MAI pushes larger free floats

INVESTING / MARKET CHOICES

MAI pushes larger free floats

NUNTAWUN POLKUAMDEE

The Market for Alternative Investment wants to encourage 10 companies with thin trading liquidity to issue new shares and boost their free floats.

The MAI, the smaller sister exchange to the Stock Exchange of Thailand, was set up in June 1999 to serve as an alternative funding source for small and medium-sized enterprises.

Forty-eight companies are listed on the MAI, including six new listings this year. As of Dec 20, market capitalisation was 36.75 billion baht, up from 21.8 billion at the end of 2006.

Chanitr Charnchainarong, the MAI president, said the problem with low trading liquidity stemmed from low free floats and the desire of major shareholders to retain shareholding and management control.

He said the MAI has tried to convince company owners to increase trading and float new shares to ease liquidity problems.''Generally investors seek to invest long-term in stocks with good fundamentals. But if they hold shares without trading, then the stock will have liquidity problems,'' Mr Chanitr said.

One MAI-listed firm, Pack Delta, plans to delist from the market next year. Mauser Holding Asia, which controls 91.8% of Pack Delta, will tender for outstanding shares at a price of nine baht per share.

Mr. Chanitr said the delisting would not affect the overall market, as trading in Pack Delta was low already.

The MAI aims to attract 10 to 15 new listings in 2008, he said, adding that the six new listings this year all had proven successful in the secondary market, with all but one now trading above its IPO price. ''Investors now are more interested in small-cap stocks given their high growth rate,'' Mr Chanitr said.

Trading volume on MAI has continually increased from 27.41 billion baht in 2006 to 80.46 billion baht on Dec 20. Daily trading rose from 112.81 million baht to 335.24 million baht.