Shares in Krung Thai Bank Pcl, Thailand’s second-largest lender, gained as much as 4.3 percent to the highest in two months after it reported a better-than-expected quarterly result, prompting upgrades of earnings forecasts and stock price target.
Krung Thai Bank shares were up 2.7 percent at 19 baht, climbing at one point to 19.3 baht, the highest since Aug. 18. It has risen 35.5 percent so far this year versus a 33.7 percent gain of the banking subindex.
Broker KGI Securities raised its forecast for Krung Thai Bank’s 2012-2013 earnings by 8-10 percent and upgraded the stock’s price target to 21.5 baht from 20 baht. It maintained a ‘neutral’ rating, saying it was cautious on the bank’s loan growth outlook.
“While KTB’s operations continue to improve quarter on quarter this year, its loan growth still lags its peers, as well as the market’s expectation, and depends much on the government drawdown,” the broker said in a report.
Seventeen out of 27 analysts tracking the company rated the stock a ‘buy’ or ‘strong buy’, seven had a ‘hold’ and three had a ‘sell’ or ‘strong sell’, according to Thomson Reuters Starmine.
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(Reporting by Viparat Jantraprap in Bangkok; firstname.lastname@example.org); Editing by Jijo Jacob
10:42 STOCKS NEWS THAILAND-CLSA raises benchmark index 12-month target to 1,500
CLSA raised its 12-month target on Thailand’s benchmark SET index .SETI to 1,500 from 1,350, citing strong domestic outlook and the Bank of Thailand’s 25 basis point policy rate reduction on Wednesday among positive catalysts.
Large government infrastructure spending, starting in the first half of 2013, and rising urban consumption could underpin earnings growth and justify current multiples, CLSA said in a market strategy report “The Wonder Years” dated Oct. 17.
The SET index was up 0.1 percent at 1,312.53. It has risen almost 28 percent so far in 2012, the best performing major market in Asia and among the world’s top performers.
“Against backdrop of PM Yingluck and Thaksinomics II serving out their full terms into 2015, we are positive on SET prospects, and set our 12-month index target at 1500 (previous 1350) as we rollover towards FY14 looking earnings,” the report said.
The broker assumed that SET P/E remains at 12.3 times now, against average earnings per share growth of 15 percent per annum over 2013-14, with a market price to book of 2.2 times.
Going into 2013, urbanization and consumption themes continued to offer the highest growth, with financials and consumer related stocks remaining the best way to play domestic growth.
CLSA’s top large cap picks included Siam Commercial Bank SCB.BK, CP All CPALL.BK, Advanced Info Service ADVA.BK, and Krung Thai Bank KTB.BK.
“The road towards our 1500 SET Index may be a gradual grind in 2013, unless the Bank of Thailand (BOT) comes out to play more often,” it said.
Reporting by Viparat Jantraprap in Bangkok; Editing by Sunil Nair; email@example.com