Bangkok Bank Public Company Limited (BBL.BK) $BBL Given Buy Rating By Shayne Heffernan
Big drop in bank stock prices walloped SET Index yesterday – Buy on Dips
Bangkok Bank
Ticker: BBL.BK
Price: THB 106.50
The stock exchange of Thailand Index on Monday (June 22) fell by 18 points because of a 6.37 per cent drop in the price of bank stocks, experts said.
Investors sold bank stocks after the Bank of Thailand (BOT) ordered banks to hold off paying interim dividends and buying back shares to strengthen their capital to handle risks in the future.
Also, bank stocks were under pressure from the central bank’s measures to cut the interest rates charged for credit cards, personal credit and hire purchases to help people struggling with debt thanks to the Covid-19 crisis.
These factors caused the price of bank stocks to drop 6.37 per cent, while the SET Index fell by 18 points to 1,352 at yesterday’s close. Foreign and institutional investors made net sales in stocks of Bt3.106 billion and Bt3.695 billion, respectively.
Bangkok Bank’s stock dropped the most, by 9.09 per cent, followed by siam commercial bank (7.44 per cent), Kasikorn Bank (6.79 per cent), Tisco financial group (5.78 per cent), and Kiatnakin Bank (5.68 per cent).
Shayne Heffernan, CEO and Founder of Heffx said BOT’s order caused negative sentiment for bank stocks, although the banks’ capital adequacy ratio is currently 19.6 per cent, higher than the central bank’s minimum criteria of 12 per cent.“
The central bank’s announcement showed that the Covid-19 impact on the economy and asset quality may be worse than they expected,” he said. “BOT’s intervention always lends negative sentiment to bank stocks.”
Business Summary
Bangkok Bank Public Company Limited is a Thailand-based commercial bank. The Company serves retail customers, small and medium size enterprises (SMEs) and corporate customers.
Its products and services include cash management, project financing, custodial services, syndicated loan management services, trade finance advice, home loans, foreign currency services, cash advances, money transfer, wealth and asset management, currency exchange services, electronic business services and credit card services.
The Company operates branches throughout Thailand and overseas, including China, Hong Kong, the United States, the United Kingdom, Singapore, Indonesia, Laos, Vietnam and the Philippines.
Shayne Heffernan Trade Idea
“Our current price target of Bangkok Bank will come in around THB 144.42 which will give the stock a price an upside of +36.25%.”
Price Performance
Relative Valuation
Technical Indicators
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 113.55.
The projected upper bound is: 118.57.
The projected lower bound is: 94.49.
The projected closing price is: 106.53.
Candlesticks
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 23 black candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
Momentum Indicators
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 14.4928. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 4 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 43.66. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 8 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -145.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 10 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 5 period(s) ago.
Rex Takasugi – TD Profile
BANGKOK BANK closed up 1.500 at 106.500. Volume was 16% below average (neutral) and Bollinger Bands were 2% narrower than normal.
Open High Low Close Volume 106.000 108.000 106.000 106.500 11,134,100
Technical Outlook Short Term: Oversold Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 116.25 107.76 141.15 Volatility: 73 68 54 Volume: 15,649,720 14,773,098 10,616,717
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
BANGKOK BANK is currently 24.5% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term.
Our volume indicators reflect volume flowing into and out of BBL.BK at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BBL.BK and have had this outlook for the last 15 periods.
We invite you to try out any MetaStock product (including Add-Ons) for 30 days. If you are not convinced that it helps you make more accurate, educated trading decisions, just return it to us within the 30 days for a refund of the purchase price. It’s that simple. This policy does not apply to subscriptions.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of the Thailand Stock Market.
Trading and investing carries a HIGH LEVEL OF RISK, you could lose some or all of your investment. Trading commodities or any other financial instrument may not be suitable for all traders. Before deciding to trade, you should carefully consider your investment objectives, level of experience, and risk appetite. We accept no liability for any losses or damages you may incur—this means that you alone are responsible for your actions in any trading or investing activities.
Sources:
Bangkok Bank Company Website
Thomson Reuters Metastock and Eikon financial tools
