Thai firms face pressure on free float rules<\/p>\n
BANGKOK (Reuters): About a quarter of listed Thai firms are
\nunder pressure to offer more shares to the public or face
\neventual delisting, as the stock exchange strives to boost
\nliquidity and improve overall market attractiveness.<\/p>\n
Analysts said some big-cap stocks like Thai Airways
\nInternational may have to speed their privatization plans to
\nincrease free float while state-run banks like Krung Thai Bank
\nand BankThai would have to offer shares to the public.<\/p>\n
Surat Palalikit, executive vice president of the Stock
\nExchange of Thailand (SET), said last week the exchange had given
\nlisted firms a June 30 deadline to meet a requirement of having
\nat least 10 percent of their shares in free float.<\/p>\n
Under Thai regulations, listed firms are required to have at
\nleast 150 retail shareholders, with a combined holding of at
\nleast 10 percent of paid-up capital, or annual share trade of
\nleast 10 percent of paid-up capital for two consecutive years.<\/p>\n
But the rules have not previously been strictly enforced, and
\ncurrently more than 80 firms fail to comply with the rules.<\/p>\n
Surat said the SET will not delist those firms immediately but
\nwill give them a grace period from June for adjustment.<\/p>\n
"The SET will consider the time available for listed firms to
\nfollow through with this regulation. If the company is unable to
\ncomply, the SET will proceed accordingly," Surat said.<\/p>\n
If no plans are put forward by these firms to increase their
\nfree float above 10 percent, then the exchange will suspend the
\nshares from trade and eventually delist them.<\/p>\n
Analysts have said the lack of liquidity of many stocks and a
\n49 percent limit on foreign ownership of Thai companies make Thai
\nstocks less attractive to foreign investors.<\/p>\n
The tightening on free float rule came after a stock market
\ninvestigation into wide price fluctuations recently in BankThai.
\nLess than one percent of BankThai's shares are freely traded,
\nwhich analysts say leaves its share price open to manipulation.<\/p>\n
"The increase in free float will help reflect more a real
\npicture of the market. This should expand investment
\nopportunities for a wider base of investors," said Sukit
\nUdomsirikul at Capital Nomura Securities.<\/p>\n
Meanwhile, in a bid to pull itself out of severe doldrums,
\nThailand's stock exchange will hold its first-ever "Investor
\nFair" next month to tell grass-roots investors that the stock
\nmarket is not just for the experts.<\/p>\n
Stock Exchange of Thailand President Vicharat Vichit-Vadakan
\nsaid the exchange is expecting as many as 200,000 people to
\nattend the five-day event starting June 8 at an exhibition center
\non the outskirts of Bangkok.<\/p>\n
"We are trying to present the stock market as something not
\ndifficult, something not complicated, something not far away from
\nyou, and saying investment in the stock market should be
\nconsidered when thinking about where to put your money,"
\nKriengchai Boonpoapichart, a vice president of the exchange, said
\nin a recent interview.<\/p>\n
He said that less than 5 percent of Thailand's total
\npopulation hold shares, compared to about 30 percent in the
\nUnited States and more than 50 percent in some European countries
\nsuch as Finland.<\/p>",
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