Nobody needs to be reminded that businesses are in a challenging environment; some sectors are still managing the fallout of the Covid-19 pandemic, and many are dealing with the impacts of the global economic crisis.
However, it's not all doom and gloom. Although the global IPO (Initial Public Offering) market is currently in a dip, there are glimmers of positivity, particularly across Asean. Insights from BDO show strong overall momentum for IPOs across the Asean markets, with high customer activity levels despite some sectors still feeling the effects of the pandemic. In Malaysia, for example, total IPOs in terms of number and market capitalisation for 2022 will be at record levels from the last few years. Indonesia is also anticipating a peak in investment appetite in the near future, with interest expected to rise from Q2 to Q3 2023 before slowing down ahead of both US and Indonesian elections in 2024.
Thailand, in particular, is emerging as an economic hotspot. The growth that has taken place in Thailand over the past 40 or 50 years has been exponential. It’s become a major hub for manufacturing and tourism, reflecting the kind of growth it took countries like Britain and Australia to achieve in a much shorter period. It’s also gaining momentum as a key IPO market due to its ability to raise high funds and the faster process resulting from the Facilitation Act, making it easier for companies to IPO. Statistics show that 30 firms are applying for initial public offerings this year, while 22 companies have listed. Two enormous firms, including Thai Life Insurance, have already entered.
Trends in Thailand
In Thailand, family business is big business. In fact, around three-quarters of the companies listed on the Stock Exchange of Thailand are family businesses. In these circumstances, there's always a question of succession and distribution of shares. Bringing stocks to the market is an exciting option because it enables sales at a higher price than what is sold within the family. It also positions the business to source professional executives to help take care of family affairs, helping to future-proof the business and ensure its sustainability long-term. However, with the current talent shortage, even family businesses must focus on retention and development and new approaches to incentivise productivity, loyalty, and workforce.
While IPOs in the industrial sector have slowed, in the past year, the biggest IPOs have fallen into the agriculture, food, property and construction sectors. However, Covid-19 continues to be one of the accelerating changes in the Thai economy. Based on its market experience and data, BDO Thailand has forecast that healthcare will be a key sector to watch, which also aligns with the current population trend.
Thailand has one of the fastest-ageing populations worldwide, with shrinkage thought to stand at about 30%. This means that healthcare is a huge sector and emerging and growing businesses in this space should certainly be of interest to potential investors.
Technology is another sector to watch in Thailand, and there is particular interest in technology that will make life more convenient and help reduce costs – another hot topic on people's minds as they manage inflation.
The upward trajectory after Covid-19
While Thailand’s tourism industry is returning strong, businesses have had to adapt. With global awareness of the strain the Covid-19 pandemic put on local businesses, brands need to centre what they do to help locals and support the overall economy. This sentiment ties neatly into the Thai culture of making merit, a tradition that facilitates good ‘karma’ accumulated as a result of good deeds, acts and thoughts.
There’s also the ongoing climate crisis, spiking demand for sustainable products, services and manufacturing processes. While the phrase ‘carbon neutral’ may not have been in the corporate lexicon two decades ago, consumers and customers today are savvy about the impact consumption has on the planet and brand image. This shift is creating more jobs, with a need for professionals who can understand and manage environmentally-friendly operations.
As markets worldwide recalibrate after the pandemic, Thailand offers an optimistic outlook. There are undoubtedly challenges ahead, but as a market, Thailand’s economy looks set to ride out the storm and come out stronger on the other side.
