Analysts Pick TISCO-KKP for Div Yield amid Rumors of Thai Banks’ Illicit Funds

The banking sector closed lower yesterday after 4 major Thai commercial banks were reportedly involved in suspicious financial transactions according to the ‘FinCEN’’s files that showed global banks’ illicit funding movements over a period of nearly two decades. The Anti-Money Laundering Office (Amlo) reiterated that there was no cause for panic as the office is currently investigating, citing the documents was not from the US Intelligence Agency.

 

Analysts suggest avoiding stocks that are engaging in the said scandal, meanwhile recommend to invest in TISCO and KKP due to a high dividend payment charge after passing the stress test this October.  

Asia Plus Securities (ASP) stated that this issue has pressured the share price of banking sector stocks globally; HSBC dropped 5.3%, JPMorgan decreased 3%, Standard Chartered plunged 5.8% and Deutsche Bank slumped 8.8%.

 

KTB Securities (Thailand) (KTBST) assessed that the report based on leaked suspicious activity reports sent negative sentiment to the banking sector. The report claimed that the 4 Thai banks’ record covered combined amounts of 1.5 billion baht in suspicious financial transactions, including BBL (876 million baht), KTB (516 million baht), EXIM Bank (79 million baht) and KBANK (25 million baht).

 

However, KTBST still selected BBL as a top pick stock and recommend buy at a target price of ฿120/share.

 

Land and Houses Securities (LHS) also had the same view as other 2 securities that the FinCen files reported overweight on stocks in the banking sector particularly the banks that are involved in “allegedly illicit funds”, therefore advised to avoid short-term investment. Meanwhile recommend buy TISCO at a target price of ฿86/share and KKP at a target price of ฿52/share.