DIVERGENT views are emerging among investment experts on the projected combined earnings performance of listed companies for the second quarter of this year.
Providing a dose of optimism, some analysts are projecting an expansion in credit that should boost the profits of banks in the second half of the year.
Apichat Poobunjirdkul, director of Tisco Securities, forecasts the net earnings of listed companies to reach Bt250 billion for the second quarter of this year and Bt960 billion for the whole year. The year-on-year decline of 12 per cent reflects the effect of last year’s government stimulus measures for the property market and for other sectors.
Apichat said the economy is expected to make a stronger recovery in the second half than that seen in the first six months, and this would be felt in increased purchasing power amid healthier domestic consumption.
Domestic consumption, retail and banking groups are expected to gain from the economic recovery, while construction groups would benefit from government-led projects, he said. The Stock Exchange of Thailand Index would likely reach 1,650 points by the end of the year, he added.
Warut Sivasariyonon, managing director for research at Asia Wealth Securities, said the first-half profits would likely reflect a favourable direction. His estimate for second-quarter earnings is Bt256 billion.
Warut is among those looking ahead to a stronger performance from the banks amid credit expansion. Construction and petrochemical groups are likely to see increased earnings and continue their recovery in the second half, he said.
Small and medium-sized firms are expected to see an improvement from the first half, especially those with an export focus, he said.
Poranee Thongyen, executive vice president of Asia Plus Securities, forecasts a combined second-quarter profit of Bt248 billion, down from the first quarter's Bt285 billion, due largely to falls in crude oil prices that could boost crude inventories.
Poranee saw no evidence for any extraordinary profits in the second quarter.
She expects banks to show improved earnings in the third quarter, on rises in net interest-based income, steady net interest margin and rising fee-based income.
The property sector is expected to improve from the second quarter onwards, supported by a proactive strategy for new projects, she said.
Prakit Sirivattanaket, vice president of Kasikorn Securities, predicted a drop in net profits for the second quarter, both year on year and quarter on quarter, due to the slowdown in consumption in the second quarter and the falls in crude prices.
As for the slowdown in domestic consumption, he does not see prospects for growth in the third quarter with non-farm income remaining low. This would keep the pressure on purchasing power and affect stocks related to domestic consumption.
In the second half of this year, crude prices could drop further and the baht may depreciate, which could lead to energy and petrochemical stocks suffering losses on oil inventories and on foreign exchange, he said.
Nuttachart Mekmasin, vice president at Trinity Securities, has pencilled in an unsatisfactory second quarter, especially for energy companies hit by lower crude prices and banks are likely to post a worse-than-expected performance.
As a result, an estimate for listed companies' earnings has been revised down to Bt101.75 per share from an earlier forecast of Bt102.5 to reflect the weak earnings he said.
For the rest of this year, Nuttachart expressed concerns over corporate profits as no signs have emerged for a recovery in domestic purchasing power. One hope is that the government's investment spending will boost company profits, he said.