Despite the Bank of Thailand’s recent interest rate cut—a move that typically diminishes the attractiveness of commercial bank stocks due to lower net interest income—the Thai banking sector recorded notable gains on Thursday.
The overall stock market remained subdued, with the SET Index declining for a second consecutive session and settling 0.54% lower at 1,250.07 points. Nevertheless, stocks in the financial sector bucked the trend as investors shifted funds toward high-dividend-yielding banks.
This investor preference for bank stocks was observed in spite of the broader market downturn, driven by a renewed search for defensive positions offering strong dividend yields. According to market analysts, Thai banks are now regarded as a safe haven, given their solid dividend prospects and relative stability.
Leading the banking rally, TMBThanachart Bank (TTB) surged 4.52%, offering a dividend yield of 6.69%. Krung Thai Bank (KTB) gained 3.51%, supported by a 5.42% yield. Kasikornbank (KBANK) advanced 3.41%, with a 6.33% yield, while TISCO Financial Group (TISCO) rose 2.78%, boasting a sector-leading yield of 7.18%.
Kiatnakin Phatra Bank (KKP) climbed 2.27% with a yield of 6.22%, Bangkok Bank (BBL) was up 2.11% offering 5.14%, and SCB X (SCB) added 1.49% with the highest yield among peers at 7.79%.
Reflecting these gains, the SET High-Dividend Index advanced by 1.72% on Thursday. This divergence underscores the attractiveness of the banking sector, as nearly all research houses and analysts are currently recommending Thai bank stocks for their strong dividend payments and defensive nature amidst ongoing market challenges.
