Market today |
Fund inflows are expected to continue to support the SET as the US dollar weakens - strengthening the baht - ahead of an expected rate cut by the Fed at its meeting on Sep 17-18, plus positive sentiment from the first day of selling Vayupak fund units. The index is expected to be pushed up beyond its earlier high of 1438. Resistance is between 1445-1450, while support is between 1420-1430. |
Today’s highlights |
• The Ministry of Finance will propose a Bt10,000 stimulus payment to 14.5mn citizens in the first phase, to be distributed from September 25-27 and September 30. It also plans to set up an IFF mutual fund to buy back rail concessions for Bt300bn, with details expected to be finalized this year.
• The Ministry of Transport is preparing to propose three investment projects valued at over Bt100bn for cabinet consideration. It is also proposing an Bt800mn budget allocation to pay contractors for ongoing construction work on Rama 2 Rd.
• Flooding is impacting lives, property, and economies worldwide, affecting daily life, businesses, and logistics systems.
• The Minister of Tourism and Sports aims to drive Thai tourism with a revenue target of Bt3bn. He expects to meet this goal, backed by a steady flow of stimulus over the rest of the year.
• The Minister of Commerce plans to meet with the BoT governor to talk about three items: reducing interest rates, addressing the strong baht and increasing liquidity in the economic system.
• The Prime Minister is preparing for an urgent meeting with the flood committee, ordering preparations for the lower northeastern region to handle the situation. Free water and electricity for September have been approved for affected areas, along with a Bt3bn emergency budget for flood relief.
• Apple's stock price fell nearly 3% after analysts reported that iPhone 16 Series launch sales of about 37mn units was lower than iPhone 15 Series sales last year, indicating weaker demand than expected. This may be due to delays in introducing AI features. |
Strategy today |
In the short term the SET is resting and has limited upside. There may be support from hopes of an interest rate cut by the Fed, which will support short-term investment in risky assets. However, be cautious on the difference in the BoJ's monetary policy, which will bring yen carry trade and trigger selling of risky assets around the world while EM markets are uncertain. Domestically, the capital market will see fund flows into defensive stocks such as Commerce, Healthcare and Utilities. Our strategy is "selective buy". |
Trading today |
The SET is resting and has limited upside, but may be supported by hopes of an interest rate cut by the Fed, which would support investment in risky assets. We recommend "Selective Buy" with three main themes:
1) Investors who want to speculate in stocks that have signs of a turnaround and an attractive valuation, trading at PER and PBV lower than -1SD - AP, GPSC, MTC and AMATA.
2) Investors who want to speculate in stocks expected to benefit when the interest rate cycle starts down - Leasing (MTC), Property Development (AP), Commerce (CPALL and CPAXT), Utilities (GULF) and REITs (LHHOTEL and DIF).
3) Stocks expected to benefit from the Vayupak Fund. We highlight stocks in SET100 that have: 1) good dividend yield of at least 3.5%, 2) SET ESG Ratings between A and AAA and 5-star CG and 3) a strong financial position, with profit expected to grow in 2025 - KTB, BBL, BCP, ADVANC and HMPRO. |
Daily top picks |
CPALL: 2H24 profit is expected to grow YoY, leading the Commerce sector. 3Q24 profit is expected to grow YoY and QoQ, supported by higher sales and margin at CVS and CPAXT. 4Q24 - high season - is expected to be the best quarter in 2024 and valuation is attractive, trading at 2024F PER of 25x (-2SD).
GPSC: It benefits from lower natural gas cost. 2024 core profit is expected to be Bt4.58bn, growing 33.8%, and expected to grow by 16.3% in 2025. There is also a catalyst from greater contribution from overseas renewable energy business in India and Taiwan. |
Today’s reports |
No InnovestX Equity report today |
