at a record low, while the stock market has slumped, he said.
Thailand has yet to attract any foreign listings after attempting for several years. Pakorn Peetathawatchai, who became the bourse’s president in June 2018, targeted the first stock listing of a foreign company on the Thai exchange in the first year of his term.
Issues such as accounting standards and internal corporate controls make the listing of foreign companies “time consuming,” Mr Manpong said.