Sawasdee – September 16, 2024

Fund flow still supports
Market today
Although the SET is resting, a weak US dollar on expectations of a rate cut by the Fed at its meeting on Sep 17-18 has strengthened the baht and fund inflow will support the index. Resistances are at previous highs of 1430 and 1435. A break through will be good sign overall. Supports are between 1415-1420, which are expected to stand.
Today’s highlights
• The National Bureau of Statistics reported China's retail sales and industrial production in August grew 2.1% and 4.5%, lower than expected, reflecting an imbalance in the economy with supply expanding faster than consumption. • Trump reportedly survived the second assassination attempt in two months at his private golf course in Florida. He was unharmed in the incident. • The Ministry of Finance is ready to distribute Bt10,000 in cash through a digital wallet program to vulnerable citizens. The funds will be transferred to PromptPay accounts on September 25-27 and 30. • The Department of Energy Business reports average fuel consumption in 7M24 was 156.5 million liters/day, up 0.2%YoY. Aviation fuel and diesel usage increased by 16.3% and 3.3%, while gasoline consumption decreased by 1.4% due to increased adoption of EVs. • The Secretary of Finance said it plans to set up an infrastructure fund to buy back metro train projects, aiming to keep fares at Bt20 throughout the line. The fund is expected to raise about Bt500bn for 6 projects by selling investment units to the public or institutions. • The FTI estimates this year's floods are bringing economic damage of Bt25-27bn in the upper northern region. The PM has scheduled a meeting today to address the flood problem, as Nong Khai faces its worst flooding in 16 years. • The Thai Hotels Association proposed 5 measures to assist hotel operators, including promoting weekday tourism, meetings and seminars, a "We Travel Together" campaign during the low season, expense assistance and tax deductions.
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 seen to be resting and has limited upside, but the index may be supported by hopes of an interest rate cut by the Fed, which may 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 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) strong financial position, with profit expected to grow in 2025 - KTB, BBL, BCP, ADVANC and HMPRO.
Daily top picks
GULF: Profit is expected to continue to grow over the rest of the year, supported by new capacity from GDP unit 4 (662.5MW, COD in October 2024) and many solar projects under development. There is also a positive from a merger between GULF and INTUCH, and valuation is attractive, trading at PER of 33x (-1.0 SD). It also benefits from declining bond yield. AMATA: 2024 profit is expected to grow 27.3%, with 2H24 backlog estimates raised after it reached a new high with land sales of more than 2,000 rai from around 1,800-2,000 rai. As an industrial estate player, it benefits from manufacturing relocations as trade wars intensify.
Today’s reports
No InnovestX Equity report today

Fund flow still supports

Market today

Although the SET is resting, a weak US dollar on expectations of a rate cut by the Fed at its meeting on Sep 17-18 has strengthened the baht and fund inflow will support the index. Resistances are at previous highs of 1430 and 1435. A break through will be good sign overall. Supports are between 1415-1420, which are expected to stand.

Today’s highlights

• The National Bureau of Statistics reported China's retail sales and industrial production in August grew 2.1% and 4.5%, lower than expected, reflecting an imbalance in the economy with supply expanding faster than consumption.
• Trump reportedly survived the second assassination attempt in two months at his private golf course in Florida. He was unharmed in the incident.
• The Ministry of Finance is ready to distribute Bt10,000 in cash through a digital wallet program to vulnerable citizens. The funds will be transferred to PromptPay accounts on September 25-27 and 30.
• The Department of Energy Business reports average fuel consumption in 7M24 was 156.5 million liters/day, up 0.2%YoY. Aviation fuel and diesel usage increased by 16.3% and 3.3%, while gasoline consumption decreased by 1.4% due to increased adoption of EVs.
• The Secretary of Finance said it plans to set up an infrastructure fund to buy back metro train projects, aiming to keep fares at Bt20 throughout the line. The fund is expected to raise about Bt500bn for 6 projects by selling investment units to the public or institutions.
• The FTI estimates this year's floods are bringing economic damage of Bt25-27bn in the upper northern region. The PM has scheduled a meeting today to address the flood problem, as Nong Khai faces its worst flooding in 16 years.
• The Thai Hotels Association proposed 5 measures to assist hotel operators, including promoting weekday tourism, meetings and seminars, a "We Travel Together" campaign during the low season, expense assistance and tax deductions.

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 seen to be resting and has limited upside, but the index may be supported by hopes of an interest rate cut by the Fed, which may 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 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) strong financial position, with profit expected to grow in 2025 - KTB, BBL, BCP, ADVANC and HMPRO.

Daily top picks

GULF: Profit is expected to continue to grow over the rest of the year, supported by new capacity from GDP unit 4 (662.5MW, COD in October 2024) and many solar projects under development. There is also a positive from a merger between GULF and INTUCH, and valuation is attractive, trading at PER of 33x (-1.0 SD). It also benefits from declining bond yield.

AMATA: 2024 profit is expected to grow 27.3%, with 2H24 backlog estimates raised after it reached a new high with land sales of more than 2,000 rai from around 1,800-2,000 rai. As an industrial estate player, it benefits from manufacturing relocations as trade wars intensify.

Today’s reports

No InnovestX Equity report today