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On July 20, Siam Commercial Bank Pcl [SET:SCB], Thailand's third largest lender by assets, reported its second-quarter 2015 revenues of 32.26 billion baht, down 1% year-on-year, beating the 32.57 billion baht consensus estimate of the 8 analysts according to the Financial Times. The second-quarter 2015 earnings were 3.89 baht per share, down 10.16% year-on-year, beating the 3.75 baht per share estimate of 7 analysts. Non-performing loans (NPLs) rose to 2.22% of total lending at the end of June, versus 2.11% in the same period a year earlier, the bank said in a statement.
SCB is 7.91% weighted on the MSCI Thailand index. The stock could get hit as foreign investors continued their selling. The net sells by foreign investors on the SET have already exceeded 54.1 billion baht year-to-date, up about 117% from a year ago.
Technically, SCB broke down the 5-year trendline support in April. The stock pulled back over 25% from its high and is being supported by the lower trendline of the wedge at the 145 baht level. When the wedge becomes narrower, the stock can either break out or take another leg down.
As the impacts of the Fed rate hike on capital outflows and the yuan devaluation by the People’s Bank of China (PBoC) on China imports and tourists are unclear, foreign investors may use the “sell first and ask later” strategy, meaning the stock could pull back to the next support level at around 132 baht a share.
Disclosure: No position and no recommendation. |
