Thai IPO offers expected to be numerous

The first six months of 2011 should continue to see an increase in initial public offerings (IPOs), financial advisers say.

Nimit Wongjariyakul, executive director of Capital Nomura Securities, said relatively high returns for new stocks were supporting investor optimism.

"Interest rates remain low while the local economy is growing strongly and the world economy is steadily recovering. Also, funds keep flowing into Asia and emerging markets," Mr. Nimit said.

Last year was a great year for IPOs, judging by the returns generated by 11 new stocks: seven on the small-cap Market for Alternative Investment and four on the Stock Exchange of Thailand.

Optimism will continue at least in the first six months of this year. For the latter half, he said politics might again pose a risk, as well as the state of the recovery of the global economy.

Sompop Sakpanpanom, chief executive of Asset Pro Management, agreed that the bright prospects of the IPO market would continue over the next three months, given the strong performance of the business sector and financial institutions.

Mespro (1989) Plc (MP), a turnkey construction company, has expressed its confidence in its IPO. It plans to float 80 million shares with a par value at 0.25 baht each.

The company has paid-up capital 60 million baht and once the shares are floated, its capital will be increased to 80 million baht. Its major shareholders are Somsak Thanakitwattana (35 percent), Prasitporn Viriyapraphun (35 percent) and Suriyan Areesinpitak (24 percent).

MP appointed Asset Pro Management as its financial adviser and Capital Nomura Securities as the underwriter. The IPO shares are expected to be sold next month and listed on the MAI in March.

MP recorded revenue of 358 million baht in 2009 and 132.62 million over the first nine months of last year.

Mr Somsak, who is also MP's managing director, said the company expected 2010 revenue to increase more than 200 million baht with a gross profit margin of 12% and a net margin of 5%. MP currently has a backlog of work worth 362 million baht.

APM plans investor road shows for MP in seven provinces in February.