CGS International Securities (Thailand) (CGSI) forecasts that the Stock Exchange of Thailand (SET Index) will face pressure from international political factors, particularly the tense relations between the U.S. and China, and news related to President Donald Trump’s potential move to remove the Federal Reserve (Fed) chairman. CGSI projects the SET Index to fluctuate between 1,105 and 1,150 points.
Although the Thai stock market has underperformed compared to regional markets since the beginning of the year and has not recovered clearly yet, CGSI notes that there are still short to medium-term pressures to be closely monitored.
Domestically, important developments affecting the overall market include: (1) The indefinite postponement of tariff negotiations with the U.S., originally expected on April 23, 2025, awaiting a response from the U.S. and the U.S. Trade Representative (USTR); (2) Intensified tensions between the U.S. and China, notably warnings to countries planning trade talks with the U.S., which impacts market confidence; and (3) Internal political conflicts between the Pheu Thai and Bhumjaithai parties.
Recently, the Bhumjaithai Party announced it would not support the Entertainment Complex law proposed by the Pheu Thai Party, citing the government’s need to prioritize urgent issues, such as the Auditor General’s office building collapse and climate change challenges, leading to high uncertainty in governmental policy pushing.
As for the banking sector’s performance that CGSI covering, including SCB, KBANK, KTB, BBL, TTB, TISCO, KKP, and CREDIT, the total net profits for Q1/2025 stood at 59.3 billion baht, a 5.7% increase from the previous year, and an 11.3% rise from the previous quarter. Most reported profits exceeded company and market expectations, except for KKP, CREDIT, and TTB.
However, overall loan growth has slowed, down 1.2% from last year and 0.6% from the previous quarter, while NIM decreased by 22 bps from last year and 19 bps from the last quarter. This aligns with downward policy interest rates from Q4/67 to Q1/25. The next quarter’s performance is expected to face ongoing pressure from declining interest rates, stricter lending standards, and increased credit cost from global trade war risks.
Highlighted stocks currently recommended BDMS, expected to outperform BH consistently, benefiting from a rise in international tourists, with a recommended ‘Profit Taking’ at 25.0 baht and Stop loss at 22.8 baht. Meanwhile, CPALL is another standout stock, projected to report strong Q1/2025 normalized profits at 6.9 billion baht, up 14.5% from last year, driven by growth in ready-to-eat food sales and increased customer numbers in 7-Eleven stores. Expect same-store sales growth to rise by 3% from last year, with a recommended Take profit at 51.50 baht and Stop loss at 49.00 baht.
