Shares of Thailand's biggest brewer and distiller opened at 28 Singapore cents (Bt6.79), the price the company sold shares for in the S$1.37 billion IPO, and closed down 3.6 per cent at 27 cents. Some 316.2 million shares were traded.

The Straits Times Index ended up 1.63 points, or 0.1 per cent, at 2441.54 points.

Brokerage firm CIMB-GK noted in a report that the brewer, despite its dominance in the Thai market, faces margin pressure from rivals and has seen its market share decline from 68 per cent in 2003 to 60 per cent in 2004.

"Thai Beverage is a dominant player in Thailand's beer market. However, its market share has been falling in recent years … Management expects further declines in 2005 and 2006," the brokerage said.

The brewer of Chang Beer had priced its IPO shares at the low end of its indicative range due to recent turmoil in Asian markets. It was the city-state's biggest IPO since the sale of Singapore Telecommunications in 1993.

Thai Beverage chose to list in Singapore after an attempt to float its shares in Thailand was opposed by conservative activists who said the listing would encourage Thais to drink alcohol and was contrary to the beliefs of the Kingdom's Buddhist majority.

A Thai Citizen Party politician last week filed a petition against caretaker Finance Minister Thanong Bidaya, accusing him of failing to keep Thai Beverage in the Thai market. He also urged Thanong to immediately approve Thai Beverage's listing on the Thai bourse.

However, Thanong said yesterday that he would not interfere in the listing approval process of the Securities and Exchange Commission.

"The SEC board can consider this issue with full independence," he said.

Losing Thai Beverage to the Singapore Exchange is hurting the Thai stock exchange, which is in dire need of boosting its attractiveness through higher market capitalisation.

Still, the Stock Exchange of Thailand yesterday reiterated that despite the absence of Thai Beverage, initial public offerings for this whole year would reach Bt150 billion as expected, though admitting that the number of IPOs should be revised downward to reflect the overall bearish sentiment. Last year, Bt120 billion was raised from the Thai exchange.

SET executive vice president Sopawadee Lertmanuschai said that while there have been only a few companies raising funds so far this year, large companies including Bangkok Metro Plc, are among them.

"We're certain that the market capitalisation will double to Bt10 trillion in the next five years as planned. We believe that market sentiment will improve next year as our price-earnings ratio is relatively lower than in other markets."

However, the target of new listed companies for both the SET and its sibling Market for Alternative Investment would be revised down from 100 due to the uncertain political situation and bearish sentiment. Sopawadee forecast that at least 50 companies would list this year.

Agencies, The Nation