Bangkok, September 25, 2014 - The SEC organized ?3rd SEC Working Papers Forum?, jointly with the Faculty of Business Administration and the Faculty of Management Sciences, Kasetsart University presented three research papers on ?Listed Company Assessment?.
Dr. Vorapol Socatiyanurak, SEC Secretary-General said that the third SEC Working Papers Forum, organized under the MoU with four leading business schools aiming to provide a platform for capital market research presentation and implementation. The Faculty of Business Administration and the Faculty of Management Sciences, Kasetsart University presented the papers on ?Listed Company Assessment?. The first study showed a forecasting model developed to predict the listed companies? conditions, resulting in the same direction as credit rating announced by TRIS Rating. The second study revealed certain factors indicating significant turnaround financial determinants in cases of securities on turnover list, providing recommendations for improvement of rules monitoring listed companies. Meanwhile, investors are suggested to consider several factors in making investment decision in listed companies. The third study on purchase of shares by persons with access to inside information and the number of directors indicated direction of the earning management of listed companies, especially for those in financial sector.
Dr. Nattawoot Koowattanatianchai, researcher, Faculty of Business Administration, Kasetsart University described the study on the relationship between credit ratings and probabilities of falling into financial hardship in cases of companies listed on the SET. The said study aimed to create a model for predicting probabilities of falling into financial hardship in cases of listed companies by applying non-complex data and technique. Besides, the prediction can be used to rate the companies and compared with credit ratings announced by credit rating agencies. The model so developed impressively gave more accurate prediction on the financial status of listed companies than Altman?s Z-score model* while predicting probabilities of falling into financial hardship in the similar direction as credit rating announced by TRIS rating
Assoc. Prof. Pattaragit Netiniyom, researcher, Faculty of Business Administration, Kasetsart University revealed the result of study on changes in 9 variables including the rate of change in gross profit, liabilities, total income, free cash flow, share prices, earnings per share, amount of cash flow, amount of earning per share and number of times being listed on the turnover lists, all of which were used to test with the sample group of securities on the turnover list. The test demonstrated turnaround financial determinants among the said sample group, such as asset growth, access to fund source or profitability. Therefore, if there would be any revision of securities trading regulations in the future, more variables reflecting turnaround financial determinants should be added to better reflect appropriate returns based on the fundamentals of particular securities.
Dr. Suntharee Lhaopadchan, researcher, Faculty of Management Sciences, Kasetsart University, said that purchase of shares by persons with access to inside information in case of companies in financial sector can indicate the direction of listed companies? earning management while material information concerning corporate governance is the number of directors.
*The standard model of Altman or Altman?s Z-score model is a well-known model for company?s bankruptcy determination.
Note: The research paper was presented under the Memorandum Of Understanding between the SEC and Chulalongkorn University, Thammasat University, Kasetsart University and National Institute of Development Administration, the leading business schools, aiming to publicize researches and exchange of knowledge and experience between academics and capital market industry.