SET Roadshow Urges More Japanese Companies To List On Thai Bourse

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SET roadshow urges more Japanese companies to list on Thai bourse

Siriporn Chanjindamanee

The Nation

The Stock Exchange of Thailand has gone on a roadshow to persuade Japanese joint ventures to list while sugar and alternative energy businesses are interested in fund mobilisation through listing.

Chanitr Charnchainarong, SET's executive vice president for issuers and listings, said last week that the exchange has started to meet companies to provide information and invite them to be listed on the bourse. The focus is on joint ventures with foreign companies, particularly Japanese firms.

Earlier, these companies, whose parent firms usually set the profit margins, did not go for a listing as they misunderstood that their margin-fixing policy was transfer pricing, he said.

Most JVs mistakenly believe that those which fix margins were not allowed to apply for a SET listing. However, they can go for a listing with clear information disclosure in the prospectus. An example is a joint venture under the Saha Group. Fixing margins does not mean no growth, as growth comes from higher volume.

This issue has been clarified by the SET and the Securities and Exchange Commission and the next step is to explain it to JVs.

Listing will benefit the JVs and their parent companies, which will earn higher dividends. These JVs will be able to manage their operations independently and mobilise funds by themselves.

Thai shareholders also receive protection from takeovers as companies have more funding channels besides borrowing or capital-raising. In the case of a capital increase, which foreigners prefer, if Thai shareholders do not have enough money to subscribe, their holdings will be diluted.

The high-potential Japanese partners are in the automobile and electronics industries, which are growing although they were hard hit by the floods.

The auto industry is expected to see rapid growth this year due to the government’s promotion of the production of eco-cars and the first car policy, which could prompt Japanese-Thai auto-parts makers to mobilise funds to finance more investment. This gives an opportunity to attract these companies to raise funds in the Thai capital markets.

This year is expected to see the food and alternative energy groups, particularly sugar companies, marching into listing on the exchange. Last year, most of the companies that floated their shares to the public were engineering management firms.

Erawan Sugar Co and Thai Identity Sugar Co are interested in a listing, said a source in the financial advisory business.

Chanitr cited rapidly-growing Khonburi Sugar as an attraction for other sugar companies to be listed on the exchange. Khonburi Sugar, which emerged from debt-restructuring, is now included in the SET100 Index.

This year, the sugar industry is expected to see high growth due to an increase in sugar production and prices.

Some large companies, like Thai AirAsia, Star Petroleum Refining and Akara Mining, also plan to launch initial public offerings this year, he added.

-- The Nation 2012-01-09

[Kaysom]

​A Thai -Japanese JV. Presumably with the controlling percentage of shares in the "listed" JV being held by the Thai partner, in full compliance with the laws of the kingdom., in respect to foreign ownership of a Thai business.I have often wondered what percentage of the voting rights on matters affecting the operations of the JV, those particular shares hold. Anyone know ??