Thai builders, laggards in Southeast Asia the past two years, are poised to rally as the government boosts infrastructure spending to spur the economy, according to UOB Kay Hian Securities (Thailand) Co
Comparing Thai contractors with their Indonesian and Malaysian peers since March 2013, shares of Italian-Thai Development Pcl, Sino-Thai Engineering & Construction Pcl and Ch Karnchang Pcl lagged their Indonesian counterparts as projects got delayed or shelved amid more than six months of political protests that ended with May's coup.
The regime's 3 trillion baht investment roadmap through 2022 is fuelling speculation contractors will surge, much the same way Indonesian companies have been propelled by the spending plans of President Joko Widodo, who came to power after elections in July. Prime Minister Prayut Chan-o-cha plans to build roads, railways, transit systems and airports to stimulate Southeast Asia's second-largest economy, which grew last year at its slowest pace since 2011.
"Thai construction companies have been battered by missed opportunity as political chaos and legal disputes derailed infrastructure development," Kowit Pongwinyoo, an analyst at UOB Kay Hian, said by phone on Tuesday. "The golden year should be coming as the military government has strong intentions to push through some delayed and new projects."
Gen Prayut met Chinese Premier Li Keqiang in December to discuss a rail-and-port venture, with construction expected to begin in October, Transport Minister Prajin Juntong said last week. Joint development of other train projects with Japan will be discussed next month by officials from the two nations, according to Prajin.
The Thai economy will expand as much as 4.5% this year, spurred by public works spending, according to government forecasts. That compares with 0.7% last year. Indonesia's gross domestic product increased 5% in 2014 and is forecast to grow 5.3% this year. PT Pembangunan Perumahan, the nation's second-largest contractor by market value, has more than quadrupled over the past two years.
