Offshore returns prop SET decline

Listed companies bolstering net profit

With the country’s uneven economic pickup, overseas investments by large listed companies are contributing to net profit growth and providing a buffer against earnings declines, says a senior official of the Stock Exchange of Thailand (SET).

More than 200 listed companies have invested abroad, with offshore investment accounting for 47% of 107 firms’ total revenue, said SET senior vice-president Pakorn Peetathawatchai.

“It’s interesting that Thai-listed firms with overseas investments can maintain net profit growth better than small and mid-sized companies,” he said.

According to the SET’s data, 572 SETlisted companies, representing 92.4% of the total 619 companies (excluding those in non-compliance and non-performing groups) had an aggregate net profit of 285 billion baht for first three months of 2017, surging 21% year-on-year.

For MAI-listed companies, 133 or 96% of the total 139 firms reported an aggregate net profit of 1.18 billion baht, up 4.1% year-on-year.

Both SET and MAI-listed companies in April raised funds through equity worth a combined 28.19 billion baht, of which 27.19 billion was mobilised from the primary market and the remaining 1 billion from the secondary market.

For the first four months, the total funds raised amounted to 51.85 billion baht.

The Thai stock market remained an attractive destination among foreign investors who bought a net 1.83 billion last month and 8.35 billion from January until May 11.

However, retail investors were cautious, with their trading ratios falling significantly to 49.4% in April from around 53-55% over the same period last year.

The trading values of both the SET and the Market for Alternative Investments (MAI) in April averaged 40.1 billion a year, down 8.2% from the same period last year due to gloomy market sentiment.

However, the daily average turnover increased slightly to 41.5 billion, as of May 11.

The combined market capitalisation of both bourses at the end of April was at 15.8 trillion baht, up 1.9% from the end of 2016.

The SET’s market value rose by 2.6% year-on-year to 15.5 trillion baht at the end of last month, while the MAI’s sank by 24.6% to 321 billion.

At the end of April, the SET’s dividend yield ratio stood at 3.2%, while the MAI’s was at 1.7%.

The average derivatives trading volume was 244,808 contracts per day in April. For the first four months, the average derivatives trading volume increased 2.1% from a year earlier to 291,043 contracts a day, largely driven by the increase in transactions of Single Stock Futures.

The SET will hold a national seminar entitled “Thailand’s Big Strategic Move” on June 22, to which Deputy Prime Minister Somkid Jatusripitak will be invited.