Sawasdee - September 9, 2024

SET Index Sentiment: The SET index is expected to slow down due to negative sentiment from the US market and a pause in the baht’s appreciation, with support levels at 1414 and 1404 points, and resistance at 1430 points.
Today’s Highlights: US non-farm payrolls for August increased by 142,000, below expectations. The US Treasury Secretary remains confident in the economy. The Thai Prime Minister is preparing to announce government policies, and OPEC+ has postponed production increases.
Investment Strategy: Despite good momentum, caution is advised for short-term profit-taking. Recommended “Selective Buy” themes include stocks with technical reversal signals, those benefiting from lower interest rates, and those expected to gain from new government stimulus measures.

Slowdown to reduce heat
Market today
The SET is expected to be dimmed by the drop in US markets on recession concerns as well as the appreciating baht that will slow foreign buys in the short term. The index is expected to slow down to reduce heat. Resistance is at 1430, while supports are at 1414 and 1404 and are expected to stand, as overall the index is expected to continue to climb.
Today’s highlights
• US Department of Labor reported nonfarm payroll in August increased by 142,000 positions, lower than market expectations. It also revised down July employment figures to 89,000 positions from the previously reported 114,000. • The US Treasury Secretary remains confident the economy is still strong, despite the slowing labor market. It expects a soft landing and does not anticipate large-scale layoffs. • The Prime Minister has ordered ministers to prepare for the government policy statement on September 12-13. They plan to continue policies from the previous government, evaluate performance in 3 months, and focus on stimulating the economy to help vulnerable groups, SMEs, and restructure public debt. • The PBOC did not increase gold reserves for the fourth month in August, remaining at 72.8mn oz, as gold prices reached record highs. • OPEC+ has reviewed its production increase plan and decided to postpone it by 2 months from October. It may consider extending the delay or further reducing production, depending on the situation. • The Revenue Department is preparing to amend laws for foreign investment, aiming to collect a 15% corporate tax from large multinational corporations and tax individuals with foreign income even if not repatriated to Thailand. They expect to meet the FY2024 budget target of Bt2.28tn and Bt2.37tn (+4.2%) in FY2025. • The Ministry of Labor confirms plans to announce a minimum wage increase to Bt400/day nationwide on October 1. It is considering relief measures for businesses, such as temporary reductions in employer contributions and reviving effective measures from the Yingluck administration.
Strategy today
Although in the short term the SET still has good momentum as the political skies have cleared and new stimulus is expected in 3Q-4Q24, in the past month the index has risen by 10%MoM. Hence, be cautious of profit-taking around resistances of 1450-1460. Funds are expected to switch to flow out from banks, financial firms and ICT, and flow into petrochemicals, utilities, property development and healthcare. Externally, there is still the risk of recession, which is slowing inflation and is expected to lead to an interest rate cut by the Fed and ECB. Our strategy is "selective buy".
Trading today
Although the SET still has good momentum for the short term, be wary of profit-taking after the leap in the index over the past month. We recommend "Selective Buy" with four main themes: 1) Investors who want to speculate in stocks that have a turnaround signal, and attractive valuation, trading at PER and PBV lower than -1SD - CPN, GPSC and TFFIF. 2) Investors who want to speculate in stocks expected to benefit when the interest rate cycle starts down - leasing (MTC), commerce (CPALL and CPAXT), utilities (GULF) and REITs (LHHOTEL and DIF). 3) Stocks expected to benefit from short-term stimulus packages from the new government in September, particularly those related to consumer staples - CPALL, CPAXT, BJC, TNP and CBG. 4) Stocks expected to benefit from the Vayupak Fund. We highlight stocks in SET100 that have: 1) good dividend yield, minimum of 3.5%, 2) SETESG Ratings between A and AAA and 5-star CG and 3) strong financial position, with profit expected to grow in 2025 - KTB, BBL, BCP, ADVANC and HMPRO.
Daily top picks
BDMS: Our top pick in the Healthcare sector. Profit is expected to strengthen in 2H24 from 1H24, with core profit growing YoY on higher revenue and QoQ on entry into high season in 3Q24. 2024 core profit is expected to grow 13% to Bt16bn and valuation is attractive, trading at 2024F PER of 27x (-2SD). Recommend buy for trading at not higher than Bt29.00/share. GPSC: The company benefits from lower bond yield and natural gas cost. 2024 core profit is expected to be B54.58bn, growing 33.8%, with growth continuing in 2025 at 16.3%. There are also catalysts from profit share from RE projects overseas, with higher capacity in India and Taiwan and growth the second round of auctions for RE. Recommend buy for trading at not higher than Bt45.75/share.
Today’s reports
Utilities - Positive on 2nd round of renewable bidding