The Bank of Thailand's surprise interest rate cut should benefit stocks in the fields of leasing, real estate, retail, hospitals, and those with high debt, while banking stocks are out of favour, say analysts.
Rakpong Chaisuparakul, senior vice-president at KGI Securities (Thailand), said the policy rate cut of 25 basis points on Wednesday offers positive sentiment to non-bank finance companies as their cost of funds dips and the prospects for non-performing loans stabilises.
He said property stocks are likely to benefit after commercial banks trim their lending rates in response to the policy rate move, in addition to offering decent interim dividend yields.
Asia Plus Securities (ASPS) predicted finance stocks would benefit from the rate cut, with the top picks Srisawad Corporation (SAWAD), Tisco Financial Group (TISCO), Muangthai Capital (MTC) and Ngern Tid Lor (TIDLOR).
Other groups recommended dividend stocks, such as Intouch Holdings (INTUCH), Central Pattana (CPN), Land and Houses (LH), Supalai (SPALI), Sansiri (SIRI), SC Asset Corporation (SC) and AP Thailand (AP).
In addition, a weaker baht should help Airports of Thailand (AOT), i-Tail Corporation (ITC), Erawan Group (ERW), Thai Union Group (TU), Central Plaza Hotel (CENTEL) and Charoen Pokphand Foods (CPF), noted ASPS.
"Following the rate cut, the Stock Exchange of Thailand [SET] index recovered by 24.75 points or around 2% to 1,231.14 points, with a trading value of 62 billion baht, the highest single-day trading value this year," noted the brokerage.
"This bodes well for the recovery of the Thai bourse, which is the worst performer globally, falling 12.1% so far this year."
Daol Securities (Thailand) said the rate cut is a negative factor for banking stocks because interest income will likely decrease immediately, especially for large banks.
Net profits will likely be affected for Bangkok Bank (BBL), Krungthai Bank (KTB), Kasikornbank (KBANK) and Siam Commercial Bank (SCB), according to the brokerage.
However, smaller Kiatnakin Phatra Bank (KKP) and Tisco Bank should benefit from the cut, noted Daol.
"If policy rate is cut by another 25 basis points, there will be a downside to the banking sector's net profit estimates by about 3%," noted the brokerage in a research note.
"However, Daol still overweights the banking sector based on its overall strong performance, with our stocks pick KTB and BBL."
At the next Monetary Policy Committee meeting on April 30, Daol expects the central bank to adjust the GDP growth forecast to slightly more than 2.5%, falling from 2.9% given the decline in the manufacturing sector, rising competition from imported products, and increasing risks from highly uncertain trade policies under US President Donald Trump.
Krungsri Securities assessed the first rate cut of 2025 as positive for the SET index by around 40 points, supporting several sectors including high-yield stocks such as Advanced Info Service (ADVANC) and high-debt companies including Minor International (MINT) and CP All (CPALL).
