The initial public offering (IPO) stock frenzy that has whetted investors' appetites over the past four or five years obviously lost its shine this year.

The outlook for 2007 is also quite dull, given the few large market-cap stocks lining up to list in the stock market.

More importantly, a measure allowing newly listed firms on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI) to pay a reduced corporate tax rate expires next Sunday. SET-listed companies currently pay a rate of 25 per cent and MAI-listed firms 20 percent, while companies not listed on either bourse must pay 30 per cent. It is unclear whether the Finance Ministry will extend the tax break, because only 170 firms have listed on either bourse since the measure was first adopted in 2001.If the process goes through as planned, PTT subsidiary Star Petroleum Refining and Skytrain operator Bangkok Mass Transit System will be listed next year on the SET.

However, declining oil prices would limit investors' interest in Star Petroleum Refining's plan to go public.

The only excitement next year will come from the first ever dual-listed securities on the SET for Total Access Communication (DTAC), but saturation of the mobile-phone market would not give this listing much appeal.

The planned listing in Thailand was approved by DTAC shareholders last month.

In October 2005, DTAC revealed it would float 44.4 million shares through an IPO in Thailand. The country's second-largest mobile-phone operator itself will issue 16.4 million new shares with a par value of Bt10, and DTAC shareholder United Communication Industry will sell the rest.

DTAC shares are now traded on the Singapore Exchange (SGX).

Apart from this, there is no sign of big-capital companies planning to list on the SET. There will probably be no state enterprises entering the market, as this year's case involving the Electricity Generating Authority of Thailand seemed to shut the door on privatised companies listing on the stock market.

Chang Beer manufacturer Thai Beverage is already listed on the SGX. The possibility for Thai Beverage to conduct a dual listing looks dim, because the Securities and Exchange Commission has yet to give any support for the alcohol firm's listing.

Tracking back to 2003, when the IPO frenzy reached fever pitch, 21 companies listed on the SET with a combined Bt100.36 billion worth of market capitalisation. The share price of only two stocks failed to stay above the IPO prices on their first day of trading.

With a number of large market-cap stocks, including Thai Oil, Airports of Thailand, MCOT and Thainox Stainless, going public, a total of 34 newly listed companies in 2004 had a combined market cap of Bt227.29 billion.

Although the number of new IPO stocks last year was identical to that in 2004, market capitalisation was reduced to Bt110.95 billion.

In the first half of this year, the situation looked more unfavourable for the IPO market, due to growing political uncertainty. There were only 12 IPOs, and only five of them managed to offer gains to shareholders on their debuts.

If it wasn't for Rayong Refinery's Bt50.31-billion IPO, then the market capitalisation for new IPOs this year would not have reached Bt92.99 billion.

This was similar to the Market for Alternative Investment (MAI), which was founded in 2001. In 2003, it featured five IPOs, followed by 14 each in 2004 and 2005. This year, the number of IPOs decreased to six; among these, only one was listed on the MAI in the first half.

The SET has set a target of 64 companies seeking listings on local stock markets next year. Of those, 40 would list on the SET and 24 on the MAI.

This is part of the SET's plan to raise total market capitalisation next year from the current Bt5.5 trillion to Bt5.62 trillion.

It is hopeless to depend on big new IPOs, so the SET is considering whether it is realistic to ask Thai units of multinational companies to list on the bourse as part of its drive to increase its market capitalisation. Noting that there are thousands of multinationals operating in Thailand, the SET will seriously study whether this option might be feasible.

Although local units of multinationals say they do not need to raise funds on the SET, because they can obtain funds from their parent firms, there are examples of such units listing in other countries.

The SET earlier said it was considering Thai companies operating abroad as listing candidates. Amata (Vietnam), which operates the Amata City Bien Hoa, was reportedly interested.

SET president Patareeya Bencha-polchai recently said the target was for the bourse's market capitalisation to equal the country's gross domestic product within five years.

The SET's three-year plan stipulates it should have a total of 5 million investor accounts next year.

Currently, there are 1.05 million stock-trading accounts, 805,000 accounts in equity mutual funds, 1.7 million accounts in provident funds and 1.17 million Government Pension Fund members, totalling 4.725 million accounts.

These should increase to 5 million next year, with active trading accounts rising to 200,000, from between 120,000 and 150,000 now.

Piyarat Setthasiriphaiboon

The Nation