Bangkok Post Nikhil B. Srinivasan Column.

Byline: Nikhil B. Srinivasan

Nov. 1--Reading the newspapers this week, one could be forgiven for thinking we are in the midst of a bull market. The government confirmed that the PTT listing would proceed with a price range of 31-35 baht a share, marking the first major privatisation in years. Internet Thailand, another (significantly smaller) privatisation, was said to have generated strong demand.

Meanwhile, the consumer finance firm Aeon announced plans for its listing and Home Products closed up 12 percent on its first day of trading. Separately, two large firms -- Advanced Info Service and Land and Houses -- revealed plans for imminent bond offerings.

But we are certainly not in a bull market and the SET reminded us of that, closing down 1.5 percent on Tuesday and gaining back 0.5 percent yesterday. With puny daily trading volumes barely touching two billion baht, the market is being ignored. But a successful listing of PTT might be the beginning of something good.

The listing would be good news for the privatisation process mainly because it gets the process going. People who question the timing and low pricing of the issue are missing the point. The principal goal is to get the government's ambitious privatisation programme started. The listing of PTT will do just that. As I noted in this column several weeks ago, that's critical for the programme and the economy.

The price is less important at this point. There is no guarantee that by waiting until the New Year that pricing may improve. So, forget the price. Just get the issue out. As for foreign investors, whatever they may say in public, if the issue is priced reasonably (as is likely), they will be buyers -- during the process and certainly after listing. As one of the largest stocks on the SET by market capitalisation, PTT will be difficult to ignore totally for those benchmarking themselves against the various regional indices.

The listing would be good news for PTT itself. The company will be able to lower its debt level and raise money for capital expenditure. As for transparency, those questions are important but simultaneously moot at this point. Of course, the government will remain in control of the company. However, since the government may eventually want to reduce its stake further, it has an interest in maintaining a decent price on the stock through an improvement in corporate governance.