BBL Falls 1.2% in Concerns of FOL Limit, Analysts Remain Positive on the Fundamental

The share price of BBL closed at ฿122.50/share, fell ฿1.50/share or 1.21% with a trading value of 738 million baht. A drop in share price might be due to the announcement from ThaiNVDR yesterday, stating that the Foreign Ownership Limit (FOL) in BBL was at its full limit of 30%.

 

Thai NVDR Co., Ltd. (Thai NVDR) would like to inform the procedure as approved by the Bank of Thailand (BOT) regarding the holding of shares of Bangkok Bank Public Company Limited (BBL).

 

From December 24, 2020 onwards, if Thai NVDR holds shares of BBL more than 25 percent of the paid-up capital, Thai NVDR still has the rights to hold or maintain those shares. Then, if the shares are sold, Thai NVDR shall have the rights to hold or maintain those shares equal to the amount of remaining shares until Thai NVDR is able to reduce the ratio of holding shares of BBL at no more than 25 percent of the paid-up capital.

 

Asia Plus Securities (ASPS) stated that the measure would not impact BBL’s fundamental factors. However, the fund inflow might slow down and flow into BBL-F instead with higher Foreign Queue even with the FOL is at the limit. Moreover, BBL is not included in the MSCI, making the impact less concerning.

Fundamentally, ASPS still preferred BBL due to only 5% of its borrowers being from the government stimulus measures, while the company already set high ECL in the past. The current P/BV is at 0.52x along with a dividend yield at 2%. Thus, the security company recommended “Buy on Weakness” at a target price of ฿127.00/share.

 

Capital Nomura Securities (CNS) stated that the move will pose as a short-negative sentiment to BBL as Foreign Ownership Limit is at its max of 30%, while the Thai NVDR holds 23.73% with a limit a 25% stake, which might cause a short sell due to a negative sentiment of weighing down from Foriegn Investors.