Reuters: Hot Stocks: STOCKS NEWS THAILAND-PTTEP's capital-raising risk looms on Cove-analysts

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STOCKS NEWS THAILAND-PTTEP's capital-raising risk looms on Cove-analysts Jul 17th 2012, 04:15 Tue Jul 17, 2012 12:15am EDT The planned acquisition of Cove Energy Plc increases the risk of capital raising by Thailand's energy firm PTT Exploration and Production Pcl, putting a downside on its share price, analysts said. Royal Dutch/Shell 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. PTTEP shares were down 0.6 percent at 172 baht, underperforming a 0.5 percent gain of the energy subindex and a 0.6 percent rise of the broader stock market . 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) Link this Share this Digg this Email Reprints

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