Companies are still keen to raise funds from the equity market despite sentiment turning sour following the repatriation of funds by foreign investors.
Twenty-four companies are still planning to list this year _ 13 on the Stock Exchange of Thailand (SET) and the rest on the Market for Alternative Investment (MAI). One company is also planning to list its infrastructure fund.
Since early this year, 21 companies have listed on the SET and MAI with a combined market capitalisation of 230 billion, surpassing the SET's full-year target for new-listing market capitalisation of 120 billion baht.
The initial public offering market is resilient in the wake of the stock market slump, which has already wiped out this year's gains. Only one of the 16 newly listed companies debuted on the Thai bourses this year fell below their initial public offering (IPO) prices on the first days of trade.
The SET index yesterday extended losses for the eighth straight trading days, down 0.67% to close at 1,329.18 points in light trading of 29.53 billion baht. The main gauge has lost almost 9% since the market close on Aug 16 at 1,460.63.
Chanitr Charnchainarong, the SET's executive vice-president, said the financial position of most Thai listed firms remain strong as evidenced by the fact that non-financial institutions at the end of June had combined cash of 646 billion baht, while banks and financial institutions had cash of 85 billion baht. Listed companies' combined cash accounted for 6.8% of total market assets at 9.54 trillion baht and their interest coverage ratio stood at 5.37 times, compared with listed companies' cash-to-assets ratio at below 2% and interest coverage ratio at below one time during the 1997 financial crisis.
Listed companies paid nearly 100 billion baht in interim dividends for the first half's performance and 80% posted net profits.
"Foreign investors have pulled around 100 billion baht from the Thai stock market this year, compared with net buying of 60-70 billion last year. They were also net sellers of around 160 billion baht during the Lehman crisis in 2008. They are now concerned about liquidity in the stock market, while market performance was their main concern at that time," said Mr Chanitr.
Since the market started to decline, 143 stocks have traded below their book value, up by 24 from last year's levels.
About the author
- Writer: Nuntawun Polkuamdee
Position: Business Reporter