Construction stocks rise in anticipation of infrastructure projects revived under junta
June 14, 2014 00:00 By The Nation
Blue-chip stocks related to construction have experienced a robust gain in trading over the past few weeks in response to the ruling junta's moves on economic reform, including the Bt3-trillion infrastructure project.
According to Stock Exchange of Thailand data, Italian-Thai Development has rallied by 34 per cent over the past two weeks. ITD shares closed yesterday at Bt5.05, up 1.81 per cent from Thursday.
An analyst at Finansia Syrus Securities said the ITD rally followed reports on the country’s economic reform plan and investment road map. Prominent projects like railway double-tracking and mass-transit extensions were included.
The analyst said although it was unclear whether the Bt350-billion water-management project approved by the elected government ousted by the military would go ahead, ITD stock had been affected by heavy speculative trading.
ITD is one of the construction firms that won projects under the water project.
However, some stocks such as PTT and Thai Airways International, which are state enterprises, might be at risk, affected by the plans to reform the energy price structure and overhaul government-owned enterprises.
The Transport Ministry has drawn up the outline of a Bt3-trillion eight-year (2015-22) investment plan for infrastructure projects. Most are in line with the ministry’s previous plan that focused on transport and logistics, such as double-track railways, mass-transit trains and improvements of highways and ports.
The ministry will forward this strategy to the deputy chief of the ruling National Council for Peace and Order, Air Chief Marshal Prajin Juntong, who is in charge of economic affairs, next Thursday.
This strategy consists of five pillars.
First is the railways, including the inter-city lines, with five routes getting double tracking worth Bt116 billion. The five routes are Lop Buri-Paknampo, 148 kilometres worth Bt24 billion; Map Kabao-Nakhon Ratchasima, 132km, Bt29 billion; Jira Road-Khon Kaen, 185km, Bt26 billion; Nakhon Pathom-Hua Hin, 165km, Bt20 billion; and Prachuap Khiri Khan-Chumphon, 167km, Bt17 billion.
The railway development strategy also includes the double-tracking of six more routes with total length of 1,364km worth Bt140 billion. They are Hua Hin-Prachuap Khiri Khan, 90km in length; Chumphon-Surat Thani, 167km; Surat Thani-Padang Besar, 339km; Paknampo-Den Chai, 285km, Khon Kaen-Nong Khai, 174km; and Jira Road-Ubon Ratchathani, 309km.
It also embraces three new double-track routes with total length of 696km worth Bt120 billion, which are Den Chai-Chiang Rai-Chiang Kong, 326km; Ban Pai-Maha Sarakham-Roi Et-Mukdahan-Nakhon Phanom, 347km; and Ban Pachi-Nakhon Luang, 15km.
The second pillar involves the public-transport system in Greater Bangkok (10 routes), while the third pillar is intra-regional and inter-provincial roads.
The fourth pillar is waterway projects such as deep-sea ports.
The fifth one is aviation projects such as development of the second phase of the Suvarnabhumi Airport and the procurement of aircraft by Thai Airways International. The development of this pillar is divided into three phases. The first phase, which will begin next year and cover both feasibility studies and the start of construction, is worth Bt210 billion.
The second phase in 2016-17 and will mostly cover newly developed projects worth Bt170 billion, while some will be projects carried on from the first phase.
The third phase will begin in 2018.
Separately, NCPO chief General Prayuth Chan-ocha said after a meeting with 36 relevant agencies on Thursday that he had instructed them to reprioritise the previous government’s Bt350-billion water management projects to be in accordance with the 11th National Economic and Social Development Plan.
The projects should be in line with His Majesty the King’s idea of water management, he told them.