Consumer Confidence Dip Tests Stock Beating Mastercard, Visa
Stock Beating Mastercard, Visa Now Tested by Consumer Confidence
(Bloomberg) -- Souring Thai consumer confidence is emerging as a potential threat to a world-beating surge in credit-card provider Krungthai Card Pcl.
The firm’s total return of 170 percent in the past six months is the best globally for consumer-finance stocks with a minimum $1 billion market capitalization, data compiled by Bloomberg show. Rival AEON Thana Sinsap Thailand Pcl rose 59 percent in the same period. Both non-bank Thai lenders were helped by a jump in consumer confidence that bolstered earnings but is at risk of fizzling.
"It’ll be very tough for Krungthai Card and other credit-card firms to maintain the stellar earnings growth of 2017," said Adisorn Mungparnchon, an analyst at Phillip Securities Pcl in Bangkok. Domestic consumption likely isn’t robust enough to sustain strong cardholder and lending growth through this year, Adisorn said.
Others appear more optimistic on the outlook. Citigroup Inc., for instance, is buying unsecured personal loans and credit-card portfolios from Tisco Financial Group Pcl, betting Thai consumer finance needs will stay high.
Shares in Thailand’s banks have performed less well over the past six months than Krungthai Card and AEON Thana Sinsap, in part because the banks are grappling with a climb in non-performing loans.
Bangkok-based Krungthai Card’s net income advanced 33 percent to 3.3 billion baht ($106 million) in 2017. AEON Thana Sinsap’s profit increased 56 percent to 750 million baht in the three months through November from a year earlier.
Consumer confidence in military-run Thailand dipped in February for the first time in seven months, hurt by further delays in plans for a return to democracy and an uptick in political demonstrations. The report for March is due on Thursday.
Krungthai Card tumbled 9.5 percent on Wednesday to a two-week low of 266 baht. AEON Thana Sinsap fell 7 percent, the most since Jan. 16, to 162.5 baht.
To contact the reporters on this story: Lee Miller in Bangkok at lmiller@bloomberg.net, Anuchit Nguyen in Bangkok at anguyen@bloomberg.net.
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Sunil Jagtiani, Tony Jordan
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