BANGKOK, June 13 |
BANGKOK, June 13 (Reuters) – Thailand holds a general
election on July 3 and, given the political turbulence over the
past five years, foreign investors have been selling stocks this
month to limit risk, offloading $682 million in the past seven
sessions.
However, elections have tended to push up the stock market
in the past, and the retail sector outperformed around the seven
polls from 1992 to 2007.
Here is a look at shares that may win or lose this time.
WILL RETAIL, MEDIA BENEFIT?
Retail and media stocks are seen as the best plays since
consumer spending should rise as political parties and state
agencies spend on election campaigns.
The state planning agency is reported as saying election
activities could lead to spending of up to 30 billion baht ($1
billion), higher than in the previous poll in 2007.
Top convenience store chain CP All is among the
top picks in the retail sector. Its shares hit a record high on
May 25 after it told Reuters it expected a strong second quarter
because of election spending. .
Among other stocks singled out by analysts are
motorcycle-loan provider Thitikorn Pcl and top mobile
phone firm Advanced Info Service (AIS) .
Advertising spending, which rose 12 percent in April from a
year before, should also post strong growth in the second
quarter. This is positive for broadcasters BEC World
and MCOT , cinema chain Major Cineplex and
television programme producer Workpoint Entertainment .
About 1 billion baht of spending is expected to flow into
the printing industry, which should benefit printer T.K.S.
Technology .
WHICH COMPANIES ARE IN THE SPOTLIGHT FOR POLITICAL LINKS?
The telecoms sector is highly linked to politics because of
the regulatory system, under which companies pay concession fees
to state firms TOT and CAT Telecom for the right to operate.
Thailand is in the process of setting up a new telecoms
regulator, now expected in the third quarter of 2011. Political
turbulence and frequent changes of government have delayed
reform, in particular stalling the introduction of 3G telephony.
True Corp , the country’s largest integrated
telecoms provider, appears to have done well under the current
Democrat-led government.
After the collapse of a tender for new 3G bandwidth amid
regulatory wrangling, True signed deals with CAT Telecom that
effectively extended its concession by 15 years and enabled it
to be the first to launch nationwide third-generation services
on an existing network.
True is part of unlisted food conglomerate Charoen Pokphand
Group, which is among the big donors to the Democrat Party of
Prime Minister Abhisit Vejjajiva.
Former premier Thaksin Shinawatra made his fortune in the
telecoms sector with Shin Corp . His family sold a
controlling stake in Shin Corp to Singapore’s Temasek Holdings
in 2006, which triggered events that led to his ouster
by the military in September of that year.
In 2010, the Supreme Court ruled Thaksin had concealed
ownership of shares in Shin and tailored government policies to
benefit Shin and its satellite arm Thaicom when in
office.
The Shin group, including affiliates top mobile
firm AIS and Thaicom, denies any connection with politics and
says a recent rise in its share price reflects the performance
of the two units. Even so, some investors seem to think it might
benefit under a government that backs Thaksin.
Also in the spotlight is SC Asset Corp , the property
arm of the Shinawatra family. Its shares hit a seven-year high
in May just before its president, Yingluck Shinawatra, was
selected as Puea Thai’s candidate to be prime minister.
Yingluck is Thaksin’s sister. Although she will cease to be
the president of the company before the election, some investors
feel SC Asset will benefit if she leads the next government.
Her husband is Anusorn Amornchat, president of handset
distributor M-Link Asia Corp . M-Link was founded by
Thaksin’s other two sisters.
WHAT ABOUT STATE COMPANIES AND PROJECTS?
Policies at state-controlled companies like top energy firm
PTT Pcl , national carrier Thai Airways International
Pcl , second-largest lender Krung Thai Bank
and broadcaster MCOT may be reviewed by the next government.
The finance ministry currently plans to reduce its holdings
in the four companies. It has 51 percent of Thai Airways, whose
plans to start up a budget airline have been caught up in
wrangling between the finance and transport ministries.
Finance Minister Korn Chatikavanij backed the idea of
selling at least part of the state’s stake; the transport
minister was opposed to the idea. Puea Thai’s Yingluck has
described state-run firms as “not dynamic” and said state
control was not good.
PTT, which suffers losses in its natural gas for vehicles
(NGV) business as a result of state intervention to hold down
prices, wants the next government to review policy so that NGV
prices reflect actual costs.
Current Energy Minister Wannarat Channukul is in favour of
capping the price of diesel and cooking gas. Wannarat is leader
of the Chart Pattana Puea Pandin Party, one of whose campaign
policies is fuel subsidies.
Bidding for major infrastructure projects has been delayed
by the election and the next government may review projects
approved by its predecessor, which would cause delays.
That would affect Italian-Thai Construction Pcl , Ch
Karnchang Pcl and Sino-Thai Engineering Pcl .
($1 = 30.41 Baht)
(Editing by Alan Raybould and Vinu Pilakkott)