The Stock Exchange of Thailand (SET) plans to focus on qualitative criteria for newly listed companies in the future, rather than quantitative aspects, aiming to ensure new members can comply with capital market regulations.
The SET ranked the highest in terms of the size of initial public offerings (IPOs) among Asean stock exchanges this year. Its year-to-date IPO value was US$2.5 billion as of Nov 29, followed by the Singapore Exchange's $1.17 billion and the Indonesia Stock Exchange's $761 million.
The bourse's fundraising target has changed over the years, from number of IPO deals or IPO value and secondary public offerings, to two quality-based objectives, said Manpong Senanarong, senior executive vice-president of the SET.
First, newly listed companies should not be flagged with special supervisory signs within the first year of trade, Mr Manpong said.
For instance, newly listed companies should report their financial statements within the stipulated time frame to prevent a trading halt (H) sign, where securities will be halted for one trading session. A trading suspension (SP) sign could be posted later if securities are suspended for more than one trading session.
Second, the amount of funds raised from IPOs should be consistent with domestic economic conditions.
With these objectives in mind, the SET will keep a close watch on newly listed companies to ensure all of them can adjust to the new environment and regulations.
"We have training courses for newly listed companies during the first year on providing news and information to investors, offering ways to handle any company-related news during trading hours, and suggesting an appropriate time for companies to issue notifications about resolutions of board meetings to the public," he said.
Typically SET-listed companies are required to submit financial statements every quarter.
The process of submitting financial statements four times during the first year should help newly listed firms to adjust and familiarise themselves with the routine conduct of the capital market.
Mr Manpong said major IPO deals are anticipated in the coming years, supported by the readiness of companies' earnings performance and information, the need to raise funds for business expansion, and market sentiment.
"Market sentiment is not the most important factor compared with companies' readiness and financial needs," he said. "This is the reason why there are still many IPO deals happening despite domestic economic growth expanding below expectations."
As of Dec 4, there were 11 companies in the IPO pipeline on the SET index, with five of them having been approved for IPOs by the Securities and Exchange Commission.
For the Market for Alternative Investment, seven IPO deals were in the pipeline, with four companies receiving the green light for IPOs.