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Thai IPOs Face Postponements Amidst Economic Turbulence And Political Uncertainties
(CTN NEWS) – A subsidiary of Thailand’s largest cement company has joined the ranks of businesses postponing their initial public offerings on the Bangkok stock exchange due to the prevailing market downturn caused by political uncertainties and unfavorable economic prospects.
Siam Cement Group has announced a delay in the initial public offering of SCG Chemicals until October 4th. The group, which had initially sought a listing in April 2022 with plans to offer 25.2% of its shares, has reconsidered its decision in light of the current circumstances.
Siam Cement’s CEO and President, Roongrote Rangsoyopash, conveyed this decision to the Stock Exchange of Thailand, citing the challenging economic conditions and an ongoing energy crisis that has impacted investor sentiment.
SCG operates an integrated petrochemical business across Southeast Asia, with its largest shareholder being King Maha Vajiralongkorn. SCG Chemicals constitutes one of the group’s three main segments, alongside cement and packaging.
Challenges and Prospects for Thailand’s Stock Market Amidst Economic Pressures
The share price of SCG has experienced a 7% decline this year. In July, Roongrote noted that the group is likely to fall short of its annual revenue target due to decreased sales both domestically and internationally.
The group’s first-half revenue declined by 17% compared to the previous year.
This year has witnessed a notable slowdown in initial public offerings on the Stock Exchange of Thailand, with only half the number of listings seen in 2022, and those listings being only 16% of the previous year’s sizes.
The market has been impacted by a confluence of global economic challenges, rising interest rates, an accounting scandal involving an SET100 constituent, and a three-month period of political deadlock that has prolonged a selling trend by foreign investors, resulting in a net outflow of 55 billion baht ($1.6 billion).
The stock exchange intends to implement revisions to its listing and reporting regulations by the conclusion of this year, with the aim of reinstating investor faith in the market.
This effort hinges on the anticipation that the recently established government will rekindle positive market sentiment.
However, prior to these reforms, additional postponements in listings might be on the horizon.
Thai Startup aCommerce Delays IPO Amidst Shifting Landscape and Conglomerates Explore Major Listings
Thai startup aCommerce, a provider of e-commerce solutions spanning Southeast Asia for notable platforms such as Shopee and Lazada, deferred its initial public offering in October. This decision followed its initial application for listing submitted in June 2022.
The company also underwent a reduction in workforce, laying off 20 team members from its 800-strong workforce in June, attributing this to a “shifted” business landscape.
Two conglomerates are currently strategizing to divest segments of their enterprises, and either of these endeavors could potentially result in Thailand’s most significant listings this year.
CPF Global Food Solutions, responsible for CP Foods’ upstream animal feed and seed operations, submitted an IPO application in April with the intention of raising up to $1 billion.
Similarly, Big C, the second-largest hypermarket operator in Thailand, lodged a filing in April aiming to secure at least 30 billion baht.
Big C, founded by mall operator Central Group, is owned by trading entity Berli Jucker, under the purview of the billionaire Sirivadhanabhakdi family.
This family-run conglomerate had initially outlined plans for another spinoff back in February 2021. This involved offering 20% of Beerco, the brewery arm of its expansive beverage empire ThaiBev, on the Singapore Exchange, with the goal of raising $2 billion.
However, company executives revealed last year that this plan was shelved within two months, as the organization opted to await more stable market conditions before proceeding.
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