Sorrayuth scandal takes toll on BEC World's share price
BEC World's stock has crashed by almost 7 per cent in four days amid reports that major companies plan to withdraw their commercials from the TV programmes of Sorrayuth Sutassanachinda on Channel 3.
Shares of BEC closed yesterday at Bt57, down by Bt1.50 or 2.56 per cent. In the past four days, the shares have retreated by Bt4.25 or 6.9 per cent.A Kiatnakin Securities analyst said that unless Channel 3 comes out and reveals its policy in doing business, there would be uncertainty in BEC’s income from commercial airtime sales and that would hurt its stock. Channel 3 is under Bangkok Entertainment, a BEC subsidiary.
Sorrayuth has three of his daily programmes – “Ruang Lao Chao Nee”, “Ruang Den Yen Nee” and “Ruang Lao Sao Athit” – running on Channel 3, which contribute about 20 per cent of BEC’s revenue.
Tough competition ahead
In the long term, the Kiatnakin analyst recommends selling BEC as its stock price is higher than the estimated value of Bt47.60 per share.
There are also future risks from greater competition from the expansion of satellite and cable TV and digital TV.
The Anti-Corruption Network on Tuesday, in an open letter, asked Channel 3 to reveal its stance on the alleged graft offences involving news talk show host Sorrayuth.
The letter, signed by ACN chairman Pramon Sutivong and sent to station operator BEC World, reminded the management of its obligation to ensure transparency and fight against corruption.
The ACN outlined the case against Sorrayuth, which stemmed from a ruling by the National Anti-Corruption Commission that found grounds to suspect fraudulent transactions between Sorrayuth’s news production house, Rai Som, and listed MCOT, which is majority-owned by the state.
A Maybank Kim Eng Securities (Thailand) analyst said it was difficult to estimate the damage to BEC’s shares as it was uncertain how many sponsors would drop their TV commercials from Sorrayuth’s shows. Even if all the advertisers leave, there might be other products wanting to sponsor the programmes.
“BEC’s main income still comes from evening soap operas and after the evening news,” the analyst said. “We will also have to see when the commercials will be withdrawn. Normally they are placed in advance.”
The reports might have hit BEC’s shares but the steep decline also reflected profit-taking by investors after the price rose much earlier, he said.
