Thailand’s huge IPO tests foreign interest

BANGKOK: The share sale by a unit of Thailand’s oldest conglomerate is set to test investors’ interest in South-east Asia’s second-largest economy, as SCG Packaging Pcl rolls out its long-delayed initial public offering (IPO).

SCG Packaging, a subsidiary of 107-year-old Siam Cement Pcl, is seeking as much as 39.5 billion baht (Us$1.27bil) to fund expansion and repay debt. Investor presentations for the country’s biggest IPO since March begin today.

While China and Hong Kong held mega IPOS for companies including Semiconductor Manufacturing International Corp and JD. Com this year, Thailand has lagged behind.

Foreign funds have withdrawn a near-record net Us$8.3bil from Thai stocks in 2020, with the SET Index’s 19% slide putting it on pace for its biggest annual loss since 2008, according to data compiled by Bloomberg,

Although nine Thai companies have raised 101 billion baht in IPOS this year, according to the Stock Exchange of Thailand, more than 70% of that came from Central Retail Corp’s sale in February.

SCG Packaging’s IPO was approved in May, but the company wavered amid the coronavirus outbreak.

“The Thai market has lost some allure with few good listings,” said Pornthep Jubandhu, head of investment research at SCB Asset Management Co. “Major sales by interesting Thai companies are needed to spark the market’s appeal, especially among international investors.”

Though Thailand’s economy is forecast to shrink 8.5% this year, growth in e-commerce and food-delivery have driven demand for SCG Packaging’s products. — Bloomberg