The Stock Exchange of Thailand (SET) reveals this year’s initial public offerings listing on the SET and the Market for Alternative Investment (mai) have an average yield of 41.54 percent (offer to date), the highest return in Asia-Pacific and the world’s fourth biggest.
The returns are compiled from 10 newly-listed companies, consisting of three SET-listed firms and seven mai-listed companies. (as of December 21, 2011)
“The key factor of making outstanding returns is because these IPOs have good performances and are all in growth industries, with six firms more-than doubling net profits in the first nine months of 2011 and four companies paying interim dividends, reflecting their financial strength and liquidity. In addition, the overall increases of SET and mai indices in the fourth quarter also help support new listings and reflect the investors’ confidence to Thai listed firms during the flooding crisis,” said Chanitr Charnchainarong, SET’s Executive Vice President of Issuer & Listing.
These IPOs continue to attract both institutional and retail investors. When looking at figures going back for three years (2008-2010), IPO stocks in general gave better returns since their first listings than the indices. Annual returns of IPO stocks averaged 40.78 percent in 2008, 116.91 percent in 2009 and 85.36 percent in 2010, compared with annual returns of the SET index of 21.64 percent in 2008, 131.97 percent in 2009 and 42.10 percent in 2010. In addition, the newly-listed companies could raise funds at cheaper costs than existing listed firms, as proven from the average P/E ratio of IPO stocks, which was at 12.60 times, less than the P/E ratios of the SET and mai, which were at 13.37 and 18.46, respectively. “That is another main factor to make listing attractive”, Chanitr added.
The total market capitalization of the new listings in 2011 rose 9.72 percent to THB 29.30 billion as of December 21, 2011, up from THB 26.70 billion since they listed on the exchange. Among the newly-listed firms on SET, Khonburi Sugar pcl (KBS) provided the biggest return of 20.88 percent, while on the mai, the return of Union Intraco pcl (UIC) was at 118.75 percent.
