Steady fund demand seen in 2014

Fund mobilisation by Thai corporations this year is expected to drop to Bt1 trillion from Bt1.2 trillion last year because of the slowdown in the Kingdom’s economic growth, but Bt1 trillion is regarded as fitting for the country, Vasin Vanichvoranun, an executive vice president at KBank, said yesterday.

Gross domestic product is forecast to expand at 4.5 per cent next year, faster than the expected 4 per cent for this year, so demand for funds in 2014 should stay at Bt1 trillion, the same as this year.

KBank is upbeat on the global economy supporting the Thai economy next year. The US economy is forecast to grow by 2.4 per cent in 2014 compared with the 1.9 per cent expected this year, while China’s GDP will grow by 7.5 per cent, up slightly from 7.4 per cent. 

The brighter outlook for the global economy should stimulate Thailand’s private investment and exports.

KBank projects private investment will rise by 5.3 per cent next year from 3.3 per cent this year and exports by 7 per cent, up from 4 per cent. 

Based on the demand for Bt1 trillion, the bank looks for about 770 deals to be transacted in the country this year, down from 800 last year. 

Loan demand is expected to accelerate by 8 per next year cent against the 7.5 per cent expected this year, Vasin said.

Panop Ansusinha, head of investment banking, said the bank’s corporate customers were expected to seek Bt150 billion to Bt200 billion in the capital market over the next 12-18 months.

Even though the outlooks for the market and interest rates are stable, the bank recommends that its customers prepare for fund-raising through the capital market, especially for long-term funds.

The deals of Bt150 billion to Bt200 billion include an “A-” rated structured bond issued by a listed company in the renewable-energy sector, which should be seen next month. Two infrastructure funds for energy companies worth a combined Bt10 billion are expected to be launched in six to eight weeks. The other deals are initial public offerings, property funds and real-estate investment trusts.

The bank plans to offer a liquidity-management service to support the appetite for funds of local corporations next year, Panop said.

Vasin said the bank had two or three deals lined up for mergers and acquisitions. One of them is in the food industry.

“The bullishness for fund-raising in the capital market also bolstered fee income by 10-12 per cent in the first half of this year. We believe fee-income growth will hit the target of 16 per cent for the whole year,” he said.