Wednesday, July 17, 2019

Brokers plan dual listing of RP firms on Thai exchange

Oct 03. 2018
Win Udomrachtavanich, left, executive chairman of KTBST, and Jaime Martirez, CEO of Unicapital Group.
Win Udomrachtavanich, left, executive chairman of KTBST, and Jaime Martirez, CEO of Unicapital Group.
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KTB SECURITIES Thailand Plc (KTBST) and the Philippines -based Unicapital Group are collaborating to bring the top 10 Philippines-based companies for dual listings on the Stock Exchange of Thailand as well as assisting institutional investors from both countries to invest in cross-border equities, fixed income assets and other financial products.

“We aim to list the top 10 listed companies in the Philippines on the Thai stock market, and we’re discussing the plan with the SET and Securities and Exchange Commission," Win Udomrachtavanich, executive chairman of the KTBST said yesterday.

 “We may see the dual listings happen next year,” he said after signing the MoU for cooperation with Unicapital Group yesterday, a brokerage firm based in the Philippines.

 The two brokerage firms will cooperate in three key areas - investment banking, dual-listing and infrastructure fund establishment, he said, adding that KTBST will help Philippines corporates raise funds via equities, bonds and alternative investment products.

The company will also promote dual listing for both Thai and Philippines companies. Given the high liquidity in the Thai capital market, it would be an attractive venue for raising fund and dual-listing activities, he said.

Thailand’s capital market is larger than that of the Philippines with the SET market capitalisation at 120 per cent of the country’s gross domestic product (GDP). The Thai market is also effective in promoting infrastructure funds and the two brokerage firms could help Philippines corporates set up such funds here. Vice-versa, Thai investors also look abroad. With high GDP growth and a young population, Philippines offers vast investment opportunities, he said.

Jaime Martirez, chief executive officer of Unicapital Goup, said that Philippines corporates are looking for raising funds in foreign countries. “They have raised fund in Singapore, why they would not do in Thailand,” he said.

Philippines investors view the Thai economy as stable and the baht currency strong. 

He also expected more merger and acquisition (M&A) activities both ways as corporates expand their businesses.

For Thai investors looking for portfolio investment opportunities in the Philippines , they may look at many sectors including services, infrastructure, retail trade, energy, hotel and property, he suggested. 

The Philippines government has been spending big on infrastructure and energy projects. 

As the country has enjoyed steady economic growth for more than decades, it has also led to high demand on fossil energy and clean energy. High demand on office building has recently led to double-digit rise in property valuation, he said.

The Philippines economy grew 6.7 per cent last year, the fastest rate in the region. 

The International Monetary Fund forecasted the country’s growth rates at 6.5 per cent and 6.7 per cent this year and next respectively. Foreign direct investment into the country hit a record high last year, reaching US$10 billion, he said.

However, the country is now facing several challenges, including rising inflation due to several factors such as the recent damages caused by typhoon Mangkhut , according to Martirez.

 Tax reform introduced by the government has also fuelled inflation as the government plans to lower the income tax rates in the future, he said.

Capitals have been leaving the local capital market due to the US Federal Reserve hiking its policy rate as well as the uncertainty over the trade tensions between the US and China. These have also led to depreciation of the peso currency.

These issues are expected to be temporary and the Philippines monetary authorities are currently addressing the issue of inflation, he said.


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