BANGKOK - The Thai
share market closed 0.37% stronger on Friday on
reports that the Shinawatra family planned to sell
its majority stake in Shin Corp to Singapore's
state investment firm, Temasek Holdings.
The Stock Exchange of Thailand (SET)
composite index climbed
2.72
points to 747.70, while the blue-chip SET 50 rose
2.04 points to close at 526.39.
However,
Shin Corp said on Friday that it it had not
received any information that its major
shareholder, Prime Minister Thaksin Shinawatra's
family, was about to sell some stake in the
company.
Thaksin's family owns a 49.6%
stake in Shin Corp, the giant communications group
that is capitalized at $3.5 billion on the SET.
The deal with Temasek is reported to be worth
about US$1.8 billion, making it Thailand's largest
ever.
But Shin Corp said in a statement
that it had not received "any word or information
concerning this matter from the major
shareholder". It said: "The company will inform
the Stock Exchange of Thailand promptly after
receiving the information from Shin's major
shareholder."
However, according to other
media reports, the chief executive of Temasek
Holdings, Ho Ching, will hold a news conference on
Monday to announce the takeover of Shin Corp.
Temasek's buyout of Shin Corp is part of
its investment expansion into Asia. Its wealth
increased by $338 million in the financial year
ending March 31, 2005, including $104 million from
direct investments. The latter was driven by the
portfolio shift into Asia.
Temasek's
investments span from telecom and media to
financial services, property, and transportation
and logistics.
Temasek has more than a 60%
stake in Singapore Telecom, which owns almost 20%
of Advanced Info Service (AIS), Thailand's largest
mobile-phone operator. The takeover of Shin Corp
will make Temasek and SingTel the largest
shareholders in AIS, which is the cash cow of Shin
Corp.
Shin Corp's denial follows a
statement by Thailand's central bank chief that
the Thai baht's strengthening over the past few
days was caused by foreign-currency inflows to buy
Shin Corp shares.
The Thai media have been
awash with reports in the past few weeks that a
selloff of at least part of the 49% stake owned by
Thaksin's family was imminent.
Thaksin,
who has often been accused in the media of
introducing policies favorable to Shin Corp, has
consistently refused to comment on the sale
rumors.
Thaksin's daughter, Pintongta
Shinawatra, is the single largest shareholder in
Shin Corp, with a 14.67% stake.
According
to analysts there are three reasons behind the
decision to sell Shin Corp, which controls AIS,
the budget airline AirAsia, personal-loan provider
Capital OK, satellite operator Shin Satellite, the
free TV station iTV and others.
The first
reason, they say, is that its price has peaked.
Second, Thaksin wants to stop all talk of a
conflict of interest linked to Shin Corp. And
third, the telecom industry faces liberalization
and deregulation under terms of the World Trade
Organization. Thailand's planned free-trade
agreement with the United States will also
accelerate liberalization in the telecom industry.
