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Published on January 5, 2008

A Kiatnakin Securities analyst told Krungthep Turakij daily yesterday that the ministry's calculation of 30-year rents at Bt7.8 billion is below the previous estimate of Bt8.9 billion. The rental expenses would cut PTT's prospective earnings per share by only Bt1.40, less than the earlier estimate of Bt3.42. PTT's fair price was adjusted to Bt454 to reflect the good news, based on a profit forecast of Bt100.3 billion this year, he said.

"PTT will book the back rent and penalty of Bt1.6 billion in the fourth quarter [of 2007], and the annual rent of Bt207 million will be booked this year," he said.

The clearer picture for PTT should restore the confidence of investors, particularly foreigners. PTT should also benefit from the upward trend in energy prices.

Yesterday, PTT shares continued to slide, losing Bt14 or 3.89 per cent to Bt346. The Stock Exchange of Thailand Index also fell 10.92 points or 1.31 per cent to 821.71.

Seamico Securities said in a report that PTT would need to book the back rent, fine and transfer taxes totalling Bt3.8 billion in 2007. It said the annual rent of Bt215 million would cut only 0.15 percentage point from the company's 2008 performance.

Seamico also recommended investors to buy the stock, estimating its fair price at Bt437.

DBS Vickers Securities (Thailand) set its fair-price estimate at Bt454. The securities house calculated the rent due, penalty and transfer taxes at Bt5.5 billion. The average annual rent throughout the 30-year lease was 7.3 per cent, under the expected 10 per cent.

Finansa Securities also raised PTT's fair price from Bt493 to Bt496, citing the lower-than-expected financial pain.

The Nation