STOCKS NEWS THAILAND-Maybank Kim Eng keeps 'overweight' on banking sector

Wed Nov 21, 2012 3:37am EST

Maybank Kim Eng Securities kept its 'overweight' rating on the banking sector, saying high demand for loans would boost the sector's loan growth, while fourth-quarter earnings would remain soft from lower interest rates.

"Loans have continued to expand strongly in October. We expect accelerating momentum for the rest of the year would beat our 14.5 percent projection for loan growth in the full year," Maybank said.

The broker highlighted auto and SME loans as key drivers for growth in October, while corporate loan demand remained sluggish due to the weak global economy and slowing exports.

"Even with strong loan growth, we expect the fourth-quarter earnings to contract with the seasonally rising operating expense, slightly squeezed net interest margin from lower interest rates, and the expected extra provisioning for Krung Thai Bank," the broker added.

Despite an expected softer fourth-quarter earnings, Maybank said the full year 2012 earnings should remain solid with 30 percent growth.

Maybank rated Krung Thai Bank as its top pick in the sector on "expected acceleration of government loan demand and the undeserved discount valuation".

As of 0811 GMT, Krung Thai Bank shares rose 0.56 percent to 1.79 baht, while the broader banking index gained 0.15 percent.

The main Thai index fell 0.1 percent.

(Reporting by Sinsiri Tiwutanond in Bangkok; Editing by G.Ram Mohan; sinsiri.tiwutanond@thomsonreuters.com)

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12:09 STOCKS NEWS THAILAND-Central Plaza Hotel hits record high

Central Plaza Hotel Pcl surged 4.29 percent to a record high of 24.30 baht, as a brokerage said it expects robust fourth-quarter earnings supported by the peak tourism season.

Broker Trinity Securities rated the shares 'buy' with target price at 25 baht, saying the high season in the fourth-quarter should continue to boost the company's growth on top of strong profit from the previous quarter.

"Fourth-quarter is considered high season for the tourism business, as well as entering new year's season, thus it is expected that hotel and food businesses will dramatically benefit from this," Trinity said in a note.

The broker said it expects the company's net profit for 2012 to rise 86 percent to 1.02 billion baht year-on-year. It said the company would benefit from increased purchasing power, expansion plans, expected earnings growth and improved financial outlook.

"Should see improved financial outlook, as the company had only set aside 1 to 1.4 billion baht to be invested in expansion annually....the interest-bearing debt to equity ratio is expected to decline every year since the company has no immediate plans to invest in major projects," the broker said.

At 0446 GMT, shares in Central Plaza Hotel were up 3.43 percent at 24.10 baht.

For the company statement, click

(Reporting by Sinsiri Tiwutanond in Bangkok; Editing by Jijo Jacob; sinsiri.tiwutanond@thomsonreuters.com)

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11:16 STOCKS NEWS THAILAND-Thanachart rates TMB as bank top pick

Thanachart Securities rated TMB Bank its top pick for the banking sector, while maintaining a 'buy' rating with target price at 2.20 baht, saying ING's decision to sell its Thai unit is unlikely to have a negative impact on TMB profit.

ING Groep NV currently holds a 31 percent stake in Thailand's TMB.

The Dutch financial group agreed to sell its Thailand asset management unit, ING Funds, to Singapore's United Overseas Bank Ltd for 10 million euros ($12.8 million) in cash, as the company pushed ahead with its Asian divestments.

"TMB is the main distribution channel for ING's financial products. The revenue from asset management business accounts for 5 percent of its income, in which 3.5 percent comes from TMB Asset Management, while the other 1.5 percent comes from ING Funds," Thanachart explained in a note.

"Since TMB will continue to sell financial products for ING after the deal, we do not expect much adverse effects on TMB's revenue and profit".

At 0404 GMT, shares of TMB gained 0.56 percent to 1.79 baht, while the banking subindex lost 0.53 percent.

For the company statement, click

(Reporting by Sinsiri Tiwutanond in Bangkok; Editing by G.Ram Mohan; sinsiri.tiwutanond@thomsonreuters.com)

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