After a lukewarm first half, Thailand's IPO scene is bustling again from listings by four large corporations during the last six months, cementing the Stock Exchange of Thailand (SET) in the top spot for IPO value among Asean bourses.
The SET has held pole position in the IPO value race since 2014. The Thai bourse is set to take the top spot for the sixth straight year, thanks to major IPOs in the second half.
SET senior executive vice-president Manpong Senanarong said the exchange's market capitalisation generated from IPOs is expected to increase by 380-390 billion baht this year, higher than the previous forecast of 280 billion baht.
Total fundraising mechanisms, such as IPOs, rights offerings and other special public offerings, are poised to chalk up 780 billion baht this year, Mr Manpong said.
"Market capitalisation has increased from raised funds, including IPOs, and the value is above expectations due to the listings of four large companies in the second half," he said.
Major IPO deals were seen from Asset World Corp (AWC), a property development arm of billionaire businessman Charoen Sirivadhanabhakdi, and the public offering debut of Bangkok Commercial Asset Management Plc (BAM), the country's largest distressed-asset manager.
On Sept 27, AWC was reported to have raised funds worth 48 billion baht, considered to be the largest IPO of an individual company listed on the SET. AWC's market cap stood at 184 billion baht as of Dec 30.
BAM posted the country's second-largest IPO by market cap this year at 54.6 billion baht as of Dec 30.
This year also saw the debut of Super Energy Power Plant Infrastructure Fund (SUPEREIF), as well as S Hotel and Resorts (SHR) from the Bhirombhakdi family, owner of Thailand's oldest brewery (Singha beer).
This year's IPOs included 34 securities, with 30 of them identified as stocks listed on the SET and the Market for Alternative Investment. The combined value of IPOs issued was 90.8 billion baht, with market cap at IPO price logging 383.7 billion baht as of Dec 30.
Future IPO entries by major firms will help bolster the SET's market cap. Next year's IPO market is anticipated to continue simmering, with many companies in the listing pipeline waiting for the perfect moment to debut on the bourse.
While there remains a need to raise funds for business expansion, refinancing or working capital, market sentiment will determine these launches.
Although the IPO outlook may be rosy, sentiment in Thailand's stock market in 2019 was largely morose, with recurring volatility seen throughout the year.
The SET index's year-to-date return was -0.9% as of Dec 30. Most newly listed firms have seen their share prices tumble below IPO prices, leaving investors wallowing in disappointment.
Several variables have contributed to lower share prices, such as supply and demand for investment, fundamentals of listed companies and how IPO prices may be pricey relative to companies' fundamentals.
If investors have an understanding that equity investment is a long-term investment scheme with many risk factors, they will be able to mitigate short-term losses for long-term gains.
A financial adviser said investors have to carefully study equity investment and should evaluate IPO prices alongside companies' fundamentals.
If investors cannot conduct this evaluation, they should opt to invest through mutual funds or seek investment advisory services instead, said the financial adviser, who spoke on condition of anonymity.
"Basically, the IPO price will calculate a company's future performance, so investors have to look into whether the price is appropriate and do a follow-up on the company's performance after being listed," the adviser said.
Chaiyaporn Nompitakcharoen, executive vice-president of Bualuang Securities, said 2019's market sentiment was not supportive of equity investment and Thailand's stock market suffered as a result.
Although a return of bullish sentiment will help shore up share prices of newly listed companies, some IPO prices are still expensive compared with companies' fundamentals, Mr Chaiyaporn said, adding that investors must be cautious and study the details before investing.