The Most Beneficial Sectors from MPC’s Interest Rate Cut!
Asia Plus expects stocks in the leasing business, small commercial banks and real estate business would benefit the most from the rate cut.
Asia Plus Securities has made an analysis that recommended the stocks that would be benefited from the policy rate cut from the Monetary Policy Committee on November 6, 2019, lowering the rate from 1.50% to 1.25%.
In the analysis, Asia Plus expects stocks in the leasing business, small commercial banks and real estate business would benefit the most from the rate cut.
Leasing Business
The majority of companies in the leasing business has a fixed loan rate (except IFS) while the cost of companies’ loan mostly is debenture or a loan from commercial banks. In this regard, the cost would decrease following the rate cut. Thus, Asia Plus expects ASK, SAWAD and THANI to be benefited from the policy while adjusting MTC’s fair value in 2020 to ฿71.00/share.
Small Commercial Banks
Small commercial banks have a fixed loan rate while partly having a floating rate which could be a positive factor to the NIM. Asia Plus gives fair value for TISCO at ฿91.00/share, TCAP at ฿63.00/share and KKP at ฿79.50/share.
Real Estate Business
The lower interest rate would stimulate consumers for more subscription while receiving positive sentiment from the stimulus measurement for housing transfer and mortgage fees from 2% and 1%, respectively, to 0.01%. Asia Plus gives the fair value of LH at ฿12.30/share, PSH at ฿18.50/share and SPALI at ฿19.50/share.
High Dividend Yield
More importantly, Asia Plus sees the possibility that after the rate cut, investors would turn from bonds to invest in high dividend-yield stocks such as LH and KKP.