Nok Air debut on SET seen as success as bourse stays around 1,400 level

Nok Air’s shares began trading at Bt26.75, or Bt0.75 higher than its initial public offering price of Bt26, and closed at Bt26.50, up Bt0.50 from the IPO price. During book building, the price peaked at Bt28, but because of current market fluctuations, the company decided on Bt26.

Meanwhile, the SET Index opened at 1,396.7, down 41 points, still feeling the effects of hints of a reduction of stimulus measures by the US Federal Reserve. It recovered somewhat, closing at 1,402.19, down 35.51 from Wednesday.

SET president Charamporn Jotikasthira believes recent remarks by Fed chairman Ben Bernanke on a possible early end to quantitative easing are actually reason for optimism, at least making clear that the stimulus package will be terminated sooner of later. When that happens, the global market will be hit, but only in the short term. For Thailand, there is nothing to worry about because its fundamentals are still strong, he says.

Nok Air chief executive officer Patee Sarasin was pleased with the results of the low-cost carrier’s first day of trading. Even as the market is uncertain, he believes Nok’s shares will attract investment for the long term.

Some analysts projected its price would go up to Bt44 this year with a price-to-earnings ratio of 22 times. At the final offered price, the PE ratio was approximately 11.5 times.

Patee said the company was committed to paying a dividend of at least 25 per cent of net profit, along with service improvement to keep its business performance active. In the first quarter of this year, its net profit was Bt425.3 million on sales of Bt2.81 billion. Last year, it netted Bt504.7 million on revenue of Bt8.21 billion.

The carrier projects carrying more than 5 million passengers this year, up from 4 million last year. Its cabin factor should be about 80 per cent, thanks to its strong base in secondary markets.

Nok Air’s top three shareholders after the IPO are Thai Airways International with 39.2 per cent, followed by Aviation Investment International with 10 per cent and Laddawan Fund Co with 4.8 per cent.

Nok Air floated 187.5 million shares via its IPO and expects to raise Bt3.25 billion to expand its business and aircraft procurement. Its par value is Bt1.

The firm currently has 22 aircraft in its fleet and expects to have 30 by 2015.