SET-listed firms' combined net profit in last year's fourth quarter is estimated to have plunged nearly 40% year-on-year on slower global growth and falling oil prices, brokerage firms say.
Aggregate net profit is likely to have declined 39% year-on-year and 40.5% quarter-to-quarter, according to research by Finansia Syrus Securities.
Total net profit for full-year 2018 is estimated at 970 billion baht, a figure lower than market expectations, Finansia Syrus said.
An analyst who requested anonymity said it's likely that many research houses will revise down forecasts for the local stock market's performance and earnings per share (EPS) this year to reflect an amendment to the labour protection law.
The National Legislative Assembly passed an amendment entitling workers laid off after 20 years of service to the equivalent of 400 days of pay. The new rate is expected to come into force by January or early February next year.
Besides external risks affecting investment sentiment, the amendment is a factor that could hurt companies' earnings growth, the analyst said.
Asia Plus Securities (ASP) estimates that 563 listed companies or 99% of the SET's total market capitalisation disclosed total fourth-quarter net profit of 156 billion baht, down 39% year-on-year and 40.5% quarter-to-quarter.
"For this year's earnings performance, there is a risk of a downward revision of EPS growth to a certain degree," ASP said.
Although combined net profit is poised to drop, aggregate net profit estimations are projected to dip by a lower margin, according to two other brokerage firms.
Supaporn Leenabanchong, chief investment officer of Krungsri Asset Management, said the aggregate net profit of SET-listed firms in 2018 will be down an estimated 2%, with lower oil prices in last year's final quarter and the slowing global economy the main factors denting corporate earnings.
Despite an anticipated net loss, Thai equities are still attractive for long-term investment, she said, as they generate higher average return than other assets.
According to research by Kasikorn Securities, the combined net profit of SET-listed firms declined by roughly 5% in the quarter as companies beefed up capital reserves in response to the labour protection amendment.
In related news, the SET index for the first two months of this year rose by 5.7% from year-end 2018, with total market capitalisation registered at 17.2 trillion baht, said SET senior executive vice-president Soraphol Tulayasathien.
Average daily trading value of the SET and the Market for Alternative Investment in February fell by 3.7% from the previous month to 46.77 billion baht.
Funds mobilised through IPOs during the first two months were valued at 5.68 billion baht, the highest amount in Asean, the SET said.
