Virus Turns Thai Firm Into World’s Top Asset Manager Stock
Thailand’s biggest manager of distressed assets has become the world’s top performer among its peers this year.
(Bloomberg) -- Thailand’s biggest manager of distressed assets has become the world’s top performer among peers this year partly because the novel coronavirus outbreak is wreaking havoc on the nation’s economy.
Shares of Bangkok Commercial Asset Management Pcl -- known as BAM -- have surged 74% this year, and the firm has delivered the highest total return in the period among asset management companies with a market value of at least $1 billion, according to data compiled by Bloomberg. The stock has almost doubled since its listing in December, when the Bank of Thailand more than halved its stake.
Investors are betting slower economic growth will spur opportunities for the distressed-assets firm. Southeast Asia’s second-biggest economy will probably expand less than 1% from a year earlier this quarter due to the chilling impact of the viral outbreak on tourism, according to the government.
“BAM’s business and outlook runs counter to the economic cycle,” said Chalie Kueyen, an analyst at KGI Securities (Thailand) Pcl. “The company will benefit from buying more distressed assets at a much cheaper cost due to the economic slowdown.”
A block of 14.4 million shares in the distressed asset manager changed hands at 30 baht apiece at 9:58 a.m. Bangkok time, according to data compiled by Bloomberg. Shares fell as much as 5.6% amid the 432 million baht block deal.
BAM was set up to manage the bad debts of lenders that had been seized or shuttered by the central bank after the mid-1990s Asian financial crisis. The firm in December sold 1.77 billion shares for 30.9 billion baht ($990 million) in Thailand’s second-biggest IPO in 2019.
After the rally, BAM’s shares have an “unattractive valuation” due to its modest earnings growth, said Kittima Sattayapan, an analyst at SCB Securities Co. The stock, which trades at about 24 times its 12-month earnings estimate, has an average price target of 27.3 baht, 13% below its Friday close, according to data compiled by Bloomberg.
--With assistance from Lee Miller and Abhishek Vishnoi.
To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net
To contact the editors responsible for this story: Sunil Jagtiani at sjagtiani@bloomberg.net, Margo Towie
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