2023-09-28 16:16:00
Brokers see bank groups benefiting in full following the MPC raises interest rates. Ready to give more investment weight than the market, cheering for BBL – KTB as a top pick, especially BBL with stronger asset quality than the group. While the group slept in the bank Pointing out that there was little impact because the price dropped a lot. and reflects the news that the dollar has been on the rise for a long time. Cheer for TIDLOR-SAWAD.
On September 27, the Monetary Policy Committee (MPC), Bank of Thailand It was decided to raise the policy interest rate by another 0.25% to 2.50%, which is the highest interest rate in 10 years, stating that the interest rate increase to date is at a level appropriate to the stable economic expansion in the long term.
ASPS praises BBL for its stronger asset quality than the group.
Securities analysis from Asia Plus Securities indicates that the MPC has unanimously decided to raise the policy interest rate by another 0.25% to 2.5%, making the Thai policy interest rate Entering the appropriate point with stable economic expansion in the long term according to the MPC’s view. Such a picture is immediately positive for interbank loans (Interbank), good for BBL, KTB.
Meanwhile, the loan interest side still needs to keep an eye on the response from the group. After the previous round of interest rate increases, no commercial bank has raised the M-RATE. In the case where the M-RATE is increased, it is considered that the MLR charged to large customers It is likely to be raised at a higher rate than the MRR charged to SMEs and small businesses, whose debt repayment potential is still recovering gradually, overall positive for BBL, which has the highest proportion of large loans in the group.
By investing in the banking group, BBL is chosen because of its stronger asset quality than the group and expects to benefit more from interest rate increases than the group. As for small banks, they are at a disadvantage to large banks when interest rates rise. But it has the advantage of a high dividend rate. I still like TISCO, which offers the highest in the group, more than KKP.
In addition, the strategic perspective Under the return of net purchases by foreign investors yesterday combined with an increase in policy interest rates It should create excitement for KBANK, whose price has undergone a correction to be the top of the group of large commercial banks, approximately 15.6% YTD (SET INDEX – 10.3% YTD).
Point out the finance group Stock prices corrected The news has already been reflected.
As for the impact on non-bank groups (Non-Bank) (only MTC, SAWAD, TIDLOR) in the case where banks increase their M-Rate and Bond Yield stands at a high level. Fundamentally, this results in the trend of the group’s cost of funds (COF) increasing in the next period. The structure of 1-year interest-bearing debt at the end of Q2/23 averaged at 38% of interest-bearing debt. (Debt with financial institutions is approximately 21% of debt with interest)
In the past period since the beginning of Thailand’s rising interest rate cycle in the second half of 2022, it was found that the group’s COF for the period Q2/66 was approximately 3.3% VS 3.0% for the period Q2/65, as opposed to the interest rate on loans remaining constant. at (In the case of an increase in interest rates, it will affect only the new contract.) In terms of the quality of the group’s assets It is seen that it is still in the upward cycle of NPLs.
However, the share price of the registered pawn group since Thai Bond yield increased during September 2023, resulting in the share price in the group There was a moderate correction and YTD gave negative returns for all of them. It should reflect some of the above factors.
Give an Outperform recommendation to TIDLOR (FV 2023 @B26) because the stock price YTD decreased 20.3%, more than MTC and SAWAD minus 3.3% and 10.8% YTD respectively, along with the quality of TIDLOR’s assets in terms of Coverage ratio, highest in the group at 266. % while MTC (Neutral) share price has decreased in the past. Makes the price comparable to FV in 2024 at 40 baht (FV in 2022 @B35) has more open upside.
Dao maintains bank sector overweight, recommends BBL-KTB.
Dao Securities (Thailand) Public Company Limited revealed that it has a positive view on commercial banking stocks. In the MPC’s interest rate increase on September 27, it is expected that following this the MPC will maintain interest rates at this level until 2024, having a positive effect on large banks. In order from highest to lowest are BBL, KTB, KBANK and SCB.
By maintaining the weight of the banking group as “More than the market” chooses BBL (Buy/Target 195.00 baht), KTB (Buy/Target 24.00 baht) as Top pick.
However, we look slightly negative for the Finance group because this round of interest rate increases is expected to be the end. As a result, the performance of the Finance group remains as expected, with no significant additional downside.
In this regard, the Finance group still maintains investment weight. “More than the market” from expectations for operating results to have bottomed out in Q3/66 from rising NPL credit costs before starting to improve in Q4/66, with the top pick being SAWAD (buy/ Target 62.00 baht)
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