Reuters: Hot Stocks: STOCKS NEWS THAILAND-Bank of Ayudhya up slightly amid GE divestment talk

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STOCKS NEWS THAILAND-Bank of Ayudhya up slightly amid GE divestment talk Sep 18th 2012, 05:54 Tue Sep 18, 2012 1:54am EDT Shares in Bank of Ayudhya Pcl made small gains as investors turned cautious about the possibility of low divestment price by shareholder General Electric Co. At the midsession break of 0530 GMT, Bank of Ayudhya shares were up 0.7 percent at 35.5 baht. The shares climbed 2.2 percent on Monday after Reuters reported that GE had hired Morgan Stanley to review its 33 percent stake in the Thai bank, which could potentially lead to a sale by the U.S. conglomerate of its near $2.2 billion holding. Broker Bualuang Securities said the stock's high valuations could cap the divestment price. The stock traded at a 2012 price to book of 1.9 times versus the Thai bank sector mean of 1.7 times and the regional banking average of 1.9 times, it said. "In Thai bank takeovers in recent years, acquisition targets have been bought at big premiums to their valuations. But in those cases, the banks in question had low valuations," the broker said in a report. "The scope for short-term speculative gains is probably modest. GE might even be prepared to sell at a discount to the market price, given that it probably needs the funds," it said. Bank of Ayudhya shares have risen 61.4 percent so far this year, outperforming a 33.8 percent gain of the bank subindex and a 24 percent gain of the SET index. 1237 (0537 GMT) (Reporting by Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com) Link this Share this Digg this Email Reprints

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