By Khettiya Jittapong and Elzio Barreto
BANGKOK/HONG KONG (Reuters) - Southeast Asia's red-hot stock markets could see a spurt of listings this year after Thailand's record IPO rose more than a fifth on its trading debut, far outpacing gains in the broader market and the rest of the region.
BTS Group Holdings PCL's infrastructure fund soared as much as 22 percent after pricing the country's biggest ever IPO on the top of expectations. It's unusual for gains of that magnitude on an IPO of that size priced at the top of the marketing range, boding well for companies with plans to list in Thailand this year that include two mid-tier airlines.
At $2.13 billion (1.39 billion pounds), the infrastructure fund was the largest initial public offering in Asia ex-Japan so far this year and followed a string of successful listings in countries like Indonesia and the Philippines where share markets are soaring.
"Several countries especially in Southeast Asia are spending a lot of money on infrastructure. When the stock markets are performing well like this, the launch of an infrastructure fund will be a good option for companies to raise money," said Kasem Prunratanamala, head of research of CIMB Securities in Bangkok.
LT Group Inc <LTG.PS>, controlled by tycoon Lucio Tan, raised $912 million in a record stock offer for the Philippines on Wednesday. Indonesia's Matahari Department Store Tbk PT <LPPF.JK> raised $1.3 billion in March and Singapore's Mapletree Greater China Commercial Trust <MAPE.SI> pocketed $1.3 billion from an IPO in February.
Companies planning to list Bangkok this year include Bangkok Airways and Nok Air, power producer CK Power, industrial developer Amata VN and Malaysia's CIMB Group Holdings Bhd.
Equity issuance in Thailand reached an all-time high of $10.03 billion in 2012, including IPOs and follow-on deals, according to Thomson Reuters data. Issuance has totalled $3.9 billion so far in 2013, on pace to surpass last year's record.
Thailand's stock market, already one of the best-performing in the world, has added 9.9 percent so far this year. The country's economy grew 6.4 percent in 2012, driven by abundant natural resources, strong exports and a burgeoning middle class.
Indonesia's market has surged 16 percent in 2013, hitting an all-time high this week. The Philippines, which won its first investment-grade rating in March, is up 18 percent.
The buoyant markets have prompted banks including Citigroup Inc <C.N> and Goldman Sachs & Co <GSGSC.UL> to shuffle staff and boost hiring in a bid to win new businesses.
With a rising middle class, growing economies and large population, Southeast Asian countries are also taking centre stage for private equity firms. Carlyle Group LP <CG.O> has tapped Rajiv Louis, a banker with a decade of dealmaking experience in Indonesia, to be its country head.
Completed Southeast Asia M&A deal volume jumped from less than $100 million in the first quarter of 2009 to $1.8 billion in the first quarter of 2013, according to Thomson Reuters data. Over the past two years, M&A volume has reached $113 billion, compared with just $20 billion in the six years before that, the data show.
The BTS Rail Mass Transit Growth Infrastructure Fund <BTSGIFu.BK> rose as high as 13.20 baht from the 10.8 baht per unit IPO price.
It traded at 12.3 baht in mid-afternoon, while shares of BTS Group <BTS.BK>, the operator of Bangkok's traffic-busting elevated Skytrain, gained 1.6 percent. The benchmark SET index <.SETI> was up 0.7 percent and the MSCI's index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose 1 percent.
The BTS fund was priced to return a yield of 5.8 percent. This compares with an average 3.7 percent yield on real estate investment trusts (REITs) traded in Japan, 5.3 percent average for REITs in Singapore and 4.4 percent in Hong Kong, according to Asia Pacific Real Estate Association (APREA) data.
As sponsor of the fund, BTS will remain its largest shareholder after the IPO following its purchase of a third of the units on offer.
The Skytrain began operating in 1999 and covers about 23.5 kilometres (14.5 miles) of greater Bangkok, carrying more than 600,000 passengers each week day above the Thai capital's traffic-snarled streets.
The infrastructure fund will own the net farebox revenue generated from the SkyTrain network through December 2029, when the concession for the lines expire. Revenues from the SkyTrain core network jumped 21.2 percent in the fiscal year ended March 2012 compared to the previous year, to about 4.3 billion baht.
Morgan Stanley, Phatra Securities and UBS <UBSN.VX> acted as joint bookrunners for the IPO. The banks stand to earn about $30 million in fees from the deal, equivalent to 2.15 percent of the total raised excluding the sponsor tranche.
(Reporting by Elzio Barreto and Khettiya Jittapong; Editing by Stephen Coates)