With the Chao Phya basin suffering one of its worst floods ever, brokerage houses are predicting the severe inundation will cut the profits of listed agricultural companies, retailers and small finance companies on the stock exchange.

CLSA Thailand said in a research report that while it was still too early to assess the impact, companies in these three sectors would be hurt by the flooding, the worst in Thailand since 1995.

The Thai government has yet to come up with official figures for the flooding, but a preliminary assessment suggests the damage could top Bt200 million. CLSA said the agricultural sector would be the worst hit and that this was the one sector where investors might wish to consider selling. For instance, CP Foods and Thai Union Frozen are exposed to risks caused by floods, because they either grow or rely on agricultural products.

Banks and finance companies with upcountry exposure are likely to see higher defaults, prompting a rise in loan-loss provisions and lower spending patterns. Of the banks, Krung Thai has the most exposure, at 5 per cent of loans, and among finance companies, Aeonts and Singer will be affected.

The bulk of the flooding so far has been in the central and northern regions, which are Thailand's prime agricultural zones. The report said crop output would be damaged, because the waters rose before the November harvest.

Thailand remains vulnerable in terms of its the agricultural sector, because it accounts for 39 per cent of employment, 10 per cent of gross domestic product (GDP) and 7 per cent of exports.

The research house said about 20 per cent of CP Foods' revenues came from shrimp, and the harvest might be washed away. However, the flood may increase demand for CP's chicken products, because the flooding is likely to hit small chicken farms. CLSA also noted that retail stores with upcountry exposure might see slower same-store-sales growth, in particular Big C, with 60 per cent of sales from upcountry.

The research house said it was tempting to assume contractors would benefit from reconstruction, but projects were likely to be too small. Large construction companies on the stock exchange tend to focus more on large projects.

CLSA said small finance companies might see higher provisions. More than half the clients at Aeonts Thana Sinsap, which provides personal loans, credit cards and hire-purchase, are from upcountry. Singer, which sells electrical appliances door to door, depends almost entirely on upcountry sales.

UBS Investment Research said that although floods hit crops, the overall effect would be small. Agricultural GDP of Bt706 billion for last year is much higher than the preliminary damage estimate of more than Bt200 million. Moreover, the impact on GDP of a drop in crop output is complicated by price adjustments that would offset the drop.

Upcountry business activities have already felt the pinch from the flood. On Monday, some commercial banks in Ayutthaya's Sena district, including Krung Thai Bank and Siam City Bank, had to close branches, because the water threatened their offices.

Niphat Pimmol, manager of Krung Thai Bank's Sena branch, said that so far, the flooding had cost the bank about 10 per cent of trade from walk-in customers. There are 400 customers on a normal day.

Government Savings Bank director-general Goanpot Asvinvichit said the flooding had affected orchards along the Chao Phya River, especially durian and lemon plantations. He added that his bank had introduced measures to help affected farmers; for instance, by offering a grace period for loan repayments.

Somchai Tadsang, a local administrator in Nonthaburi's Pak Kret district, said more than 80 per cent of the plantation area on Koh Kret, an island in the river, were damaged by the floods.

He said tourism on Koh Kret was also affected, but he hoped it would be temporary.

Royal Irrigation Department director-general Samart Chokanapitak said the river level in Bangkok was now at 2.02 metres and would not cause flooding in the capital. However, he said he was concerned that the water flow in Nakhon Sawan had increased to 5,145 cubic metres per second, surpassing the highest measured speed and volume of 4,800 cubic metres during the 1995 flood.