IPOs to revive in second half
Thailand's IPO market is expected to become active again in the second half, with 16 companies already approved by the Securities and Exchange Commission (SEC) to raise funds from the public.
"If there is not a serious second wave of outbreak, I believe the IPO market will definitely become active again," said Manpong Senanarong, senior executive vice-president and head of the issuer and listing division at the Stock Exchange of Thailand (SET).
Companies are starting to request approval to offer securities through the primary market or with an initial public offering, he said.
According to SEC data, 36 companies have already applied to raise funds via IPO, and two others have requested public offerings.
Companies that have been approved for fund mobilisation through the IPO process will enjoy good market timing to raise funds from the general public, Mr Manpong said. If market conditions are supportive, firms can launch their IPOs over the next five months.
Companies' shares will be traded on the SET or the Market for Alternative Investment, which will take 7-30 days after the IPO launch is completed.
In general, stocks with good fundamentals will get a good response from investors, Mr Manpong said, and if these securities are traded in a period of good market sentiment, investors will receive favourable capital gains.
The SET index's year-to-date return is -13% amid fragile confidence in response to the pandemic crisis, but the price-to-earnings ratio remains higher than the average ratio of regional bourses at 19.5 times.
Thailand's stock market remains in the top position in terms of funds raised from IPOs in Southeast Asia, with a value of US$2.3 billion as of May 29, followed by Indonesia ($272 million) and Singapore ($184 million).
Market liquidity trading is also the highest in the region, a supporting factor enticing fund inflows into the primary and secondary stock markets, Mr Manpong said.
Shares of Sri Trang Gloves Thailand (STGT) debuted on the SET index last Thursday, the third IPO listing this year (after Yggdrazil Group and Central Retail Corporation).
STGT IPO shares numbering 438.78 million were sold, with high demand from institutional and retail investors. The company is the world's third-largest rubber globe maker, and glove demand continues to surge as the pandemic lingers.
While the stock market remains volatile and sensitive to current events, investment in stocks still generates the most return on assets for the medium to long term, Mr Manpong said.
Paiboon Nalinthrangkurn, chief executive of Tisco Securities, said the company plans to bring two or three securities to trade on the local bourse, the first being a real estate investment trust with warehouses as underlying assets.