Thailand Capital Markets Deal
Jasmine International’s Bt37bn (US$1.1bn) listing of its broadband infrastructure assets lured foreign investors back to the politically charged Thai equity market and cemented the case for income stocks, despite the uncertainty over global interest rates.
Jasmine Broadband Internet Infrastructure Fund was South-East Asia’s biggest IPO in a challenging 2015, with weak currencies and commodity prices weighing on demand for emerging-market risk.
Despite that backdrop, the infrastructure fund, similar to a real estate investment trust in other markets, deepened the market for telecom infrastructure assets and created a tax-efficient vehicle for the sponsor.
Jasmine first announced plans for the IPO in 2013, before spending time to work through legal challenges to create an optimal structure for the fund. The pre-marketing process in October 2014 also revealed the extent of the challenge the company faced.
Thailand’s first pure fibre-optic cable fund hit the market in February, marketing 3.7bn units at an indicative price range of Bt10–Bt10.50 each. At the bottom of the range, the fund offered a forecast yield of 9%.
The high yield, together with stable returns and the potential for long-term growth, proved a lure for investors. Foreign investors, a rare sight in recent Thai listings, turned out in force, in contrast to the cash-rich local institutional and retail investors, who had supported the True Telecommunications Growth Infrastructure Trust’s Bt47.6bn IPO in December 2013. The Bt15bn infrastructure fund IPO of Electricity Generating Authority of Thailand in June 2015 was also sold mainly to domestic investors.
Jasmine bucked this trend at a time of considerable uncertainty over the direction of global interest rates.
Jasmine’s units, priced at Bt10 each, were sold mainly to foreign investors, who took up more than half of the offering. About 23% of the units went to Asian investors outside of Thailand, 26% to US investors and 2% to European and Middle East investors. Thai investors bought 49% of the float.
The top 10 foreign funds were allocated around 70% of the international tranche.
In terms of investor type, 51% of the units were sold to long-only funds, 48% to hedge funds and 1% to private wealth management accounts.
After a rocky start, the stock has proven to be remarkably stable, trading in a tight range of Bt9–11 since listing.
SET-listed sponsor Jasmine International holds a stake of 33.33%.
Morgan Stanley was the sole international global coordinator on the offering and Bualuang Securities was the sole domestic bookrunner.
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