RPT-Thailand, Singapore to Power SE Asia's IPO Boom
Fri Oct 7, 2005
By Ovais Subhani
SINGAPORE (Reuters) - Privatisation of state assets in Thailand and a stream of real estate investment trusts in Singapore are likely to power the new-shares market in Southeast Asia in the coming months and set the tone for more next year.
Among major initial public offering in this quarter, Thailand is likely to lead the region with over $2 billion worth of IPOs and Singapore will have at least one REIT listing and a $400 million issue by a Malaysian gaming firm.
In the Philippines power company First Gen Corp. aims to raise up to $200 million in December.
A total of $3.7 billion has been raised in the region year-to-date, topping the $2.1 billion issued in the same period last year, according to market research firm Dealogic.
Southeast Asia is unlikely to match the mega-issues in Hong Kong, such as the $7.6 billion China Construction Bank and $3 billion Link REIT, but bankers expect the region to keep coming up with a steady stream of small and medium sized deals.
"Overall numbers have been good and good activity is likely in the mid and small cap," said Richard Taylor, senior managing director at CLSA Emerging Markets.
MORE TO COME
Singapore leads the region so far in 2005 with $1.4 billion worth of IPOs, versus $922 million in the same year-ago period.
But Thailand is poised to overtake the city-state in the fourth quarter, with long-awaited major IPOs such as beer-maker Thai Beverage PCL, at about $1.3 billion, and state electricity authority EGAT PCL, of around $1.0 billion.
"The various Thai privatisations that have been mooted or are on the go for a long time now, we are confident they will come in the very short term now," said John Moore, ABN AMRO Rothschild's Asia Pacific joint head of equity capital markets.
Those issues will add to the $723 million raised so far and set the tone for next year when state firms, including two telecoms firms, TOT PCL and CAT Telecom PCL, and two power distributors, Metropolitan Electricity Authority and Provincial Electricity Authority, are due to list.
"The upcoming IPOs will be a major catalyst for the overall market," said Suvit Mapaisarnsin of Phatra Securities in Bangkok who said a recent recovery in the secondary market, which is still close to six-month highs hit last month, would encourage more IPOs.
In Singapore Malaysia's Genting (GENT.KL: Quote, Profile, Research) is expected to list its international gaming assets, which include stakes in casinos from Macau to London, later this year.
"That will catch people's attention. That's a very well regarded group," said Taylor of CLSA, which is among the banks handling the transaction.
Taylor said Genting could raise as much as $400 million, which would make it the largest IPO since Suntec REIT (SUNT.SI: Quote, Profile, Research) raised about $508 million in December 2004.
SINGAPORE REITS
A potential revival in Singapore's real estate sector has sparked listing of Real Estate Investment Trusts (REITs).
Cambridge REIT, with a portfolio of industrial buildings worth as much as $355 million, would be the eighth REIT to list in Singapore in the coming months.
"Success of REITs in Singapore could spawn new ones," said Jit Soon Lim, head of research at Citigroup in Singapore.
He said companies like media firm Singapore Press Holdings (SPRM.SI: Quote, Profile, Research), hospitals operator Parkway Holdings (PARM.SI: Quote, Profile, Research), might opt to divest non-core properties and spin them off as REITs.
Firms with significant investment property holdings, such as Keppel Land (KLAN.SI: Quote, Profile, Research) and conglomerate Fraser and Neave (FRNM.SI: Quote, Profile, Research) have already shown interest in launching REITs, he said.
This year Mapletree Logistics Trust Management (MAPL.SI: Quote, Profile, Research) raised $254 million in July and Prime RIET (PRIM.SI: Quote, Profile, Research) followed with a $341 million IPO.
Mapletree IPO was oversubscribed 44 times and its units were trading at a 46 percent premium on Thursday against its offer price. Prime REIT was oversubscribed 35 times and was trading at a seven percent premium.
(Additional reporting by Khettiya Jittapong in Bangkok)
IPO Volume Table year-to-date (YTD) 2005 Oct 7
YTD 2005 Oct 7 Last YTD 2004 Oct 7
Issuer Nationality Deal Value ($m) No. Deal Value ($m) No. Indonesia 339 5 99 7 Malaysia 638 60 345 53 Philippines 617 2
5 1 Singapore 1,383 22 922 45 Thailand 723 24
717 35
(Source; Dealogic)
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