Banking stocks set to cash in as BoT preps for another cut

Stock market sleuths are buzzing as banking stocks look set to surge with global interest rates on the slide. All eyes are on the Bank of Thailand (BoT), expected to slash its policy rate again this December. Last week’s unexpected chop of 25 basis points to 2.25% marked the first cut in more than four years, echoing similar moves by Indonesia and the Philippines.

The rate-cut trend is spreading like wildfire, with the European Central Bank trimming rates thrice by a total of 75 bps, the BoT easing by 25 bps, and the US Federal Reserve dropping a cool 50 bps. Analysts predict more cuts from developed nations aiming to kickstart their flagging economies.

Asia Plus Securities (ASPS) anticipates rates will settle at 3.5% in the US, 2% in the eurozone, 3.75% in the UK, and 2% in Thailand by the end of 2025. Meanwhile, Bualuang Securities (BLS) is bullish on banking stocks after last week’s rate chop, eyeing Bangkok Bank (BBL), Kasikornbank (KBANK), and Krungthai Bank (KTB) as top picks as fresh investment projects and quality loans bubble up.

ASPS advises punters to snap up stocks set to cash in on the rate dip. First in line are those primed for higher income, from brokerage stars like KGI Securities and Maybank to retail powerhouses CP Axtra and Berli Jucker, and real estate giants AP Thailand and Supalai.

Next, look to sectors set to see financial costs dive, including petrochemical kings Indorama Ventures and PTT Global Chemical, finance firms Muangthai Capital and Ngern Tod Lor, and contractors Ch. Karnchang and Sino Thai Engineering and Construction.

High-dividend yielders like PTT, Tisco Financial Group, and Land and Houses are also packing potential.

Krungsri Capital Securities (KCS) chimed in, predicting these cuts will rev the economy, ease consumer debt, and revamp banks’ loan books. The recent rate slice happened against a backdrop of Middle East tensions, a gloomy Chinese economy, and the volatile US-China trade war, noted KCS.

Their hot takeover tips in these low-rate times include hire-purchase play MTC, powerhouses Gulf Energy Development and Global Power Synergy, and hefty debt players like True Corporation. Real estate firms and high-yield stocks are also in the spotlight for savvy investors.