Thailand’s currency rally will help reverse a slump in its market for initial public offerings (IPOs) and provide firepower for overseas acquisitions by Thai companies, according to JPMorgan Chase & Co.
IPOs will benefit from prospects of the strong baht and a heightened profile for the country as a rebound in international travel accelerates, JPMorgan country head for Thailand Marco Sucharitkul said.
The currency has strengthened by about 12 percent versus the US dollar over the past six months, with a more than 5 percent jump this month alone, making it the best performer in Asia during those periods.
An early litmus test for the IPO market will be a share sale by SCG Chemicals PCL, which is planning IPO of as much as US$3 billion — a record for Thailand. Parent firm Siam Cement PCL delayed the sale in October last year, citing risks to the global economy, energy market volatility, high inflation and China’s lockdown situation.
“With the baht getting stronger, that changes views on the market; we believe that foreign interest is coming back,” Marco said in an interview. “At the same time, Asian corporates — including Thai companies — are looking to expand overseas and a strong Thai baht will be favorable for local firms with global ambitions.”
Among positive signs is the benchmark SET Index this month touching its highest level since April last year, with global funds sending a net US$590 million so far into Thai stocks — adding to a record US$5.96 billion of inflows last year, according to data compiled by Bloomberg. Also, the government said on Monday that 11.2 million foreign tourists arrived last year, beating the target of 10 million, and the tourism authority expects about 25 million this year.
About US$4.1 billion was raised through Thailand IPOs last year, a drop of 0.5 percent from the previous year. Still, the contraction would have been worse, had there not been supportive demand from local investors.
“If you look at the IPOs in Thailand that managed to take off last year, 70 percent to 80 percent were taken up by local funds,” Marco said. “Foreign demand was low as the US dollar was strong compared with the currencies in the APAC region.”
Still, the baht’s recent rally is unnerving Thai exporters, manufacturers and some companies that complain the currency’s rapid gain is eroding their competitiveness and the nation’s economic recovery, according to local trade groups. The Thai National Shippers’ Council said in a statement yesterday that the central bank should delay raising interest rates and stabilize the currency to help exporters.
The currency traded at about 32.727 per US dollar as of 2:27pm in Bangkok, compared with an average exchange rate of 35.06 per US dollar last year. The country’s exports last month dropped 14.6 percent from a year earlier, more than economists expected, the Thai Ministry of Commerce said yesterday.
The baht’s performance will prompt Thai firms to renew their efforts to invest abroad, with the pandemic having quashed most plans, Marco said.
There were few overseas acquisitions of any note by Thai companies last year, according to Marco. In 2021, PTT Global Chemical PCL purchased Allnex Holding GmbH, a European specialty chemicals maker, for 4 billion euros (US$4.35 billion), while Central Group and its partners bought Selfridges & Co for ￡4 billion (US$4.96 billion) in one of the biggest UK retail deals in years.
This time was supposed to be different. The memorychip sector, famous for its boom-and-bust cycles, had changed its ways. A combination of more disciplined management and new markets for its products — including 5G technology and cloud services — would ensure that companies delivered more predictable earnings. Yet, less than a year after memory companies made such pronouncements, the US$160 billion industry is suffering one of its worst routs ever. There is a glut of the chips sitting in warehouses, customers are cutting orders and product prices have plunged. “The chip industry thought that suppliers were going to have better control,” said
Enimmune Corp (安特羅生技) has obtained marketing approval from the Food and Drug Administration (FDA) for its EnVAX-A71 vaccine for enterovirus 71 (EV-71), becoming the nation’s first enterovirus vaccine completely made in Taiwan, it said yesterday. After spending 13 years and NT$1.5 billion (US$49.77 million) on the research and development of the vaccine, Enimmune plans to start manufacturing and marketing it by the end of March, the company said in a statement, without disclosing customer order figures. “It is possible that the vaccine would not be included in a national vaccination program initially, and consumers would need to pay for it themselves,” parent
Hon Hai Technology Group (鴻海科技集團), also known as Foxconn Technology Group (富士康科技集團) internationally, yesterday said it was confident that its performance would improve in the second half of this year. Investment plans related to electric vehicles (EVs) in different parts of the world are expected to gradually start coming to fruition, Hon Hai chairman Young Liu (劉揚偉) told reporters after leading a new year’s prayer at the company’s headquarters in New Taipei City’s Tucheng District (土城). Major challenges stemming from the COVID-19 pandemic and the Russia-Ukraine war continue to affect the global economy. However, Liu said that he expects a turnaround in
Singapore is seeing an influx of ultra-wealthy families from China looking to protect their wealth from a government that increasingly views them with suspicion. The Chinese Communist Party’s recent crackdowns on tech billionaires and tax-shy celebrities, as well as three years of “zero COVID” policies, have led many rich Chinese to look for a safe haven. Nervous over the fate of their fortunes, some of the country’s mega-rich have since booked tickets to Singapore, insiders said. The key Asian financial hub ticks all the boxes for relocating tycoons. Singapore has been ruled by one party for the past six decades, and labor strikes and