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“The idea for producing the SETNote report stems from the gap we’ve seen among the research reports currently available in the market. There are agencies responsible for producing macro-level reports, e.g., the Bank of Thailand, the National Economic and Social Development Board, or research bodies in the private sector, while most securities companies emphasize company or sector research. However, there’s not really a report showing the implications between the macroeconomic overview and listed companies’ performances. That’s why we have decided to produce SETNote,” the SET SVP said.
The first SETNote released was “Listed Companies’ Financial Structures and the Impacts from Past Interest Rate Trends and Investment Levels”, which analyzes the listed firms’ 2004 operational performances.
An interesting result identified showed that an upward trend in interest rates is not likely to have much of an affect on listed companies, as their operational performances improved while their debt-to-equity (D/E) ratio declined. The ability to service their debts, as shown in the average interest coverage ratio, increased from 3.57 in 2002 to 9.66 in 2004. Over the same period, the D/E ratio decreased from 2.03 times to 1.22 times.
The declined D/E ratio indicates that the listed companies were more cautious in making their investments. Approximately 42% of the listed companies have invested less than the depreciation of fixed assets. Investments were mainly in the Energy, Transportation, and Communication sectors.
People interested in the SETNote can download the report from www.set.or.th at the ‘Research’ link (on the Thai language page) from today onwards. SETNote will be issued quarterly, after all listed companies have submitted their financial statements.
