Monday, August 24, 2009

Thailand’s SET Target Raised at Kim Eng on Economy (Update2)

By Anuchit Nguyen and Susan Li

Aug. 25 (Bloomberg) -- Thailand’s SET Index target was raised at Kim Eng Securities (Thailand) Pcl, the nation’s biggest brokerage, on expectations the economic recovery will boost corporate earnings.

Kim Eng raised its year-end target for the SET to 750 from 700, George Huebsch, Kim Eng’s head of research, said in an interview with Bloomberg Television. The measure yesterday climbed 1.3 percent to close at 653.20 and was little changed at 653.15 as of 12:10 p.m. in Bangkok.

“Thailand’s weathered the economic slowdown extremely well,” Huebsch said. “Earnings should improve further over the next several quarters with the economic recovery.”

Thailand’s benchmark SET Index has gained 45 percent this year, set for its best annual performance since 2003 after a 48 percent slump last year. Southeast Asia’s second-biggest economy may grow as much as 3 percent next year, rebounding from a contraction this year, the government said yesterday.

The country’s economic recession eased last quarter on government spending and improving export orders. Gross domestic product fell 4.9 percent in the second quarter from a year earlier, after contracting 7.1 percent in the previous three months, the government said yesterday.

Huebsch recommended shares of Kasikornbank Pcl, the country’s third-biggest lender, and developer Supalai Pcl as a rebound in consumer spending will boost demand for loans and residential properties. He also favors Tipco Asphalt Pcl and Siam Cement Pcl because the government’s increased spending will raise sales of building material products.

Domestic Consumption

“Banks and properties will improve on domestic consumption,” he said. “Makers of building materials will benefit from the government’s stimulus package.”

Tipco Asphalt, the nation’s largest maker of asphalt paving material, jumped4.5 percent to 18.5 baht, set for its highest close since June 16, 2008. Siam Cement added 0.3 percent to 193 baht. Supalai rose 0.4 percent to 4.74 baht. Kasikornbank fell 0.3 percent to 74 baht.

Prime Minister Abhisit Vejjajiva’s government last week approved a 1.06 trillion-baht ($31.1 billion), three-year investment budget to help lift the economy out of its recession. The plan is in addition to a 116.7 billion baht stimulus package implemented in the first half.

Consumer confidence rose for a second straight month in July after the government pledged to boost spending to revive growth and a slump in exports eased. Thailand’s export decline eased in July and industrial production in June fell the least since November.

Kim Eng has a 10.4 percent share of total trading turnover on the Stock Exchange of Thailand so far this year, the most among 38 licensed brokerages, according to the bourse’s data.

To contact the reporter on this story: Anuchit Nguyen in Bangkok atanguyen@bloomberg.net

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