Bangkok--16 Dec--Fitch Ratings
Fitch Ratings has today affirmed Thailand's Asia Plus Securities Public Company Limited's (ASP) National Long-term rating at 'A-(tha)' and National Short-term rating at 'F2(tha)'. The Outlook is Stable.
The ratings reflect ASP's strong domestic retail brokerage franchise and solid capital and liquidity positions. ASP's National Long-Term rating and the Stable Outlook are based on Fitch's expectation that the company will maintain its strong franchise, capital and liquidity. The agency notes though that increased risk appetite and higher market volatility, that would adversely affect its capital and liquidity positions, could lead to a negative rating action. A positive rating action may be taken if ASP maintains a strong financial profile, and if there is sustainable growth in profitability from its business diversification strategy, without compromising its risk profile.
ASP's performance in 2009 improved significantly from 2008, with stronger net profit given the higher revenue from all business lines. Performance in 9M10 also improved strongly with net profit increasing 47% yoy to THB536m driven mainly by investment gains and higher brokerage commissions following stronger trading volume. The impact from commission liberalisation has been minimal, and ASP expects it to be at a manageable level when full liberalisation takes place in 2012.
Total securities receivables at end-September 2010 increased to THB3.94bn (end-2009: from THB1.72bn), in line with higher trading volume. Margin loans, which account for about half of total receivables, have increased strongly, although the risk remains minimal as these are mitigated through margin calls and force sales. Impaired receivables remain modest at 1.4% of total receivables. While credit and operational risks have remained relatively stable, market risk has risen given ASP's increased risk appetite as seen in its expansion strategy towards equity derivative business.
ASP's liquidity position is considered strong, with liquid assets of THB2.8bn or 35% of total assets at end-September 2010, though this has declined from 46% at end-2009 due to strong growth in securities business receivables. ASP has started raising funds through borrowings in Q310. While the amount remains modest with debt/equity of 0.14x, it is likely to increase to fund future business expansions. Its capital base is of high quality, and the net capital ratio (NCR) level remained strong at over 100%.
ASP is Thailand's third-largest securities brokerage company by market share. The company was founded in 1974 by the Sophonpanich family, who founded Bangkok Bank Public Company Limited (BBL), the largest Thai bank by assets. ABN AMRO Asia Securities merged with Asset Plus Securities in 2004 and changed the company's name to ASP. BBL remains the largest single shareholder with an 8.5% stake, although the bank has limited involvement in business or management. Other major shareholders include the Sophonpanich family (15.1%) and ASP's management (3.5%).
Contacts:
Primary Analyst
Narumol Charnchanavivat
Director
+662 655 4763
Fitch Ratings (Thailand) Limited
55 Wireless Road
Lumpini, Patumwan
Bangkok 10330
Secondary Analyst
Vincent Milton
Senior Director
+662 655 4759
Committee Chairperson
Jonathan Lee
Senior Director
+886 2 8175 7601
Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215,
Email:
[email protected].