When debentures reach the date on which their principal is due and payable, companies must issue new ones in their place. This process is called a rollover or refinance, explains Kavee Chukitkasem, head of research and content at Pi Securities Ltd. on Friday.

Several factors may hinder the rollover of debentures, especially those of small and medium-sized companies with limited funds, he said.

One factor is the slumping global economy shaped by skyrocketing interest rates and geopolitical conflicts.

“Furthermore, if the government were to push the digital wallet scheme next year by issuing government bonds, some 560 billion baht of funds will be pulled from the capital market,” he said.

This would make it difficult for small and medium-sized companies to secure funds for debenture rollover, putting them at risk of bankruptcy, he warned.

The economic stimulus scheme, whose details have yet to be finalised, could cost 560 billion baht if Pheu Thai Party keeps its election promise of giving 10,000 baht to all Thais aged over 16 to spend at local shops.

Kavee urged investors to avoid shares of small and medium-sized companies that have poor cash flow or accumulated debt, in order to minimise the risk caused by the coming debenture rollover.