By revoking Egat's initial public offering plan, the Supreme Administrative Court may have instead rewarded its affiliates Electricity Generating Plc (Egcomp) and Ratchaburi Electricity Generating Holding Plc (Ratch).

Prudent Siam Securities executive vice president for equity sales Pichai Lertsupongkit said regulators would allow Egcomp and Ratch to participate in the next round of bidding for independent power producers (IPP), launched after Egat's privatisation plan was pulled last Thursday.

Egcomp and Ratch were

prohibited in the past from

joining the IPP bidding as regulators governing electricity would only allow Egat to buy up half

of the new electricity capacity

that is auctioned off.

According to the Stock Exchange of Thailand's data, Egat owned a 25.4-per -cent stake in Egcomp as of September 6, 2005 and 45 per cent of Ratch as of September 1 last year.

Egcomp shares yesterday rose 0.62 per cent to Bt81 apiece while Ratch remained unchanged at Bt39.50.

"The regulator may have to rethink the qualification of IPP bidders. Both firms have an edge over other bidders due to their massive cash reserves and expertise," he said.

Although they would be beneficiaries, Pichai said the two companies were not among the top picks by his brokerage house.

"We prefer gas stocks at the moment. PTT Exploration and Production Plc is our top pick for the energy sector. It possesses a strong projected growth of 17 per cent per year over the next three years," he said.

Another recommended energy stock is Thai Oil after its refining margin has improved from US$4 (Bt160) per barrel early this year to the current $6-$7 per barrel, he said.

Commenting on Egcomp and Ratch benefiting from Egat's setback, he said both firms stand to gain from investors who would need to revise their portfolios

in the wake of the IPO cancellation.

Sicco Securities Plc said Egcomp's and Ratch's earnings forecasts have been raised this year in response to their lower costs and interest expenses.

The broker maintains a "hold" recommendation on the stocks, although it is uncertain if they will join in the bidding.

Meanwhile, Seamico Securities Plc also expects Egcomp and Ratch to benefit from the court ruling.

"We expect funds to flow into the stocks of these firms after institutional investors adjust their portfolios following the court's decision. We maintain a 'buy' ratings for Egcomp and Ratch with fair value at Bt91 and Bt46.50, respectively," said one of its analysts, who asked for anonymity.

Siriporn Chanjindmanee,

Oranan Paweewun

The Nation