Business News - Tuesday December 18, 2007
MCOT shares tumble 11% after PTT ruling
MCOT Plc shares fell by more than 11% yesterday as investors expressed concern that last week's Supreme Administrative Court ruling on PTT Plc would hurt the state-owned broadcaster.
Analysts said concern that the new Radio and Television Broadcasting Act might hurt revenues was another concern. The National Legislative Assembly is due to consider the bill tomorrow.
MCOT shares closed yesterday at 22.80 baht, down 2.95, in trade worth 207.58 million baht. The stock is trading at the lower end of its 52-week range of 17.50 to 40 baht.
MCOT, which is 66% controlled by the Finance Ministry, listed on the Stock Exchange of Thailand in July 2004.
Kim Eng Securities said in a research note that MCOT shares dropped due to worries that the broadcaster could be the subject of a court challenge similar to the one made to PTT.
If so, MCOT could be at risk of having to transfer assets such as broadcasting antennas, studios or other assets back to the state. It could then be forced to pay rent, affecting future operating costs.
The new law, which will replace the 1955 Broadcasting Act, requires operators to contribute 5% of revenues to a pool to support public services.
MCOT president Wasan Paileeklee acknowledged that investors dumped shares yesterday due to worries about the possibility the company could be face a court case similar to the PTT case.
However, he was confident that MCOT's privatisation was different from PTT's since it had no assets to expropriate.