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Chaiyaporn Nompitakcharoen,

Head of Research, Bualuang Securities

Market should remain in chubby moves as investors are waiting for a result of stimulus package usage. Economic data continues to present a worsen picture with hope to see recovery taking place in second half this year. I expect a good timing for reload stocks is 3Q09 given economic stability or on the way of recovery.

How about next week? I view market may climb up further to level of 435-440 due to investors covering stocks prior to short sales restriction in major equity markets announcement, and hope that G20 may bring about financial meltdown and economic solution on this round of meeting. Stock picks: CP All Plc (CPALL), BEC World Plc (BEC), and Major Cinrplex Group Plc (MAJOR).

Tisco Securities

Aggregate net profit of listed Thai companies fell by 223 per cent yearonyear in 4Q08 and by 26 per cent yearonyear for the full year.

Of the 479 companies to report so far, only a third announced yearonyear profit growth in the fourth quarter last year.

 

For companies under TISCO's coverage, 26 per cent posted higher than expected earnings while 47 per cent came in below our estimates.

Total earnings booked in the period fell short of our forecast by a considerable margin due to inventory and FX losses and yearend expenditure adjustments.

Commodityrelated companies were among those to report the biggest year-on-year earnings declines, with many of them posting huge losses in 4Q08. Sales for nonfinancial companies under our coverage fell by 19 per cent year-on-year in the fourth quarter of 2008 due largely to lower commodity prices and decreased sales volume (partly caused by maintenance shutdowns). Inventory losses were booked as part of production costs, causing GPM to plunge sharply quarter-on-quarter.

Aggregate gross margins also declined yearonyear due to higher operating costs and inventory losses at oil refiners.

We estimate recurring EPS growth this year at 7 per cent year-on-year, with net EPS growth of 17.2 per cent yearonyear. Cuts in 2009 earnings targets that were made since mid2008 amount to roughly 30 per cent to date and we expect further downward revisions though to a lesser degree.

However, recurring EPS growth for 2009 may fall closer to zero in case of more earnings downgrades.

In the current dire economic conditions, earnings visibility of companies has become even more critical. Our top sector picks for this year remain commerce (sustainable margins, positive samestoresales, network expansion), utilities (stable cash flow), telecom (stable cash flow, progress in 3G), and food (resilient demand).

Vajiralux Sanglerdsillapachai,

Executive Director, Trinity Securities

Last Friday, stock market has rebounded strongly with returning of trading volume of above Bt10bn, following global market trend. Energy sector was the leader as oil price rebounded to stand above US$45/bbl. However, we still believe that this would be only technical rebound after the sharp falling in prior week. We still believe market would remain volatile and does not expect market to continue gaining momentum in this week.

We see this market rebound as a good opportunity to short against portfolio, especially for energy stock. OPEC will announce whether it will cut production in this 15 th March, which would be the key point for speculation in oil price. However, we believe that oil price could not rise as much. We believe that at US$50/bbl would be the resistant for oil price as global demand still stagnant. We recommend short PTTEP, and PTT.

For banking sector, we recommend switching from Siam Commercial Bank (SCB) and Bangkok Bnak (BBL) to Kasikornbank (KBANK). KBANK has underperformed over the past few weeks, and we believe that current share price has mostly reflected negative issues on its SME exposure.

Our top pick of medium to long term remains Thai Oil Plc (TOP) and Advanced Info Service Plc (ADVANC).