Published on January 31, 2005

Private-fund unit banks on IPO trend

With the expected burgeoning of its initial public offering (IPO) shares, the private-fund unit of SCB Securities is offering its Privileged Select IPO service to customers with investment portfolios worth Bt20 million and over.

With dozens of IPO shares having debuted poorly last year, Kitigorn Tiwaporn, SCB Securities’ chief investment officer and head of its department of Private Fund Management, said he hoped underwriters would learn from failures and set reasonable IPO prices.

“Early this year three IPOs started trading on the stock market. Although one of them failed, the other two look strong,” he said. “We are planning to launch a number of IPOs this year, and most of them will be carefully priced by underwriters.”

“Prices will be more realistic and reasonable enough to attract stock investors. In addition, more foreign investors are entering the Asian market this year, and therefore many stocks are performing well.”

SCB Securities launched its Privilege Select IPO private fund last year, and its returns are attractive, Kitigorn said.

“Last year our fund only invested in the IPO shares of Thai Oil Plc on behalf of our clients,” he said. “While waiting for more fundamentally sound IPOs to be launched, we’ll invest our clients’ money in bond funds. Once we adjudge new IPOs to be promising, we’ll transfer money into the equity market.”

The Select IPO is a Bt1-billion fund, more than Bt500 million of which has been raised.

SCB Securities’ private fund plans to launch more products this year to better serve the needs of its clients.

“We don’t go for just any customer. Our clients are special,” Kitigorn said. “We’re planing to service only 100 VIP customers. Currently we’re managing Bt450 million belonging to 12 customers.”

Kitigorn said he believed the Deposit Insurance Agency to be set up by next year would be a key factor in sparking interest by investors with deep pockets.

“Today there’s only Bt20 billion invested in private funds, so there’s plenty of room for growth. Private funds will offer promising alternatives for investors, especially the ones with plenty of wherewithal,” he said.

Apart from the Privileged Select IPO, SCB Securities is also offering several new private funds: Privileged Cash, Privileged Principal Preservation, Privileged Income, Privileged Max and Privileged Focus.

Piyarat Setthasiriphaiboon

The Nation

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