Mingkwanwill be hard act to follow: MCOT shares down 28.75% since coup. Check it out:
(Bangkok Post (Thailand) (KRT) Via Thomson Dialog NewsEdge) Sep. 29--The successor to Mingkwan Saengsuwan, the former president of the SET-listed broadcaster MCOT Plc, will be under pressure to restore investor and employee confidence in the company, analysts say.
Mr Mingkwan and the MCOT board members announced their resignations on Tuesday. They acted in order to accept responsibility for the airing of a state of emergency declaration by former prime minister Thaksin Shinawatra on MCOT's Channel 9, hours before he was ousted by the military on Sept 19.
On Tuesday, MCOT shares on the Stock Exchange of Thailand dropped 4.3 percent to 33.50 baht, as reports of the resignations spread. They plunged a further 11.9 percent on Wednesday before steadying yesterday to close unchanged at 29.50 baht, in trade worth 523.5 million baht. The shares had been at 40 baht the day of the coup and had traded in a range of 37.75 to 40.50 baht since the start of August.
The analysts said it was clear that in investors' minds, Mr Mingkwan had a strong influence over MCOT.
He left Toyota (Thailand) in 2002 to take the top position at the state-run organisation, where he proceeded to make dramatic and successful changes.
In Mr Mingkwan's first four-year term (2002-05), he successfully privatised MCOT, listing it on the stock exchange in late 2004. He also transformed Channel 9 into Modern 9 TV, as well as adopting a niche market strategy for a knowledge-based society.
Television revenue increased by 145 percent and radio revenue by 71 percent. At the same time, the company's total revenue grew by 86 percent and net profit by 48 percent.
An analyst from SCB Securities said Mr Mingkwan was unlikely to return to his job in the future as MCOT was the only channel that had broadcast Mr Thaksin's announcement on the night of the coup.
They agreed that his resignation would have a short-term impact on the company and may affect its business strategy. However, thanks to its strong business foundations, MCOT would not suffer in the long run.
"In the long term, if the new president of MCOT continues with existing business policy, there will be no effects," an analyst at KGI Securities said in a report.
An analyst at Sicco Securities Plc said Mr Mingkwan had a strong leadership image at MCOT and his successor would have to work hard to make the same impression. But the new president should not throw away the current business model laid down by Mr Mingkwan, because it worked well, said analysts.
Patchara Sarapimpa, the president of the state enterprise labour union of MCOT, accepted that the former president's working performance was outstanding. The successor was expected to be as good as Mr Mingkwan.
"As employees, we will not be involved in the selection process of the new president. But we would love to see that our leader is a competent and honest person. As a communication organisation, good communication is important because we have a responsibility to the public," said Mr Patchara.
He explained it would likely take two or three months to appoint a new president.
As a state enterprise under the Office of the Prime Minister, the newly appointed board will be in charge of the selection process, unfortunately, it has to wait until the country has an interim government.
Wasin Teyateeti, president of Media Intelligence Co, a media agency, was still wondering whether the new president would be able to run MCOT as well as Mr Mingkwan. Channel 9 had become more popular among audiences thanks to his skilful management, he added.
Analysts were also concerned that the station's revenue would drop in line with advertising spending by government departments, a major source of MCOT's revenue for years, accounting for 30-35 percent of total revenue.
Analysts said the interim government was unlikely to spend much on advertising.
According to Nielsen Media Research, among the six free TV stations, government departments spent the most advertising money through Channel 9, at 547 million baht in the first eight months of the year, followed by Channel 5 at 339 million and Channel 11 at 219 million baht.
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Copyright (c) 2006, Bangkok Post, Thailand
Distributed by McClatchy-Tribune Business News.
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