Thailand, Philippine firms lead revival in Southeast Asia IPOs

Home furnishing retailer AllHome Corp’s shares debut at the Philippine stock market on Thursday raised 250.4 million pesos, or about $250 million. (Reuters)
Updated 10 October 2019

Thailand, Philippine firms lead revival in Southeast Asia IPOs

  • Asset World Corporation was the largest initial public offering by a Thai firm
  • Home furnishing retailer AllHome shares debut was the Philippines’ biggest in three years

SINGAPORE/BANGKOK: Thailand and Philippine companies are leading a regional pick-up in initial public offerings (IPOs), spurred by growing investor interest in firms focused on Southeast Asian consumers.
Asset World Corp, the hospitality and property firm listed by Thai billionaire Charoen Sirivadhanabhakdi, and Philippine home furnishing retailer AllHome Corp. raised $1.6 billion and $285 million, respectively.
Asset World made its market debut on Thursday, with shares trading 0.83 percent higher than its IPO price at 6.05 baht each. The company plans to use proceeds to double hotel rooms and retail space.
In the Philippines, AllHome became the third company to tap the local market in 2019, compared with just one IPO in 2018, and its shares debuted 1.04 percent higher at 11.62 pesos ($0.2249) on Thursday.
The home furnishing retailer, owned by the Philippines’ richest man, Manuel Villar, raised 12.937 billion pesos ($250.4 million). An option to sell 168.75 million over-allotment shares could beef up the IPO to $285 million.
“The home improvement industry in the Philippines is under penetrated so we thought of introducing a retail concept with global standards which eventually complements our expertise as the largest homebuilder in the country,” Villar, AllHome’s chairman, said in a statement.
AllHome operates 27 stores and plans to at least double its selling space by end-2020.
Asset World Corporation was the largest IPO by a Thai firm, while AllHome was the Philippines’ biggest in three years.
Singapore still leads on overall first-time share sales in Southeast Asia in 2019, but it has achieved this mainly through offerings of real estate and business trusts.
In Thailand, 11 companies raised a total of $1.9 billion from January to Oct. 4, compared with five firms raising less than $100 million in the same period a year ago, Refinitiv data showed. The data excludes real estate and business trusts.
“We expect Thailand to be one of the stronger IPO markets in 2020. Some more large IPOs have started preparations this year and are set to list next year,” said Ho Cheun Hon, head of Southeast Asia equity capital markets at Credit Suisse.
He said international fund managers continued to be attracted by the growth in consumption across Southeast Asia.
Half of Asset World Corporation’s shares were subscribed by 13 cornerstone investors, including Singapore sovereign wealth fund GIC, which put in about $300 million.
Bankers said the 2020 deal pipeline for Thailand included fund raising by a unit of the country’s biggest retailer Central Group, a retail arm of oil company PTT and others.
PTT’s retail IPO will give investors exposure to 2,000 coffee shops, gas stations and auto repair shops.
Bangkok Commercial Asset Manager, which handles distressed debt, has also filed to list, offering a niche business as there are only two publicly traded debt collectors in Thailand.
“Thai institutions and retail investors are more focused at home ... and there is a lot of capital looking for good investments,” SCB Executive Vice President Veena Lertnimitr said.
AllHome hired UBS as the sole global co-ordinator, and joint bookrunner with CLSA and Credit Suisse. China Bank Capital and PNB Capital are the local underwriters.


