Reuters: Hot Stocks: STOCKS NEWS THAILAND-Banks fall after Q3; Bangkok Bank near 4-month lows

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STOCKS NEWS THAILAND-Banks fall after Q3; Bangkok Bank near 4-month lows Oct 22nd 2012, 04:37 Mon Oct 22, 2012 12:37am EDT Banking shares fell 0.8 percent as investors took profits after third-quarter results came broadly in line with expectations, with Bangkok Bank underperforming the sector as it posted lower-than-expected profit. The benchmark SET index was down 0.01 percent. The banking subindex has shot up 32.3 percent so far this year versus a 27.2 percent gain of the SET index. Shares of Bangkok Bank, the top lender by assets, fell as much as 2.7 percent to 188.5 baht, the lowest since June 24. Thai banks posted a 24 percent year-on-year increase in July-September quarter earnings on the back of loan growth and fee income, Thanachart Securities said in a report. Market leaders saw mixed results. Bangkok Bank reported the weakest earnings growth of 3.3 percent while Thai Military Bank posted the strongest earnings growth of 92 percent. Nomura cut Bangkok Bank's target price to 262 baht from 277 baht, saying its relatively weak third quarter was due to its biggest funding drive since 1997 and lower non-core revenues. The broker kept a 'buy' rating on Bangkok Bank thanks to positive prospects for the corporate and SME loan cycle, while keeping Kasikornbank also among its top picks. "Our view remains that an investment and corporate/SME loan cycle are rising from depressed levels for the first time since 1997 with BBL as the key player," Nomura said in a report. The Bank of Thailand's policy rate reduction last week boded well for the future of loan demand while the impact of lower interest rates on banks' net interest margins would be relatively small, brokers said. "The BoT rate cut was just to try to help sentiment. So they cut rates a little bit to maintain the core. But most banks, as long as they have lending still in the pipeline, are quite strong," said Bualuang Securities banking analyst Suwat Bumrungchatudom. 1112 (0412 GMT) (Reporting by Paul Carsten and Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com); Editing by Jijo Jacob Link this Share this Digg this Email Reprints

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