Fitch Upgrades Thailand's Outlook to Stable, Bank Stocks Rise Across the Board

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Summary · why it matters

Fitch Ratings has revised Thailand's credit rating outlook from Negative to Stable while affirming the rating at BBB+, an investment grade level. As a result, bank stocks rose across the board at 3:00 p.m., led by KBANK up 2.77% to 260.00 baht on trading value of 3.83 billion baht, followed by BAY up 2.61% to 39.25 baht, SCB up 2.30% to 156.00 baht, CREDIT up 1.32% to 23.00 baht, BBL up 1.29% to 196.00 baht, KTB up 1.11% to 45.50 baht, and TISCO up 0.39% to 128.00 baht. TISCO Securities noted four main reasons behind the outlook upgrade: reduced political risk following the election and the formation of a stable government, continuity of economic policy, an improving public debt outlook expected to hold below 63% of GDP in fiscal year 2028, better-than-expected GDP growth driven by investment in AI and data centers, and a strong external position supported by expectations of a return to a current account surplus of 1.5% next year. Based on a study of market movements after Moody's last upgraded Thailand's outlook on April 21 this year, bank stocks delivered positive returns and outperformed the SET across all timeframes, with SETBANK at +1.16%, +1.22%, +4.56%, and +28.56% versus the SET at -0.11%, +0.56%, +3.43%, and +11.55% respectively. The recommended strategic stocks are KBANK with a base target of 290 baht, KTB at 50 baht, and TTB at 3.3 baht. Meanwhile, the yield on 10-year Thai government bonds fell from 2.38% to 2.26%, a decline of 12 basis points, which is positive for interest-rate-sensitive stocks. Preferred picks are MTC at 55 baht, TIDLOR at 25 baht, and power plant stocks such as GULF at 82 baht and EGCO at 144 baht.

Impact on assets 13

Financials▲ · 8 stocks
Bank of Ayudhya PCL
BAY
▲ PositiveMonetaryrelevance

BAY rose 2.61% as Fitch upgraded Thailand's outlook to Stable and 10-year bond yields fell 12bp, positive for rate-sensitive bank stocks.

Thai Credit Pcl
CREDIT
▲ PositiveMonetaryrelevance

CREDIT gained 1.32% as the Fitch outlook upgrade and lower bond yields lifted Thai bank stocks broadly.

Kasikornbank Public Company Limited
KBANK
▲ PositiveMonetaryrelevance

Fitch upgraded Thailand's outlook to Stable and KBANK rose 2.77%, with the bank named as a recommended strategic stock with a 290 baht target.

Muangthai Capital Public Company Limited
MTC
▲ PositiveMonetaryrelevance

Falling 10-year Thai government bond yields (2.38% to 2.26%) are positive for rate-sensitive stocks, with MTC named as a preferred pick at 55 baht.

TMBThanachart Bank Public Company Limited
TTB
▲ PositiveMonetaryrelevance

TTB is named among recommended strategic bank stocks (target 3.3 baht) benefiting from the Fitch outlook upgrade and lower Thai government bond yields.

Digital Finance & Tokenization▲ · 2 stocks
Bangkok Bank PCL
BBL
▲ PositiveMonetaryrelevance

BBL rose 1.29% amid the sovereign outlook upgrade and falling Thai government bond yields benefiting banks.

SCB X Public Company Limited
SCB
▲ PositiveMonetaryrelevance

SCB rose 2.30% as Thai bank stocks gained across the board after Fitch revised Thailand's outlook to Stable.

Energy Transition & Power Demand▲ · 2 stocks
Others▲ · 1 stocks
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