Make or break days for global oil ahead of OPEC crunch meeting

Updated 08 April 2020

Make or break days for global oil ahead of OPEC crunch meeting

  • OPEC, led by Saudi Arabia, were on Thursday scheduled to take part in virtual discussions with non-OPEC members, led by Russia, about a possible deal to revive the OPEC+ alliance
  • On Friday, energy ministers from the G20 nations, under the presidency of Saudi Arabia, will convene in another digital forum that will bring in the third part of the global oil equation – the US

DUBAI: The global energy world, in the midst of crisis as demand slumps to unprecedented levels due to the coronavirus disease (COVID-19) pandemic, faces two days that could make – or break – the oil industry for months to come.
Leading producers from the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, were on Thursday scheduled to take part in virtual discussions with non-OPEC members, led by Russia, about a possible deal to revive the OPEC+ alliance that fell apart in Vienna at the beginning of last month.
Then, on Friday, energy ministers from the G20 nations, under the presidency of Saudi Arabia, will convene in another digital forum that will bring in the third important part of the global oil equation – the US, currently the biggest oil producer in the world.
If no deal is reached from the two days of oil summits, the immediate prospect looms of a further fall in crude prices and, with global storage facilities already filling rapidly, the possibility of major exporters “shutting in” oil fields, jeopardizing future production.
Energy experts say the purpose of the meetings is two-fold: To reach agreement on how to limit the vast quantities of oil that are still being produced even as demand collapses; and to present some kind of united front in geopolitical terms in the face of the biggest economic recession since the 1930s.
The most visible immediate sign of any success from the meetings will be an increase in the price of crude oil on global markets. Brent crude, the Middle East benchmark, has lost nearly half its value in the past month.
The first aim – to try to balance oil supply and demand – is the more difficult. Global demand has fallen by at least 20 per cent from the usual daily consumption of around 100 million barrels, oil economists have calculated.
But, following the collapse of the OPEC+ deal that was putting a lid on supply, all producers have been pumping more crude. Saudi Arabia is producing more than 12 million barrels per day (bpd), a bigger volume than at any time in its history. All OPEC members, as well as Russia, have said they will increase output.
In this stand-off, US President Donald Trump intervened last week to say that he had spoken to Saudi and Russian leaders and that he “expected” a cut of 10 million, possibly even 15 million, bpd.
That looks like wishful thinking. For one thing, it would not rebalance markets. Anas Al-Hajji, managing partner of US-based Energy Outlook Advisers, said: “The amount of the cut is relatively small given the major drop in demand.”
There are also some difficult relationships to smooth over in the OPEC+ alliance. Saudi Arabia and Russia exchanged angry statements last weekend, each accusing the other of starting the oil price war. Iran, with big reserves but hampered by US sanctions from exporting in large quantities, said that it might not take part in the conference.
The choreography of the two meetings also presents hurdles. The US will not be present at the OPEC+ meeting, but American Secretary of Energy Dan Brouillette said he would take part in the G20 event.
Because it is a free-market industry, America cannot order its oil producers to reduce output, but most analysts are agreed any attempt to rebalance global supply would be impossible without a US contribution.
By going first, Saudi Arabia and Russia are “playing blind” without knowing what the Americans are thinking. Neither would want to agree big price-restoring cuts only for US producers – under big financial pressure at current levels – to swoop back into the market.
This week there have been some signs that the Americans are considering their own versions of cutbacks. The biggest US company, Exxon Mobil, said it would reduce capital expenditure on future projects by 30 percent; the US Energy Information Administration said oil production would fall by nearly 1 million bpd this year, in response to falling demand and financial pressures.
But even if the Saudis and Russians cut substantially alongside other big OPEC producers such as the UAE, and the Americans enter a long-term pattern of falling demand, it is still hard to see how cuts could reach the 10 million barrels Trump “expects,” let alone 15 million.
J. P. Morgan, the big US investment bank, said that it expects OPEC+ to come up with combined cuts of about 4.3 million barrels, most of that coming from Saudi Arabia, Russia and the UAE. “If it’s 4.3 million it only puts off the day when global storage gets filled completely,” said Robin Mills, CEO of Qamar Energy consultancy.
Storage facilities are nearly at the brim. Malek Azizeh, director of the premium facilities at the Fujairah Oil Terminal in the UAE, joked that he was going to hang a sign on the terminal gates: “Thanks, but no tanks.”