STOCKS NEWS THAILAND-Buy banks on dips, long term outlook promising-CIMB

Tue May 14, 2013 4:37am EDT

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CIMB Securities advised investors to use any weakness in banks' share prices, caused by lower interest rates, as an opportunity to build positions in view of the sector's solid operating outlook.

Market expectations of an interest rate cut have increased as the Bank of Thailand has been under pressure to lower rates to curb foreign-capital inflows and the baht's strength, CIMB said in a report.

The monetary policy committee's (MPC) next policy rate review is on May 29.

"Aggressive cuts will affect the net interest margin of wholesale-focused banks but boost those concentrating on hire purchase," it said, adding that Kiatnakin Bank Pcl and Siam Commercial Bank Pcl were its top picks.

Banking shares have underperformed the broader stock market so far in the second quarter amid interest rate uncertainty, with the banking sub-index up 2.6 percent versus a 3.9 percent gain of the main SET index.

1521 (0821 GMT)

(Reporting by Viparat Jantraprap in Bangkok; Editing by Anupama Dwivedi)

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13:10 STOCKS NEWS THAILAND-Banpu up after Q1 earnings beat forecasts .SETI BANP.BK

Shares in Banpu Pcl BANP.BK were up 1.24 percent at 327 baht at midday after the coal miner reported better-than-expected first-quarter earnings.

The company reported a 58 percent fall in quarterly net profit to 925 million baht ($31.16 million), due in part to falling coal prices. The results topped an average forecast of 729 million baht by analysts. (Full Story)

Banpu shares have fallen nearly 21 percent so far this year, underperforming a 1 percent gain of the energy sub-index .SETEN and a 16.7 percent rise of the SET index .SETI.

Eleven out of 23 analysts tracking the company rated the stock 'buy' or 'strong buy', six put a 'hold' and six had a 'sell' or 'strong sell', with a mean price target of 425.46 baht, according to Thomson Reuters StarMine.

Brokers Trinity Securities and Kiatnakin Securities, both had a 'buy' rating and expected a recovery in coal prices and the company's earnings in the second half. Trinity said miners bearing high costs may shut down operations, lowering coal supply.

1257 (0557 GMT)

(Reporting by Viparat Jantraprap in Bangkok; Editing by Anupama Dwivedi)

($1 = 29.69 baht)

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