Fitch Upgrades Thailand's Outlook to Stable, Highlights KTB and KBANK as Top Picks on Positive Sentiment

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Summary · why it matters

Asia Plus Securities said Fitch Ratings raised Thailand's credit outlook to Stable from Negative while affirming the rating at BBB+. One of the reasons cited was the stability of the government. As a result, the country's outlook from all three credit rating agencies is now at Stable, which not only reflects confidence in Thailand but also reduces the risk of a downgrade in the next period. For commercial banks whose outlooks Fitch downgraded last year in line with its view on Thailand, namely KTB and TTB, there is a chance their outlooks will be raised to Stable in line with Thailand in the next step, making their share prices likely to receive more positive sentiment than the sector. Political stability is reflected in the passage of two financial laws: the emergency decree authorizing 400 billion baht in borrowing, which passed by a vote of 285 to 141, and the 2027 budget bill, which passed by a vote of 338 to 144. These help ensure money continues to flow into the economy and reduce policy uncertainty. The research team is maintaining a Barbell strategy, choosing KTB followed by KBANK on the commercial banking side, while BBL is a catch-up play on valuation at a PBV of 0.6 times versus 1.2 times for the sector. On the other side is the tourism group, focusing on CENTEL, AOT, and ERW, with upside expected if the war eases.

Impact on assets 7

Financials▲ · 3 stocks
TMBThanachart Bank Public Company Limited
TTB
▲ PositiveMonetaryrelevance

Fitch upgraded Thailand's outlook to Stable, and TTB, whose outlook Fitch downgraded last year in line with Thailand, may see its own outlook raised to Stable, boosting sentiment.

Consumer Discretionary▲ · 2 stocks
Digital Finance & Tokenization▲ · 1 stocks
Bangkok Bank PCL
BBL
▲ PositiveCapitalrelevance

Named as a catch-up play on valuation at 0.6x PBV versus 1.2x for the sector, a valuation/analyst call.

Industrials▲ · 1 stocks
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