Despite ongoing uncertainties in the Thai and global economies, bank stocks have regained attention recently. Could this be the moment the market begins to recover and investors start accumulating large-cap stocks again?
. Mongkol Puangpetra, Deputy Managing Director of Investment Strategy at Dao Securities (Thailand), told Thairath Money that the Thai stock market (SET Index) has seen broad buying across several sectors, pushing the index close to 1,600 points, especially in three key themes:
1. Banking sector and high-dividend stocks
2. Sectors benefiting from economic stimulus measures, such as industrial estates like WHA
3. Sectors previously impacted by war, such as airlines, hotels, and power plants, as the market has already priced in these effects
Additionally, investors are gradually buying the market's top 10 large-cap stocks, anticipating that foreign investors typically target these first. The company has adjusted its portfolio focus to CPF, CPN, COM7, GULF, BGRIM, and KBANK from its previous holdings of ADVANC, SCB, and KTB.
Regarding dividend stocks, banks remain attractive for three main reasons: 1) accumulation ahead of Q2/2026 dividends, 2) significant recent price declines, and 3) status as core market stocks with a current dividend yield around 7%. The focus remains on three banks: KBANK, SCB, and KTB.
However, investing in bank stocks requires close monitoring of factors such as interest rates, which affect the net interest margin (NIM) sustainability, and loan quality, particularly non-performing loans (NPLs). The emergence of virtual banks this year is not expected to impact listed banks significantly, as they serve different customer bases.
. Prakit Siriwattanaketu, Managing Director of Mershin Partners Asset Management Company Limited, explained that although bank stocks benefited from rising interest rates over the past 2–3 years, the core lending business still faces growing challenges. Loan growth depends on the Thai economy; if it weakens, existing loans may be affected, leading to increased provisioning and reduced bank profits, potentially lowering dividends paid to shareholders.
Therefore, the key to dividend stock investing is understanding the source of dividends, as past returns do not guarantee future performance. Even good stocks today require ongoing monitoring of business changes.
Prakit personally considers dividend stocks attractive when they come from businesses with strong cash flow and relatively stable revenues, such as PTT or telecommunications companies like ADVANC, which face limited competition. Companies that manage costs effectively can sustain competitive advantages, ensuring steady profit growth and the ability to pay dividends.
Selecting high-dividend stocks involves more than just yield; several factors must be considered. DBS Vickers Securities (Thailand) identifies four key criteria investors should understand and check before buying.
Ultimately, the critical factor is not merely which stocks pay high dividends, but understanding whether those dividends come from strong, sustainable businesses. Long-term investors must do thorough research because, when portfolios decline, only the investors themselves bear the risk.
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