In the midst of various economic challenges in 2011, listed companies on the Thai Stock Exchange reported a moderate growth in net profits. Tientip Subhanij, director of the SET’s Capital Market Research Institute, revealed that these firms saw a 2.4% increase in their combined net profits for the first nine months of 2011, totaling 511.9 billion baht compared to the 500 billion reported in the same period the previous year.
Notably, sales revenue experienced a more considerable surge, increasing 30% year-on-year to a total of 6 trillion baht for companies listed both on the Stock Exchange of Thailand and the Market for Alternative Investment. The third quarter of the year alone accounted for 2.19 trillion baht of the total sales revenue.
Despite the evident growth, Dr. Tientip cautioned that these figures do not account for the 74 companies that had yet to report their third-quarter results due to disruptions caused by flooding. Although the SET granted these companies an extension beyond the initial November 15th deadline, she assures that their pending results would not significantly alter the overall figures.
The flooding, which critically damaged 30 firms, is expected to impact earnings in the fourth quarter, albeit Dr. Tientip anticipates only a slight effect on the market as a whole. In the backdrop of these events, foreign investors have remained more focused on global affairs, specifically in Europe.
Interestingly, foreign fund flows into emerging markets like Thailand have increased since October 2011, a shift in investor sentiment following the appointment of new leaders in Greece and Italy. Additionally, expectations of further stimulus in the US economy through a third quantitative easing (QE3) programme have also influenced this trend.
However, as of October 2011, foreign investors continued to be net sellers, with a total of 4.79 billion baht. Nevertheless, they were net buyers of 30.84 billion baht worth of Thai shares in October after two months of net selling.
By the end of October, the SET market capitalisation was 7.99 trillion baht, up 6.46% from the previous month. Meanwhile, the daily trading turnover for the SET and MAI decreased slightly in October to 26.04 billion baht.
Looking ahead, the main concern for the remainder of 2011 remains the euro zone debt, while local politics has not been significantly impacting stock trading. As Dr. Tientip puts it, “Thailand had made it through a political crisis last year.”