Reuters: Hot Stocks: STOCKS NEWS THAILAND-Indorama Ventures up on Q3 outlook

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STOCKS NEWS THAILAND-Indorama Ventures up on Q3 outlook Jul 17th 2012, 05:24 Tue Jul 17, 2012 1:24am EDT Shares in Indorama Ventures Pcl hit their highest in four weeks as a good outlook on the spread of purified terephthalic acid (PTA) raised hopes of an earnings recovery in the third quarter (July-September). Indorama shares were up 3.5 percent at 29.25 baht ($0.93), an increase of 6.4 percent so far in the third quarter, regaining some lost ground from a drop of 27.2 percent in the second quarter due to weak earnings expectations. Broker Phillip Securities rated the stock 'buy', with a target price of 42 baht. It forecast a 76-percent fall in second-quarter earnings due to weak PTA spreads and inventory losses caused by the oil price slide. The second-quarter result is due mid-August. "PTA spreads currently remain at low levels. The low spread environment may cause some high-cost plants to run at a loss, prompting them to scale back production after a cutback in orders for PX feedstock," it said in a report. "The commercial startup of a new PTA plant in China has also been delayed from the third quarter to the fourth quarter. We believe the above factors would be catalysts for a recovery in PTA spreads, helping lift IVL's earnings in the third quarter," it said. 1155 (0455 GMT) (Reporting by Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com) ************************************************************ 11:15 STOCKS NEWS THAILAND: PTTEP's capital-raising risk looms on Cove-analysts The planned acquisition of Cove Energy Plc COVE.L increases the risk of capital raising by Thailand's energy firm PTT Exploration and Production Pcl PTTE.BK, putting a downside on its share price, analysts said. Royal Dutch/Shell RDSa.L abandoned its bid for Cove Energy Plc on Monday, leaving a smaller Thai rival to complete a $1.9 billion takeover after a five-month battle.(Full Story) PTTEP shares were down 0.6 percent at 172 baht, underperforming a 0.5 percent gain of the energy subindex .SETEN and a 0.6 percent rise of the broader stock market .SETI. Analysts advised investors to stay cautious until the capital issuance was resolved. Broker Thanachart Securities rated the stock "sell", broker Tisco Securities rated it "hold" while broker Kasikorn Securities had "neutral" rating. "Given PTTEP's internal leverage guidelines and the fact that it is still short production for 2015/16, we expect PTTEP to issue capital," said broker Kasikorn Securities in a report. "Our base case has a 20 percent equity dilution, which would provide sufficient capital to bolster PTTEP's balance sheet and to make a subsequent acquisition," it said. 1111 (0411 GMT) (Reporting by Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com) ($1 = 31.61 baht) ($1 = 31.6100 Thai baht) Link this Share this Digg this Email Reprints

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