The domestic initial public offering (IPO) market was moribund in 2016, with combined market value falling short of the 190-billion-baht target, as the adoption of a new accounting standard forced some fund-raising deals to be put off.
But the subdued IPO market is expected to bounce back in 2017.
In 2016, 27 securities listed on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI). They mobilised 52.8 billion baht from the primary market with 158 billion in market capitalisation added to the bourses, well below the 190 billion baht in market value targeted for the year.
Delays in two large fund-raising deals -- for Osotspa, the country's oldest consumer goods conglomerate, and Bangkok Commercial Asset Management (BAM), a leading bad asset management company -- were blamed for the shortfall as both deals are estimated to have a combined market capitalisation of 100 billion baht, says SET president Kesara Manchusree.
IPO deals in 2016 not only missed the target but were also the lowest in terms of the number of securities, fund-mobilisation size and market capitalisation since 2013, though the SET index was among the world's best performers this year.
The Securities and Exchange Commission (SEC) requires all listed companies to comply with tougher rules under the Thailand Financial Reporting Standards (TFRS), which requires them to declare dubious transactions or issues that could have an impact on their balance sheets in auditors' notes on the front page of financial statements.
Mrs Kesara says the SET is aggressively targeting IPO deals to add 270 billion baht in market capitalisation to local bourses in 2017.
"We missed the IPO target this year as listed companies must start adopting new accounting standards to meet the TFRS. However, we expect many of them will gear up for listing in 2017 and this will give a boost to the IPO market," she says.
According to SET data, After You Plc (AU), listed on the MAI, was the best-performing IPO, with the share price shooting up 200% from its 4.50-baht IPO price on the first day of trade on Dec 23.
Other top performers on opening day were Netbay Plc (NETBAY), surging 183% from its four-baht offering price; Ekachai Hospital Plc (EKH), soaring 116% above its 3.05-baht IPO price; Thai Nippon Rubber Industry Plc (TRN), jumping 60.9% above its 16-baht IPO price; and ALT Telecom Plc (ALT), gaining 60.6% above its 4.70-baht IPO price.
None of the 27 securities debut in 2016 fell below IPO prices on the first day of trade. Hemraj Leasehold Real Estate Investment Trust (HREIT) on the opening day was unchanged from its offering price, while the other 26 offered gains to those who bought shares when they went public.
Kasikorn Securities managing director Manpong Senanarong says public listing deals are expected to pick up in 2017, propelled by favourable stock market conditions.
The stockbroker arm of Kasikornbank expects 3-4 IPO deals with a market cap of at least 30 billion baht each in 2017.
Lec Sicoravit, Asia Plus Advisory's president, echoes Mr Manpong's view, saying that the IPO market will become more active in the year ahead.
Asia Plus Advisory plans to push four companies to list in 2017, he says, adding that each of them has a market cap of around 2 billion baht.
Meanwhile, Trinity Securities managing director Suthang Khonsilpa says the company will take part in 2-3 IPO deals, one of which has a market cap of around 20 billion baht, in 2017 and one of them could be BAM.
