STOCKS NEWS THAILAND-Bank of Ayudhya gains on earnings hopes - Reuters STOCKS NEWS THAILAND-Bank of Ayudhya gains on earnings hopes - Reuters

Monday, May 28, 2012

STOCKS NEWS THAILAND-Bank of Ayudhya gains on earnings hopes - Reuters

STOCKS NEWS THAILAND-Bank of Ayudhya gains on earnings hopes - Reuters

Mon May 28, 2012 4:32am EDT

Shares in Bank of Ayudhya rose 2.7 percent to 28.25 baht on expectations of better second-quarter earnings, its highest since May 17. It outperformed the broader banking index , which fell as much as 0.4 percent.

"Bank of Ayudhya should deliver good second-quarter earnings, supported by strong lending growth, a sustained net interest margin, well-managed operating expenses and lower loan loss provisions," Bualuang Securities said in a research note.

The broker maintained its "buy" rating on the stock with a target price at 30.5 baht, on expectations of better earnings after the bank's recent non-performing loan (NPL) sales are set to improve its asset quality.

Bank of Ayudhya sold 2.4 billion baht ($75.8 million) worth of NPLs to Alpha Capital Asset Management Co last week. As bad retail loans comprised 80 percent of the NPLs, the sale of bad debts will reduce the bank's NPLs by 8.6 percent to 25.7 billion baht, Bualuang said.

At 0813 GMT, Bank of Ayudhya was up 1.82 percent at 28 baht.

1514 (0814 GMT)

(Reporting by Sinsiri Tiwutanond in Bangkok;


13:12 STOCKS NEWS THAILAND-Khonburi Sugar gains, despite concern over shortage

Sugar miller Khonburi Sugar Pcl gained 1.04 percent to 9.7 baht, while brokers said concern over a supply shortage may drag down the company's profit for 2012.

Maybank Kim Eng Securities rated the shares a "speculative buy" with a target price of 12.3 baht, while expecting Khonburi Sugar's 2012 profit to drop by 767 million Thai baht ($24.22 million) from the previous year due to a 12 percent fall in sugarcane supply.

"It is expected that global sugar production for the year 2012 to 2013 will rise, especially from Asia and Europe ... this would put pressure on Khonburi Sugar's export prices in 2013," Maybank said in a research note.

However, sugar exports could peak in the second and third quarters, helping the company post stronger profits in the following quarters, the broker said.

In addition, its lower valuation compared to its peer Khon Kaen Sugar Pcl still renders the shares attractive, despite profit risks in 2013, it added.

At 0558 GMT, rival Khon Kaen Sugar shares remained flat at 12.4 baht.

1258 (0558 GMT)

(Reporting by Sinsiri Tiwutanond in Bangkok;


11:31 STOCKS NEWS THAILAND: Raimon Land hits 12-day high

Shares in real-estate developer Raimon Land Pcl rose as much as 3.3 percent to a 12-day high of 1.57 baht, after several brokers rated the stock a 'buy' on expectations The River - its high-end condominium project in Bangkok - would boost profit growth in the second half of 2012.

Despite company executives on Friday saying Raimon planned to postpone the transfer of The River's property to its clients to mid-June, brokers said the 1-billion-baht ($31.58 million) asset transfer would prop up second-quarter earnings, after a loss of 70 million baht in the first quarter.

"Second quarter's earnings are expected to see a 1-billion-baht increase driven by the asset transfer of The River in mid-June, which well help see a recovery in profit of around 100 million baht," Trinity Securities said in a research note.

"The third and fourth quarters are expected to see outstanding performances from the transfer as well, with an estimated 3 billion baht per quarter, totalling around 500 to 600 million baht in profit each," it added.

The broker also forecast a net profit of 1.18 billion baht in 2012, driven by sales of the condominium. Trinity rated the shares a 'buy', with a target price of 2 baht.

The stock later eased to up 0.6 percent at 1.53 baht, while the main Thai index was down 0.5 percent.

1118 (0418 GMT)

($1 = 31.7 baht)

STOCKS NEWS EUROPE-Spanish banks' recap need may surge - Nomura - Reuters UK

Mon May 28, 2012 8:03am BST

Nomura estimates that the main listed domestic Spanish banks could require an additional 16 billion euros ($20.02 billion) and believes the government could also need to clean-up and recapitalise the nationalised banks of Banco de Valencia, Novacaixagalicia and Catalunyacaixa.

"Including other unlisted banks, the recapitalisation needs could amount to between EUR 50 to EUR 60 billion. Given the current economic & political uncertainties facing the eurozone, this could see additional pressure on Spain to consider using external funds for the bank recapitalisation."

Nomura expects that only BBVA, Santander and Sabadell would avoid needing to strengthen capital.

"We remain negative in our outlook for Spanish banks given the potential dilution, the uncertainties around the final amount of capital needed and how this will be funded."

"Bankia will require a EUR 12 billion recapitalisation, which we think will see the government (through BFA [Bankia's parent company]) take a c. 91 percent stake in the company. Based on this recapitalisation and the updated numbers on Bankia, we lower our price target to EUR 0.2 per share," it says, maintaining its "reduce" rating on the stocks.

Spain's fourth biggest lender, Bankia, on Saturday prepared to sell stakes it holds in companies to meet European competition rules after a state rescue that has so far cost 23.5 billion euros ($29.40 billion).

($1 = 0.7992 euros)

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