Floods prompt Tisco to review 2012 economic forecast
Tisco Securities is prepared to review the 2012 economic growth forecast, following the massive damage from historical floods.
At the Investment Forum hosted by the company and Krungthep Turakij today, its CEO Paiboon Nalinthrangkurn said that damage of Bt100 billion is manageable though it could cut the forecast by 1 percentage point.
"What worries us is if Bangkok would be submerged in water, as that would disrupt all economic activities," he said.
Bangkok contributes 25 per cent of the country's gross domestic product.
Tisco Securities said in its earlier research note that if the floods (excluding Bangkok) continue until mid-October, damage would be about Bt82 billion or 0.8 per cent of GDP.
At present, aside from damage to agricultural areas, the automotive and electronics sectors are hit the hardest from the floods due to supply chain disruption. As Rojana Industrial Park and Saha Rattana Nakorn Industrial Estate in Ayutthaya are flooded, over 20 autoparts-making plants are submerged in water. Together, their output account for 10 per cent of total parts production. As such, though most of auto plants are in the East and unaffected by floods, they stand to witness shortages of supplies from Ayutthaya and Pathum Thani.
Listed companies' earning growth is also expected to fall from 10-15 per cent. This should be alleviated by the planned corporate tax cut.
With the floods and bad news overseas, the Stock Exchange of Thailand Index is anticipated to undergo continued volatility in the next six months. The index should end this year at 1,000 points, against earlier forecast of 1,180 points, Paiboon said.
The SET Index today ended 7.97 points higher, to 952.77 points on turnover of Bt26.5 billion.
The index swung from the negative territory in the last hour of trading, as European and other Asean bourses rose after Economic and Monetary Affairs Commissioner Olli Rehn said there is a fairly good chance of averting calamity in Europe.
