Concern on floods

Today's highlights
• Russia’s Novoshakhtinsk refinery, with a capacity of 110,000 bpd, ceased operations following damage from a Ukrainian attack last Friday. This exacerbates domestic refined product shortages in Russia and further tightens global refined product supply. Near-term positive for refiners (TOP, SPRC).

• US and China agreed to extend their trade truce through January 2027 and reduce tariffs on general goods by US$30bn. However, technology restrictions remain in place for advanced chip exports and rare earths, while issues regarding Taiwan and Iran remain unresolved. Short-term positive sentiment for trade and investment, but unlikely to alter long-term competitive dynamics.

• Bangkok and surrounding provinces faced cumulative rainfall of 300 mm, triggering flash floods. As rainfall is expected to ease, the impact on tourism, healthcare, and food sectors should be limited, presenting an accumulation opportunity. Meanwhile, post-flood restoration demand is expected to rise, benefiting home improvement retailers (HMPRO, GLOBAL, DCC).

• TPSO reported Thailand's August 2026 export value surged 24% YoY, reaching a 56-month high and expanding for the 26th consecutive month, driven by infrastructure investments and AI-related industries. This brought 8M26 export growth to 19% YoY. Positive for electronic components (DELTA, HANA, KCE).

• IEAT revealed industrial estate land sales and reservations exceeded 6,000 rai in 9M26, driven by Data Centers, electronic, agriculture, and food & beverage investors from Europe, China, South Korea, and Japan. Over 90% of these investors are expected to proceed once regulators finalize utility and electricity standards. Positive for industrial estates (WHA, AMATA).

Strategy today
In the near term, the SET is expected to swing volatilely, pressured by the Fed's hawkish stance supporting sustained high bond yields and stalled US-Iran negotiations risking oil price and inflation increases. Domestically, negative sentiment from flooding concerns impacting economic activity, while monitoring the Constitutional Court ruling on Sep 28 determining whether the past election is void. A political vacuum would hurt investor confidence, but passing smoothly would receive positive market response releasing concerns. Additionally, volatility from 3Q26 window dressing closure expected. The investment strategy therefore recommends "Selective Buy".

Trading today
The SET is expected to be volatile, pressured by Fed hawkish stance supporting high bond yields and US-Iran tensions risking oil and inflation, while domestically monitor flooding situation and Constitutional Court ruling, plus volatility from 3Q26 window dressing closure. The investment strategy therefore recommends "Selective Buy" emphasizing "Buy on Dip" through 4 trading themes with specific positive factors as follows:

1. Political Relief & Infrastructure Play — Expected to respond positively if the Constitutional Court rules the election not void. Includes contractors and construction materials (STECON, CK, SCC) and industrial estates (WHA, AMATA). If verdict is positive, let profits run, but if reversed to void, immediately set stop-loss discipline.

2. Flood Defensive & Recovery Plays — Benefits from flooding starting with emergency essential goods buying (CPALL, BJC, CRC) continuing to post-flood housing repair and infrastructure recovery demand (HMPRO, GLOBAL for retail; DCC for construction materials).

3. Window Dressing Play — Expected to benefit from 3Q26 window dressing closure, focusing on SET50 stocks with lower price appreciation than market (lower %QTD Return than SET50) but solid fundamentals (DELTA, GULF, AOT, TRUE, CPN, BDMS, BH). Recommend setting exit points and watch for profit-taking in early October.

4. Tourism & Mega-Event Play — Expected to benefit from entering 4Q26 high tourism season supported by China's Golden Week (Oct 1-7), global events like World Bank-IMF meetings (Oct), including tourism stocks (ERW, CENTEL, AOT) and retail stocks (CPALL, CPN, CRC).

Daily Top Picks
CENTEL: Expected to see limited impact from flooding if the situation is not prolonged, with future catalysts from the upcoming Chinese Golden Week and the tourism high season. Meanwhile, RevPAR is showing signs of recovery in 2H26. 2026F normal profit is projected to grow 18% to Bt2.3bn. Short-term TP is Bt44.50.

SPRC: Short-term catalyst from Ukraine's attack on Russia's Novoshakhtinsk refinery, exacerbating already tight global refined product supply. Meanwhile, President Trump's rejection of Iran's proposal to open the Strait of Hormuz drove a rebound in oil prices from the previous week and suggests prolonged geopolitical tensions. Short-term TP is Bt14.70.