The brokerage reported in a filing with the Stock Exchange of Thailand yesterday that its net profit in its third quarter ending May 31 had dropped from Bt30.51 million to Bt25.3 million. Its net profit tumbled 44 per cent quarter on quarter.

CNS stock yesterday closed unchanged at Bt37.50.Normally, CNS's earnings

are used as an indicator of the securities industry's profits as the brokerage releases its

figures ahead of others. Cumulative stock trading volume during March to May

fell from Bt1.3 trillion in the previous quarter to Bt953.04 billion.

For its first nine months, CNS posted a net profit of Bt93.66 billion - down 40.63 per cent from Bt157.76 billion a year earlier.

The company explained that brokerage fees in the nine-month period had declined by Bt106.64 million due to sluggish trading volume and a shrunken market share following intensified competition.

The Bt40.65-million decline in CNS's stock investment business was also blamed for the disappointing net profit.

However, its other income, which rose Bt35.19 million, partly offset declining revenues.

SCB Securities said in a note that CNS's quarterly net profit was nonetheless 49 per cent higher than the brokerage's earlier forecast of Bt17 million.

This could mainly be attributed to higher-than-expected interest and dividend income.

However, SCB Securities has maintained its "sell" rating, pointing to the fact that CNS's stock is the most expensive among its industry peers while it has the lowest profitability.

SCB Securities stated that CNS's brokerage fees in its third quarter had amounted to Bt123 million, down from Bt169 million in the previous quarter.

However, quarterly fees and service income as well as interest and dividend income rose to Bt13 million and Bt49 million, respectively.