PTT Chemical Closes Day at B84.50
By Bangkok Post, Thailand
Dec. 14–Shares of PTT Chemical, the newly formed petrochemical arm of PTT Plc, ended their first day of trade on the Stock Exchange of Thailand yesterday at 84.50 baht in heavy volume of 1.01 billion baht.
The company, formed from the merger of National Petrochemical Plc and Thai Olefins Plc, opened the day at 89 baht and represents the largest company in the SET petrochemical sector by market capitalisation.
The broad SET index fell 4.26 points to 693.48 on trade worth 16.3 billion baht as investors looked to today’s meeting of the central bank’s Monetary Policy Committee for the direction of short-term interest rates.
Most analysts expect the central bank to hike its 14-day repurchase rate, now at 3.75 percent, by at least a quarter-point to curb inflationary pressure and keep domestic rates in line with US rates.
Amarej Singnarong, research head at Adkinson Securities, said the market was in a consolidation period ahead of today’s central bank meeting, adding that investors already expected a quarter-point increase in rates.
“We believe that Thai commercial banks won’t wait long to follow suit with interest rate adjustments. Even though they raised rates only just last week, we expect to see another rate hike later this month or early 2006,” Mr Amarej said.
He added that the SET last week rose 5.7 percent overall, with the SET50 index up 6.6 percent and foreign institutions net buyers of $325 million in securities.
Adithep Bhisalbutr, the PTT Chemical (PTTCH) president, said the company was the largest olefins company in Thailand with a production capacity of 1.523 million tonnes per year.
He said 2006 revenues were expected to reach 60 billion baht, up from 57 to 58 billion this year, given current price trends in the world market.
Mr Adithep said that by 2007, the company planned to lift its ethylene production capacity to 1.27 million tonnes per year from 1.14 million, making PTTCH the third largest producer in Asia.
PTT Plc, the country’s largest oil-and-gas conglomerate, holds 50 percent of PTTCH. Prasert Bunsumpun, the PTT Plc president, said by 2007, PTT would become a holding company with its business operations run through subsidiaries PTT Chemical, PTT Polyethylene and PTT Refinery.
All three are expected to rank among the top 10 in terms of market capitalisation for listed firms, he said, adding that PTT was also studying plans to merge The Aromatics with its refineries in Rayong.
Mr Prasert said PTT and its strategic allies had also completed their share purchase of a 61.5 percent stake in Thai Petrochemical Industry.
PTT will be the largest shareholder of TPI with a 31.5 percent stake bought for 20.27 billion baht. Three other partners — the Government Pension Fund, the Vayupak Fund and the Government Savings Bank — took 10 percent each in TPI.
Under TPI’s restructuring plan, 17.55 billion new and existing shares were placed with strategic investors, existing shareholders and creditors for 3.30 baht per share, raising 57.9 billion baht for debt repayments.
Mr Prasert said after TPI exits court-supervised debt rehabilitation next year, the company would refinance its remaining $950 million in debt and open talks with creditors to enable the company to make new investments.
He said PTT had not yet considered whether it would increase its holdings in TPI in the future, possibly to a majority so that it could consolidate the company into PTT’s accounts.
Shares of PTT closed yesterday on the SET at 230 baht while TPI ended at 7.40 baht, down 15 satang.
By Ploy Chitsomboon & Busrin Treerapongpichit
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