Banks hope Q2 profits help calm SET jitters
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The rise in household debt is a concern for stock analysts because it is indicator of the profitability of listed companies related to consumption especially in the auto, property and commercial sectors.
Tanadech Rungsrithananon from Krungsri Securities said yesterday that banking is the first sector to release quarterly performances. Analysts believe the financial results of this industry will help calm down the stock market’s jitters over the uncertainty of QE.
The second-quarter profits of the banking sector are expected to show good momentum in loan growth. Listed energy companies are also expected to show healthy earnings because this sector bottomed out in the first quarter. The energy sector is a sector paying good dividends.
Another sector that is expected to report strong growth in the second quarter is telecommunications, which has benefitted from the move to 3G. The return on equity in this sector is 50 per cent against 15 per cent for industry in general.
The house believes the fundamentals of the Thai economy are strong enough to deal with the global economic uncertainty but the capital reversal is creating volatility in the equity market. However, for the long term, analysts are upbeat on the QE exit since it means the US economic recovery would help world trade and Thai exports, he said.
The Thai economy might have to start relying on public investment. Listed companies in the banking and construction materials sectors are the frontrunners in cashing in on that trend. Auto, real estate, tourism and commercial sectors are the next industries to gain an advantage. The SET index has a good chance of going on next year from the targeted 1,680 points for this year-end, he added.
Krungsri Securities is also joining forces with Krungsri Asset Management and Bank of Ayudhya to provide a wealth management strategy to ensure customers will sustain growth despite the market volatility, said Kris Chantanotoke, executive vice president of wealth management at BAY.
The three business units’ synergy will help increase customer referrals and sales agents of wealth management businesses.
By 2016, the bank targets to increase its referrals of its depositors to Krungsri Securities to 35 per cent from 15 per cent this year.
A BAY customer now uses 2.8 products. The bank targets three products this year from the synergy.
“We will strongly promote two deposit products – Mee Tae Dai Savings with a high rate and Jud Hai Savings with convenient transactions – to support the financial and investment transactions of customers of Krungsri Securities and Krungsri Asset Management, as we found those customers are not the bank’s depositors yet,” he said.
The bank is launching deposit campaigns for savings and current accounts in the rest of the year as part of fund mobilisation to serve loan demand in the fourth quarter, which is high season for retail spending.
