Bangkok--Jun 9--SET
The Research Department of The Stock Exchange of Thailand has released its ‘SET Note’ report for Q2/2005. The current ‘SET Note’ assesses the fundamentals of firms in the real sector as well as analyzing their cash flows and related ratios. It was found that Thai listed companies have slowed down their investments but remained fiscally efficient even during H2/2004, when the Thai economy slowed its pace.
Senior Vice President of the SET Mr. Sethaput Suthiwart-Narueput, Ph.D., talked about the Q2/2005 issue of the ‘SET Note’ report which links corporate fundamentals with macro-economic issues. In this issue, the SET assessed the financial health of listed companies in the real sectors by analyzing their cash flows and ROCE ratios (Return on Capital Employed), which indicate how efficient the firms utilized their capital. It was found that Thailand’s improved economic conditions resulted in higher incomes for companies, better cash flows, better debt-servicing as well as increased dividend payments. It also determined that these firms were being more cautious, resulting in a slow-down in their fixed asset investments.
“Investments in fixed assets by listed companies (excluding those in the financials group or under rehabilitation) were mainly in the Resources, Services, and Property & Construction sectors, representing more than two-thirds of the total investments of the listed companies,” Mr. Sethaput said.
He continued, “Although investments in fixed assets have been slowing, the firms have still been operating efficiently, as they continue to earn well by making the best use of their capital, as observed in their ROCE ratios. The listed companies’ ROCE ratios have continually increased over the past three quarters, from 16.6% in Q3/2004 to 17.65% and 18.37% in Q4/2004 and Q1/2005 respectively. This increase occurred even though the Thai economy started to slow down in H2/2004.
“The firms having increased ROCE ratios include those in the Agro & Food Industry, Industrials, Property & Construction, Resources and Technology groups.
“Their greater efficiency, as observed in their increased ROCE ratios, was partly due to an increase in their revenues which was a result of Thailand’s economic expansion and partly because they started to become more cautious in their investing in fixed assets and expanding their businesses,” Mr. Sethaput noted.
The ‘SET Note’ report is a publication of the SET’s Research Department. The report has been produced quarterly since Q1/2004. Next issues will be released on Sept. 8 and Dec. 8. The ‘SET Note’ report contains data tables that will show current investment conditions, overall listed companies’ efficiency, profitability, and risks, as well as their returns on investments. This micro-overview information is a useful add-on to the report’s macroeconomic analysis. The micro/macro combination offered in the ‘SET Note” report is currently not available anywhere else in the market. People interested in the ‘SET Note’ can download it from www.set.or.th/services/files/SET_Note_june_2005.pdf
For more information,
please contact the Corporate Communication Dept.:
Ladawan Kantawong Tel: 0-2229-2036
Kulvida Jintakawong Tel: 0-2229-2037
Nattaporn Boonprapa Tel: 0-2229-2049
Watsamon Saowakhonsathien Tel: 0-2229-2797 End.