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Phatra Securities, the country's second largest stockbroker, says revenues in the second half will be lower than in the first half as turbulent markets lead companies to shelve initial public offering plans. Phatra expects market volumes to fall as investors are put off by political uncertainty surrounding Prime Minister Samak Sundaravej's six-month old leadership, the loss of several ministers as part of an anti-graft push, and the handling of a border row with Cambodia.
Daily market turnover on the Stock Exchange of Thailand _ which has shed around 20% of its value so far this year _ will be less than the average of about 20 billion baht it earlier forecast and this could exacerbate volatility, said chief executive Suvit Mapaisarnsin in an interview.
''If there is volatility, it's logical that if someone is planning a deal they might put off the decision,'' he said. ''For that reason, our second-half revenue (compared to the first) will obviously be hit.''
In the first half of 2008, Phatra posted a 33% rise in net profits to 297 million baht on revenue of 856 million baht, mainly driven by its underwriting fees from the IPO of Esso Thailand.
Phatra said it planned to diversify its investments and income and strengthen ties with its US investment bank partner Merrill Lynch.
The company has three initial public offering mandates this year, but with rocky markets weakening confidence, the firm now hopes for just a single deal, Mr Suvit said.
Phatra, which has handled orders and shared clients with Merrill Lynch since 2003, will soon invest in at least AA-rated bonds overseas and sell new investment products to spread its earnings risk, Mr Suvit said.
''We now do several things to branch out our incomes. We have wealth management and we'll invest in foreign bonds and look for new products to serve customers,'' he said of its derivative warrant sales planned in the fourth quarter.
PHATRA shares closed yesterday on the Stock Exchange of Thailand at 26.75 baht, up 1.25, in trade worth 24.9 million baht. REUTERS
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