20000214

Company's year-end results to drive Thai stocks

BANGKOK: Foreign investors' moves and year-end results for 1999 from non-financial firms will drive Thai stocks this week, analysts said.

"The outcome of the Thai corporate results is likely to be a major factor driving the Thai stock market during the week," said Supavudh Saicheau, head of economics and strategy at Merrill Lynch Phatra Securities.

Analysts believe firms are set to post encouraging results on the back of a jump in consumer demand seen in the fourth quarter of 1999, as the Thai economy improved.

On Friday the composite SET index finished up 3.02 points or 0.67 percent at 456.12 in active turnover of 10.6 billion baht. It was down 3.02 percent on the week.

Average daily turnover volumes for the week rose nearly 46 percent to 7.22 billion baht, up from 4.97 billion for the week to February 4.

The market will also watch foreign investors, who have been net sellers despite Thailand's improving macroeconomic outlook.

"Foreign investors were selling financial stocks after some debt restructuring deals were seen becoming sour," said Mark Reinecke, a dealer at Asset Plus Securities.

He said these negative signals had prompted some foreign investors to gradually withdraw from the Thai market.

Foreign investors sold nearly three billion baht ($80 million) of stocks last week. Their total February net sales added up to more than four billion baht, and about 8.63 billion baht since January 4. Foreign investors sold a net of 3.13 billion baht of Thai shares in all of 1999.

The first major results announcement is expected from Thai conglomerate, Siam Cement, late on Monday.

Market expectations are that the operating results could boost sentiment although firms' bottom lines could be hurt by foreign exchange losses.

Analysts believe Thai petrochemical firms are set to report improved 1999 earnings results thanks to rising world oil prices.

Telecoms firms are expected to show an improvement in 1999 financial results and to see bright prospects for 2000 on the back of economic recovery and a global Internet boom.

Property developers, long battered by financial crisis and oversupply, are likely to report more bad results for 1999, but their losses should be lower than in 1998.

Analysts say higher sales volumes helped by low prices and more attractive mortgage rates have boosted turnover and, in some cases, operating income in the property sector.

Media firms are likely to report improved earnings supported by a rebounding economy and growing consumer confidence, which has boosted corporate advertising spending.

Advertising income looks set to rise again this year and next, making the companies appear even more attractive.

Electronics firms are set to report a much better set of financial results for 1999 and look likely to improve performance even further in 2000.

Analysts said demand for Internet infrastructure and cellular phone growth would be major catalysts driving demand for electronic products this year.

Thai Petrochemical Industry Plc, Thailand's top debt defaulter, accounting for six percent of total non-performing loans locally, last week said it had filed a petition to protest a debt restructuring deal signed on January 17.-Reuters