Rangsit University reveals research results, finds investment in Healthcare IPO stocks in Thailand has the best returns in ASEAN
Rangsit University announced the results of research on finance and investment in the hospital business by Dr. Kulbutr Komenkul, Deputy Dean for Administration and International Affairs, College of International Affairs and Lecturer in Finance and Investment, Faculty of Business Administration, Rangsit University. It was found that investing in new stocks in healthcare services will give higher returns than the average market returns. It was also found that Thai hospital stocks, if held long-term, will give the best returns in ASEAN, especially stocks entering the new market in the medium and small hospital groups, which will have better returns than large hospitals. The research found that the reason why investing in hospitals is a good investment option is because in the past decade, the cost per person for health products and services worldwide has increased by approximately 60%. According to the World Health Organization (WHO), the cost of health services in the ASEAN region is estimated to be approximately 17,500 baht per person per year. The health service industry of ASEAN countries will invest heavily in research and innovation, leading to good future prosperity. In addition, the increasing demand for health services is mainly due to the growth in income of middle-class households and those with better education, as well as greater health awareness. For the competitive advantage of healthcare services in the ASEAN region, the healthcare business in Thailand is recognized as a world leader in healthcare services. “Medical Tourism in Thailand” has a total market value of more than 2 billion US dollars or 40% of medical tourists who use services in ASEAN (data from The UK Trade and Investment, 2015). The medical tourism market in Malaysia, Singapore and Thailand is expected to grow from 2.64 billion dollars in 2014 to 4.48 billion dollars in 2019. Other positive factors that support the hospital industry to grow well are the growth of the aging population, especially in Thailand, which the government has given importance to by pushing the Ministry of Public Health to be the main agency in driving the strategy for development to become an international health center (Medical Hub policy). This has encouraged many companies to compete in the healthcare service business and accelerate their growth with the aim of raising funds to enter the stock market. Research has found that the main source of funds for companies interested in investing in these healthcare industries is It is an Initial Public Offering (IPO). According to the latest research published internationally, Inquiry: The Journal of Health Care Organization, Provision, and Financing, the long-term return on IPO stocks of the health service group (Health Care and Biopharmaceutical IPOs) on various stock exchanges in the ASEAN region, a total of 76 companies listed on the stock exchange between 1986 and 2014, found that IPO stocks in the health service group had higher returns than the average market return. However, when dividing the sample groups by the time they will be listed on the stock exchange, it was found that Thailand and Malaysia gave the best long-term returns in ASEAN, while Singapore and Indonesia gave losses. The returns were calculated from the closing price of the first trading day and the share price held for 3 years from the first trading day on the secondary market. Dr. Kulbutr further revealed that IPO stocks in the hospital group that are medium and small in size will have better returns than large hospitals. Studying the return on investment in IPO stocks in the hospital group in the ASEAN region helps general investors adjust their investment strategies for opportunities to create better returns, such as buying and holding stocks in the health service group for the long term.
