KGI Keeps Overweight Rating on Thai Banks Despite Increased Provisioning Risks

KGI Securities maintains an “Overweight” rating on Thailand’s banking sectors, but recommends traders to buy on dip as banks are likely to face greater provisioning risks in the near term since commodity prices rise globally.

To boost the economy after the outbreak of COVID-19, the government sought funding to refinance long-term debt and to fund a stimulus budget. As a result, money market activity was busy in January and February. Therefore, KGI preferred to stick with fixed income investment. 

However, changes in global macroeconomic conditions increased downside risks to the domestic economy, and rising commodity prices significantly dampened domestic consumption and GDP growth forecasts in the short run, thus effectively creating more risks for banks.

KGI also holds an overweight rating for BBL (TP: THB160.00), KBANK (TP: THB173.00), KTB (TP: THB17.00), SCB (TP: THB163.00) and TTB (TP: THB1.60).