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MCOT will be negatively affected by the sacking of its president Wasant Paileeklee at least in the short term, as his departure will disrupt business continuity when the company is bracing for tougher times ahead, brokerage houses said yesterday.

Investors reacted negatively to the news of Wasant's departure next month. MCOT's share price yesterday dropped Bt0.50, or 4 per cent, to end the day at Bt12.

The company's labour union sought a meeting with the board of directors, chaired by Charupong Ruangsuwanon, on Monday, citing that the reason given for the early termination of Wasant's contract was illogical.

The board announced on Thursday that the contract termination was not because of Wasant's performance but a matter of his incompatible management style.

His contract, which started in May last year, was originally scheduled to end in May 2011.

Wasant responded calmly yesterday to the board's decision.

"I accept the board's offer for me to quit the position of president, as it is the only way to enable MCOT to continue its business, because I will not get further support from the board," he told reporters.

"I have served MCOT with honesty and dedication and in the next 30 days I will concentrate on making a smooth transition to avoid negative impact on the organisation."

However, the labour union attacked the board's decision. The board lacks tangible evidence to sack Wasant, and this will negatively affect MCOT's image and business, said union president Orawan Choudee.

Orawan is concerned over the transition, which will disrupt business and cast uncertainty over MCOT's future. She also said the decision could affect the organisation's neutrality in news-reporting.

Seamico Securities said news of the early termination of Wasant's four-year contract on December 14 was unexpected. Despite rumours since the first quarter that his status was in jeopardy, it had thought his good performance would protect him.

"The removal of the CEO will make investors more concerned amid the gloomy ad-spending outlook for 2009. This will also hammer the stock's outlook, as the risk of management change has increased, the issue having emerged twice over the past three years," the brokerage said.

KGI Securities echoed these views.

"In our view, uncertainty on MCOT has emerged again as it remains unclear who will replace Wasant and what the company's direction will be under a new president. Coupled with the regulatory risk over concession fees and the sub-par ad industry, the stock performance is unlikely to outperform the market in the near term," the brokerage said.

In the short term, uncertainty will be the key concern capping share-price performance, it added.

Siam City Research Institute was the most positive about MCOT's prospects, saying that the impact of Wasant's departure would be minimal compared with Mingkwan Sangsuwan's departure from the top post two years ago. Mingkwan was sacked in 2006 following political change.

The brokerage added that Wasant was not as involved in business expansion as Mingkwan.

All securities foresee hard times ahead for the company.

ACL forecasts MCOT's 2008 net profit at Bt1.24 billion, an increase of 12 per cent. While Seamico predicts 10-per-cent growth this year, it expects 2009 growth to be only 3 per cent due to concern that the slowing economy may pressure airtime utilisation.

In the third quarter, MCOT made a net profit of Bt285 million, down 5 per cent year on year, due to 5-per-cent and 3-per-cent annualised falls in TV and radio advertising revenue respectively.