Reuters: Hot Stocks: STOCKS NEWS THAILAND-CIMB likes retail banks; rate move seen favourable

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STOCKS NEWS THAILAND-CIMB likes retail banks; rate move seen favourable Sep 4th 2012, 04:03 Tue Sep 4, 2012 12:03am EDT Recent economic data and comments from Thailand's central bankers have pointed increasingly towards a loosening monetary trajectory and any rate cuts would be positive to net interest margins of fixed-rate retail lenders, CIMB Research said. The broker has an 'overweight' rating on the banking sector, with its top picks including Thanachart Capital Pcl and Bank of Ayudhya Pcl. Thanachart Capital shares were down 0.7 percent at 34.5 baht and Bank of Ayudhya shares were unchanged at 31 baht. The banking subindex was down 0.1 percent. "The net interest margins of retail-focused banks normally expand in a falling rate environment while the opposite is true for wholesale lenders. The impact also depends on the magnitude of rate moves," CIMB said in a report. The broker expects Thai central bank to keep its policy rate at 3 percent at next three meetings this year. But it believes the next rate cuts by the central bank, if any, will likely be induced by macro deterioration amid the debt crisis in Europe. Fourteen of 16 economists polled by Reuters expected the Bank of Thailand (BOT) to leave its one-day repurchase rate at 3.0 percent when its monetary policy committee (MPC) meets on Wednesday. 1045 (0345 GMT) (Reporting by Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com)

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