Fortunately for the bank, the issue is being placed in the hands of global investors at a time when sentiment towards Asia in general and Thailand in particular is improving. Its success reflects the ability of local corporations to re-access the global capital markets, which have been shut to them over the past year. SCB is the first Thai company to have made it to the big league of capital-raising.

Looking at the broader perspective, investors have bought into SCB because they are betting that Thailand will show signs of recovery in the second half of this year after two years of severe recession. Secondly, the main theme of the global equity is the recovery story in Asia -- with the crisis continuing in Latin America, stagnation in Europe and the risks of a US ''bubble'' -- fund managers are obliged to diversify their portfolios by overweighting Asian equities.

Thailand is experiencing the windfall benefits from this shift in sentiment, although there are still tough structural adjustments in both the financial and corporate sectors to be accomplished.

SCB exemplifies the dramatic success story of a bank that has started to turn itself around, although it will need Bt32 billion from the government to cap its Bt65 billion recapitalisation. The deal has been structured to attract institutional investors, who want to buy into a low-cost banking franchise with 458 branches. Investors who purchase a unit of SCB's preferred stocks will be entitled to a unit of warrants, which will be sold back to them over the next three years by the government so that they may benefit from another upside gain. The warrant is estimated to carry a value of between Bt7.50 and Bt9.

With this feature, part of the Aug 14 Banking Restructuring Programme, SCB is an attractive buy. Its stock price has already risen dramatically to close at almost Bt38.25 last week, although the global equity offer fetched Bt26 a share. Already investors are willing to give SCB a hefty premium due to its strong capital base, which will enable it to expand its loan portfolio several years down the road without having to worry about its capital adequacy ratio. By May 10, it will be the first local bank to meet 100 per cent in provisions for loan losses to the end-2000.

A year ago, SCB was in a pathetic state. After Thai Farmers Bank and Bangkok Bank raised about US$1 billion each in March and April 1998, respectively, and cleared a tough hurdle in their capital adequacy requirements, SCB appeared to be a sitting duck. There was no room for a third bank to carry out a global offering. Investors then bet on a recovery and they were wrong.

SCB's stock plummeted to below its Bt10 par value. The company's financial arm, Dhana Siam Finance & Securities Plc, was nationalised, heightening concern about its prospects of remaining solvent in the fierce financial storm that has engulfed Thailand since the baht's devaluation in July 1997.

Then came a rescue by grand design, crafted by Finance Minister Tarrin Nimmanahaeminda, a former president of SCB. The Bt300 billion banking reform package, introduced in August, lifted sentiment and helped assure investors that there would be enough official money to support the weak banks.

SCB immediately settled down to study how it could top the tier-1 capital support offered via the package.

Doubts were initially raised about the efficacy of the rescue programme, which would require an immediate capital write down and a change in management in return for government money.

Bangkok Bank, Thai Farmers Bank, Bank of Ayudhya have all tried their best to avoid tasting the government's apple for fears of government intervention. But SCB, controlled by the Crown Property Bureau, has a more professionally structured management, making it easier to apply for tier-1 capital support.

A change of management was imminent. Dr Olarn Chaipravat, who was disliked by foreign fund managers, resigned from his presidency to pave the way for the rise of Jada Wattanasirithan.

With some other management adjustments, the bank was ready to test the international markets on the backdrop of the country's growing macroeconomic stability and low interest rate environment. The timing was perfect last month when the Jada delegation headed out on a roadshow that took it to Asia, Europe and the US. The issue was six times oversubscribed, and the rest is history.