At the end of the morning session on Monday, the share price of TMBThanachart Bank Public Company Limited (SET: TTB) decreased by 2.48% or THB 0.05 to THB 1.97, with a trading value of THB 771.42 million.
Bangkok Bank Public Company Limited (SET: BBL) dropped by 1.26% or THB 2.00 to THB 157.00, with a trading value of THB 705.30 million.
SCB X Public Company Limited (SET: SCB) declined by 0.89% or THB 1.00 to THB 111.00, with a trading value of THB 630.47 million.
TISCO Financial Group Public Company Limited (SET: TISCO) contracted by 1.03% or THB 1.00 to THB 96.50, with a trading value of THB 122.69 million.
Kiatnakin Phatra Bank Public Company Limited (SET: KKP) slumped by 1.93% or THB 1.00 to THB 50.75, with a trading value of THB 140.45 million.
Bank of Ayudhya Public Company Limited (SET: BAY) lost 1.82% or THB 0.50 to THB 27.00, with a trading value of THB 10.78 million.
Kasikornbank Public Company Limited (SET: KBANK) remained unchanged at THB 157.50, with a trading value of THB 1.12 billion.
Krung Thai Bank Public Company Limited (SET: KTB) remained unchanged at THB 20.50, with a trading value of THB 317.75 million.
Pi Securities highlighted a deceleration in the share prices of bank stocks following recent sharp increases. The slowdown is potentially linked to investor apprehensions regarding the sector’s performance amidst an anticipated downward trend in interest rates, with speculation surrounding an interest rate cut by the US Federal Reserve in the upcoming meeting. The development also put pressure on the Bank of Thailand’s policy rates, contributing to the hesitation in bank stock investments.
This situation may open up a potential opportunity for the Monetary Policy Committee (MPC) to consider reducing interest rates, especially as inflation rates in Thailand have declined and the Thai baht has seen a rapid appreciation.
On the other hand, Daol Securities (Thailand) has upgraded its investment rating for bank stocks to ‘Overweight’, citing potential for the sector to surpass market performance with the return of inflows to the Thai stock market following a global trend of declining interest rates.
The introduction of the ‘Vayupak Fund’, with a value of THB 150 billion set to commence this October, is anticipated to contribute to an improved performance in the Thai economy. The stimulus measures introduced by the new government are expected to bolster profits in the banking sector, leading to a potential upside from the previous estimates of credit growth of 2-3% year-on-year in 2024-2025. Additionally, NPL is expected to rise, but at a lower rate than expected, while numerous banks are beginning to establish Joint Venture Asset Management Companies (JV AMC).
The analyst has adjusted upward the net profit projections for the banking sector in 2024-2025 by 2%, primarily attributed to profit enhancements from investments. Consequently, the sector is expected to achieve net profits of THB 205 billion and THB 217 billion, marking a year-on-year increase of 5% and 6%, respectively. This improvement is largely driven by the reduction in provisions.
The banking sector outperformed the SET Index by 6% over the past 3 and 6 months due to the steady influx of international funds.
