STOCKS NEWS THAILAND-BTS Group falls after hitting record high

Sun Nov 11, 2012 11:15pm EST

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BTS Group Holdings Pcl, Bangkok's Skytrain operator, dropped 2.29 percent to 6.40 baht, after surging more than 2 percent to a record high of 6.75 baht earlier in the session, as the market was uncertain about the prospects of its infrastructure fund.

The company announced on Friday that it planned to set up an infrastructure fund of at least 50 billion baht ($1.63 billion) as it needed funding for expanding mass transit lines.

Broker KGI Securities said it expected BTS to incur a slight deficit in earnings in the short term after the fund was set up, since the company would be contributing at least 5 billion baht ($163.19 million) to 6 billion baht ($195.82 million) per year from its fares revenue to the fund.

However, the company is expected to gain up to 500 million baht ($16.32 million) to 700 million baht ($22.85 million) in dividend per year in return.

"The infrastructure fund will only have a positive impact for the company once it had made the investment in the four mass transit routes and is able to be rewarded at a higher rate than what they'll need to allocate for debt repayment," KGI said in a research note.

The broker maintained its "buy" rating on the company with a target price of 7.20 baht.

At 0407 GMT, shares in BTS were down 0.76 percent at 6.50 baht, while the broader Thai index was up 0.13 percent.

For the company statement, click

(Reporting by Sinsiri Tiwutanond in Bangkok; Editing by Subhranshu Sahu; sinsiri.tiwutanond@thomsonreuters.com) ($1 = 30.64 Baht)

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