Initial public offering (IPO) shares are not slowing down, as closing prices of 80% of IPOs during the first day of trade were higher than share subscription prices from 2017 to 2018, says the Stock Exchange of Thailand (SET).
Of IPO shares from 42 SET-listed companies, only eight registered lower closing prices during the first trading day compared to share prices logged during the subscription period in 2017, said Soraphol Tulayasathien, senior executive vice-president and head of the corporate strategy division at the SET.
For 2018, only four IPO shares from 20 experienced lower closing prices than share prices logged during the subscription period, said Mr Soraphol.
Of 62 SET-listed companies raising funds through IPOs during the past two years, 50-60% of equities have higher capital gains than returns generated from the SET index, he said.
The share prices of 21 listed companies also rose by more than 20% compared with the average SET index during 2016-2017, said Mr Soraphol.
"IPO shares are not outdated or going through a downward trend. The stock market experienced volatility during the past two months, [contributing] to IPO prices closing lower [than the share subscription price]," he said.
"This market condition is expected to last for a short period."
Lower closing prices of IPO shares during the first trading day are also attributed to specific factors related to each listed company, said Mr Soraphol.
Year-to-date return generated from the SET index has declined by 7.6% because of financial volatility arising from external factors such as trade tensions between China and the US, he said.
But Thailand's stock market fundamentals remain sound, reflected by the SET's year-to-date return beating regional and emerging market peers, said Mr Soraphol.
Foreign fund flows have started to return to the SET as foreign investors were net buyers of shares worth 4.65 billion baht from Dec 1-11, he said.