On Monday at 11:32 AM (Bangkok time), the share price of Ananda Development Public Company Limited (SET: ANAN) jumped by 9.09% or THB 0.05 to THB 0.60, with a trading value of THB 15.58 million.
Krungsri Securities (KSS) foresees a slightly positive outlook following the Bank of Thailand (BOT)’s decision to cut interest rate by 0.25%, bringing it to 2.0%. This reduction creates the possibility for commercial banks to lower their loan interest rates, which would benefit the real estate sector in two ways:
- Lower interest costs for real estate companies, reducing the downside risk for the 2025 net profit estimates.
- Reduced interest expenses for borrowers, increasing their chances of loan approval, thereby indirectly boosting demand.
Currently, the average cost of debt for the real estate sector stands at 3.7%. A reduction of every 12.5 basis points (0.125%) of the figure, focusing solely on bank loans, would potentially decrease interest expenses by approximately 196 million baht per year.
This change could provide an upside of about 0.7% to the net profit estimates for the real estate companies, projected to be around 29.2 billion baht in 2025. The greatest beneficiaries from this change would be firms with lower profit bases such as LPN and ANAN, and those with higher interest expenses such as ORI, SC, and SIRI.
