June 21, 2018 / 10:33 AM / 25 days ago

Thai bourse targets 40 percent market cap growth by 2023, fueled by IPOs

BANGKOK (Reuters) - Thailand’s national bourse is eyeing a near 40 percent rise in the market value of shares listed on it over five years to about $700 billion, driven by offerings from infrastructure funds, family businesses and company spinoffs, its new president said.

President of the Stock Exchange of Thailand, Pakorn Peetathawatchai poses during an interview with Reuters in Bangkok, Thailand, June 21, 2018. REUTERS/Chayut Setboonsarng

Pakorn Peetathawatchai, who was promoted to the top job at the Stock Exchange of Thailand in June from vice-president, was optimistic about growth of the stock market in the Southeast Asian nation despite a recent sell-off by foreign investors, a sharp decline in the benchmark index .SETI and a listless first half for listings on the bourse.

“The country’s fundamentals are strong and companies have good earnings,” Pakorn, a former foreign exchange trader, told Reuters in an interview on Thursday, adding that “investors are reacting to external factors like tapering and uncertainty from a trade conflict”.

The exchange is targeting market capitalization growth of 250 billion baht each year from IPOs over the next five years to reach its goal of 22-23 trillion baht ($667.3 billion-$697.8 billion) by 2023 from 16.8 trillion baht now, he said.

Another 200 billion baht a year will come from already listed companies issuing additional shares, he added.

So far in the first half of 2018, total listings added just 20 billion baht to market capitalization at IPO prices compared with 426 billion in the whole of 2017, the bourse’s website shows.

But the IPO pipeline is hotting up.

Family-owned sports drink giant, Osotspa, which had revenue of 26.2 billion baht in 2017, is planning to list 20.1 percent of shares this year, the website shows.

A $3 billion government infrastructure fund, is expected to list in this year, after several delays.

The exchange also has its eyes on listings by foreign companies. Pakorn cited Japan’s Line Corp (3938.T) (LN.N), which runs the Line messaging app, as an example.

“Thais use Line massively…and Thais will want to invest in the company,” he said, but declined to comment on any talks with the company.

Reporting by Chayut Setboonsarng; Editing by Muralikumar Anantharaman

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