To Jason Cox, managing director and co-head of Asia Pacific Global
Capital Markets, Merrill Lynch (Asia Pacific), a subsidiary of Bank of America
Corporation: foreign investors are upbeat on Thailand and Asean capital
markets, and expect soon some attractive IPO and PO stocks.
Let me talk about initial public
offering (IPO) and public offering (PO) stocks in Thailand and Asean. Is it
going to be exciting this year and next year?
You have already seen the demand
for IPOs in Thailand and Asean markets. Of the three top IPOs done year to date,
two of those are from this part of the world.
The biggest IPO was Facebook. The
second and third-largest are palm-oil firm Felda and hospital operator IHH ,
both in Malaysia .
However, in Thailand, one the
best-performing IPOs globally year to date is Tesco's Thai Property fund, the
third-largest IPO in Asean.
So, there is a lot of the focus
on this part of the world while the rest of the world remains extremely
volatile. As investors are searching for growth, the Thai market continues to
offer stability and growth opportunities.
What about Myanmar, which is
opening its economy?
It's something people watch
closely and would like to have access to. One of the interesting aspects of
investing in Thailand is its geographical positioning within Asean. Thailand is
in the neighbourhood of four key markets - Laos, Cambodia, Vietnam and Myanmar.
I do think that people see there is an opportunity. Thai companies have a long
history in the capital market, winning a significant amount of trust from
investors. Investing through Thai companies or firms listing on the Singapore
exchange for those opportunities in those new frontier markets, it is
interesting for investors.
Do you think Myanmar will launch
privatisation of its energy and telecom sectors, or other sectors?
If you look at the growth of Asia
in the last 15 years, certainly, privatisation has been a big part of the
growth strategy for many companies. But it is still early days in Myanmar. The
other way to invest in Myanmar is to invest in Thai companies, Thai energy
companies or others that are exposed to Myanmar or Thai companies that already
have a presence there. Investing through Thai companies is something you can do
now for those opportunities and profitability that may come in the future.
Do you get deals from the
Thailand Focus 2012 conference?
I think there are a lot of
investors interested in Thailand right now. And certainly there are deals in
the pipeline, both IPO as well as public offerings. And there is demand for
that from international investors.
How can Thai corporations or
Asean firms make profits while Europe and US are still facing economic woes?
Thailand's position within Asean;
the benefit of sitting in those key growth markets; intra-regional trade with
those markets - Cambodia, Laos, Myanmar and Vietnam - as well as the rest of
Asean is significant for Thailand.
Those markets are the next phase
of growth for Asia so, I think, globally that is an opportunity. Additionally,
on the Thai domestic scene, we think there are opportunities for growth, which
are infrastructure spending and development upcountry.
Should Thai firms invest in real
estate in Europe or the US in order to take advantage of falling prices?
There are opportunities globally,
opportunities for firms and countries. There are opportunities for firms and
countries coming from a position of strengthen to take advantage of the
volatility that we see in Europe and US. This is already happening, M&A
[merger and acquisitions] are now both ways across the globe.
How do you view Thai
macro-economic policies? What are the threats for the Thai economy?
I think if you look at the number
of participants in Thailand Focus 2012 [referring to last week's conference],
the number of participants were double the number you had the year before.
There is a huge amount of focus on Thailand. The stability is good and the
progress that has been made is a good thing. On the capital market side,
definitely there is a positive view right now on the opportunity that Thailand
represents.
Do you expect more IPOs in
Thailand this year?
There are lots of opportunities
in Thailand. There are several IPOs that are in the pipeline. Additionally, a
lot of capital is being raised through public offerings in Thailand. Some have
been announced, some are in progress.
But there is demand that we see
that in the secondary market in terms of foreign investor participation.
We have seen the performance of
Tesco post IPO - up 30 per cent since the IPO. So there is real support, and we
see that one of the reasons that Asean is a focus of people is not only growth,
the intra-region trade but there is domestic support from retail investors and
domestic institutions as was also the case in Malaysia .
You have healthy domestic demand,
which is something that comforts foreign investors - knowing domestic demand
and support also exist in the market. If you look at Hong Kong and even the US
markets where retail investor participation has gone down. Asean stands out in
terms of having domestic demand and domestic support for the equity market.
Wichit Chaitrong
Business & Investment Opportunities
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