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Thailand IPO market stands out in Southeast Asia

Thailand IPO market gains momentum.
Stock Exchange of Thailand (Source: viewfinder / Shutterstock.com)

Thailand continues to dominate Southeast Asia as one of the busiest destinations for initial public offerings (IPO). IPO momentum of Southeast Asia’s second-largest economy is buoyed by the Stock Exchange of Thailand’s (SET) plans to ease rulings on foreign firms and build a new stock market for start-ups. 

In 2020, Thailand ranked second in IPO value for the entire Asian region, losing only to China, if cross-listed shares from other bourses were excluded. These cross-listings include real estate investment trusts (REITs).

According to Soraphol Tulayasathien, senior executive vice president of the SET, the country had 26 IPOs in 2020, down from 28 in 2019, but amounted to $4.96 bn. 

If cross-listed shares were included, Thailand would rank third in Asia, next to Hong Kong. The territory posted $44.3 bn worth of IPOs, including cross-listed stocks but only recorded $631 m if cross-listed shares were not considered.  

In November last year, SET President Pakorn Peetathawatchai predicted that the foreign businesses that may list on the Thai exchange include real estate investment trusts, holding companies, and infrastructure funds. In addition, creating a new stock exchange for SMEs and start-ups would appeal to different types of investors to enter and trade on the bourse. 

A record year ahead for Thailand’s IPO market

Thailand’s IPO market remains unbothered by the Covid-19 pandemic and its impact on the country’s economy. As of June 28, the Thai government reimposed restrictions in Bangkok and other suburban areas to control the recent coronavirus cases. 

Prime Minister Prayut Chan-o-cha plans to reopen Thailand by October of this year. This means that the Thai government would have to vaccinate 50 million people in the next four months fully. Since the start of the global health crisis, Thailand has recorded more than 244,000 Covid-19 cases, including over 1,900 deaths. In 2020, the country recorded a GDP growth of -7.1% after posting growths of 4.2% in 2018 and 2.4% in 2019. 

Still, data from the financial markets platform Dealogic shows that Thailand could expect an influx of IPOs in 2021. So far, Thailand has had 14 listings this year, amounting to $2.92 bn in value and surpassing the annual full-year average of $2.8 bn.  

Dealogic head of equity capital market research for Asia-Pacific Ken Fong said Thailand’s IPO market is “on track to have a record year.” Fong explained that most of the public listings in Thailand usually occur in the second half of the year and that “roughly 70-80% of the activity comes from Q4 and Q3 every year.” 

He added that mega IPOs, such as those by PTT Oil and Retail Business and Ngern Tid Lor, encourage other firms to list publicly. Both listings posted tremendous gains on the first day, with PTT shares increasing by 62.5% and Ngern Tid Lor stocks going up by around 25%. 

Oil and gas firm PTT launched its IPO in February and was largely oversubscribed, reaching a share price of almost 27 baht, way beyond the top-end IPO price of 18 baht. The listing attracted more than 530,000 retail investors, according to the chief executive officer (CEO) Jiraporn Kaosawad. 

Meanwhile, insurance broker and microfinance company Ngern Tid Lor debuted on the SET in May with a closing price of 45.75 baht after hitting a high of 55.50 baht, compared with the IPO price of 36.50 baht. 

Other IPO activities in Southeast Asia

Aside from Thailand’s strong presence, the Southeast Asian IPO market as a whole has been strong in recent years and is forecast to remain vigorous this year with upcoming IPOs from different firms across the region. 

Monde Nissin’s listing became the largest IPO in the Philippines after raising approximately $1 bn. According to CEO Henry Soesanto, the food and beverages company plans to use about 57.2% of its IPO proceeds to expand its meat alternative brand Quorn Foods. 

JustCo, a co-working unicorn start-up from Indonesia, plans to hold an IPO this year after conducting cautious expansions in the past two years amid the pandemic. CEO Kong Wan Sing claims that the company’s occupancy rate is at around 80% despite the move of many workers toward online platforms. 

Newly-formed GoTo Group – the result of a merger of Indonesian online retail firm Tokopedia and Grab rival Gojek worth $18 bn last May – is also planning a dual listing in Jakarta and the US this year. The merger was the largest deal in the country’s history. GoTo Group is estimated to have a market valuation of between $30 and $40 bn in Jakarta and the US prior to the planned IPOs. The group is set to do another round of fundraising worth $2 bn prior to the planned listing this year.