May 2, 2024

Fund’s Debut in Thailand Raises Hopes

BANGKOK — Soaring stock markets in Southeast Asia could get a surge of new listings this year, after a record initial public offering in Thailand rose by more than a fifth in its first day of trading Friday.

The price of units of BTS Rail Mass Transit Growth Infrastructure fund rose as much as 22 percent before closing up 13 percent in the first day of trading Friday. The fund, which is controlled by BTS Group, raised $2.1 billion this month in the largest I.P.O. by a Thai company. It was an exceptional gain for such a large offering, which had already been priced at the top of its marketed range — a good signal for other companies with plans to list in Thailand this year.

The BTS fund offering was the largest I.P.O. in Asia, excluding Japan, so far this year. It followed a string of successful listings in Southeast Asian countries like Indonesia and the Philippines, where stock markets are also soaring.

“Several countries, especially in Southeast Asia, are spending a lot of money on infrastructure,” said Kasem Prunratanamala, the head of research of CIMB Securities in Bangkok. “When the stock markets are performing well like this, the launch of an infrastructure fund will be a good option for companies to raise money.”

LT Group, which owns Philippines Airlines and is controlled by the billionaire Lucio Tan, raised $912 million in one of the biggest stock offerings in the Philippines on Wednesday. In Jakarta, Matahari Department Store raised $1.3 billion in March, while Mapletree Greater China Commercial Trust pocketed $1.3 billion from a Singapore I.P.O. in February.

Companies planning to list in Thailand this year include Bangkok Airways, Nok Air, the power producer CK Power, the industrial developer Amata VN and the Malaysian bank CIMB Group.

Listings in Thailand reached an all-time high of $10 billion in 2012, according to Thomson Reuters data. New issues have totaled $3.9 billion so far this year, on pace to surpass a record set last year.

The Thai stock market has risen 9.9 percent so far this year. The Indonesian stock market has gained 16 percent this year and rose to an all-time high in the past week. Shares in the Philippines, which received its first investment-grade credit rating in March, are up 18 percent.

The buoyant markets have prompted banks like Citigroup and Goldman Sachs to shuffle staffs and increase hiring in a bid to gain new businesses.

With a rising middle class, fast-growing economies and large populations, Southeast Asian nations are also receiving new attention from private equity firms. Carlyle Group recently hired Rajiv Louis, a banker with a decade of deal-making experience in Indonesia, to be its country head in Indonesia.

Completed Southeast Asia mergers and acquisitions rose from less than $100 million in the first quarter of 2009 to $1.8 billion in the first quarter of 2013, according to Reuters data. The volume of deals in the region in the past two years totaled $113 billion, compared with volume of just $20 billion in the preceding six years, the data show.

Article source: http://www.nytimes.com/2013/04/20/business/global/funds-debut-in-thailand-raises-hopes.html?partner=rss&emc=rss