Interest Rate Hike Puts Spotlight on Stocks in Banking, Power and Insurance Sectors

Thailand’s central bank will hold its MPC meeting on Wednesday (September 28), with analysts expecting a 0.5% increase in interest rates — particularly since the THB fell below 37.6 per US$.

According to Asia Plus Securities, Thailand’s economy is rebounding since the country reopened to tourists and the emergency decree was lifted, resulting in lower risk. However, investors should keep an eye on the MPC meeting this Wednesday on whether the interest rate will be raised by 0.5% (rather than the 0.25% previously projected); a hike larger than 0.25% will have a negative impact on the SET Index.

If the interest rate is hiked by 0.25%, negative sentiment will subside and this should be a good accumulation point. A 0.25% hike is projected at the next meeting.

SET Index is expected to outperform global markets, especially stocks in these themes:

1) Anti-commodity plays: GPSC, BGRIM, CBG

2) Stocks with good immunity to interest rate hikes: BBL, BLA, TLI

3) Stocks benefiting from Thailand’s economic recovery: ERW, AOT, BEM, PLANB, OR