What's new in business news: August 16, 2013

MK restaurant IPO a success, 15 year high in new home registrations & rubber price falling so govt help on the way.

STOCK MARKET

IPO for MK restaurant chain successful 

Shares of the suki (hot pot) restaurant chain operator MK Restaurant Group Plc (M) rose as much as 13.3% on their stock market debut on Thursday, indicating investors remain hungry for initial public offerings (IPOs).

The stock ended the day at 53 baht or 8.16% above its initial public offering (IPO) price which was set at the top end of its indicative price range of 45-49 baht apiece.

9.1 billion baht was raised from allocating 185.85 million shares to the public. This made the IPO the second largest IPO this year after BTS Group Holdings Plc (BTS) in April raised 62.5 billion on the sale of its infrastructure fund, the BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF).

MK has two main restaurant brands - MK and Yayoi - with 460 outlets in Thailand and 42 outlets in Japan, Singapore and Vietnam. The restaurant plans to open its first branches in Indonesia this quarter and the Philippines and Myanmar in the near future.

MK will use the IPO proceeds to build a central food-processing plant, expand additional outlets, and reserve some as working capital. [Read the rest of the article here].

AGRICULTURE 

B30bn from govt to help rubber industry

The government proposed a 30-billion-baht budget to shore up rubber prices and help the ailing rubber industry.

Affected by the slow global economy, the prices of unsmoked rubber sheets have tumbled to around 70-72 baht per kilogramme this week from 100 baht on average a year ago.

Under the rescue plan, 10 billion baht will be used to support small planters - those who operate on less than 10 rai - to improve output while using less farmland. Essentials such as better saplings will be provided.

There are about 900,000 small planters, accounting for 76% of all rubber planters in the country.

Part of the fund will go to compensating planters who chop down rubber trees older than 25 years and persuading them to plant other crops in line with the government's farm zoning.

Another five billion baht will go to the Bank for Agriculture and Agricultural Cooperatives (BAAC) to extend low-interest loans to farm cooperatives which manufacture high-value rubber products such as blocked rubber and compound rubber, instead of traditional raw rubber sheets.

The remaining 15 billion baht will be lent through commercial banks to companies investing in rubber-based products. 

Earlier, the government spent 20.2 billion baht to buy 200,000 tonnes of rubber from planters to help absorb supply and push up domestic prices.

But the persistently weak market makes it difficult for the government to release the stockpile for fear of further depressing the market prices.

China is the major buyer of Thai rubber products, and as China's economy slows, rubber prices are affected. [Read the rest of the article here]

REAL ESTATE

New homes hit record high

The number of newly registered housing units continue to skyrocket. A total of 125,000 new registrations are expected this year, a 15-year high.

Amid concerns about the high potential of a real estate glut, the Bank of Thailand recently cautioned housing developers to beware of oversupply, particularly of condominiums along skytrain routes, and potential mortgage defaults by homebuyers.

Lenders have also tightened their mortgage criteria by cutting loan-to-value ratios to prevent speculation in the wake of high household debt. But that has not yet cooled down the property market.

The numbers are being boosted mainly by the condominium sector. This is a result of the boom in new high-rise residential units in line with the mass transit expansion.

In the first half of this year, newly registered housing units in Greater Bangkok totalled 57,300, up by 7% year-on-year. Newly registered condo units numbered 31,500, down by 2% from the same period last year and 55% of the total number. But the number townhouses rose to 6,600 (11.5% of the total) and shophouses increased to 5,100 (8.9% of the total). [Read the rest of the article here]