Singapore, Hong Kong investors divided over Thailand banks

Asset quality deterioration is a key concern.

Maybank Kim Eng recently met with more than 30 investors during a marketing trip in Singapore and Hong Kong, and the investors were divided on their opinions with regard to Thailand banks. According to a research note from Maybank Kim Eng, most Singapore investors are overweight Thai banks as they do not see the short term negative catalysts.

Meanwhile, Hong Kong investors are underweight and were surprised with the strong performance of the banking sector.

The report noted that the key concern on the sector is the asset quality deterioration which may impact the banks’ earnings and share price.

In Maybank Kim Eng's own view, meanwhile, it noted that it prefers large banks to small banks.

This was mainly due to better asset quality; more bullish on NIM outlook; strong network coverage to gain deposits; and diversified loan portfolio and revenue structure.