Market today |
Initially, sentiment is expected to be aided by good US economic figures that have eased fears of a recession. However, the index has limited upside with resistances 1465-1470, while supports are at 1450 and 1440. A fall below support would be a bad sign. Watch the US PCE data tonight. |
Today’s highlights |
• The MoF is preparing tax measures that include a carbon dioxide tax; these are nearly finalized and expected to be sent to the cabinet soon for approval and implementation in 2024.
• The UTCC predicts Bt45bn in spending during this year's vegetarian festival, up 1%. It also expects the government's Bt10,000 handout to generate Bt450bn in economic activity, potentially boosting GDP growth to 2.8% this year.
• The Chinese government announced cash handouts to 4.74mn impoverished citizens, totalling 155bn yuan (about 32,000 yuan per person), ahead of China's National Day on October 1st.
• The Office of Industrial Economics revised its MPI forecast for this year to -1% to 0%, down from 0% to 1% previously. The industrial GDP forecast was also lowered to -0.5% to 0.5% from 0.5% to 1.5%, citing high household debt levels.
• The ERC is preparing for the second phase of green energy bidding for a total of 2,180 MW, by the end of September. It expects to select successful bidders by the end of this year.
• US 2Q24 GDP grew by 3.0%QoQ, meeting expectations. Initial jobless claims fell to 218,000, lower than the expected 224,000, easing concerns about economic recession and labour market weakness.
• Saudi Arabia plans to increase oil production and abandon its unofficial target of $100/bbl oil prices to gain market share. OPEC+ is set to proceed with planned production increases in December. |
Strategy today |
In the short term the SET is expected to move sideways up and has limited upside, supported by the cut in interest rate and expectation of economic stimulus by the government. Short-term baht appreciation is also expected to support greater investment in the Thai capital market compared to the region as fund flows in September show foreign flows turning from net sell to a buy of more than Bt30bn. However, Asian economies, especially China, are still weak. Our strategy is "selective buy". |
Trading today |
The SET is expected to move sideways up but has limited upside in the short term, with funds expected to flow into defensive stocks and those with specific drivers. We recommend "Selective Buy" with four main themes:
1) Investors who want to speculate in stocks with signs of a turnaround and an attractive valuation, with PER and PBV below -1SD - AOT, CRC, AWC, BCH and BEM.
2) Investors who want to speculate in stocks benefiting from flood repairs - HMPRO, GLOBAL, CPALL, BJC, DCC and TASCO, with data showing an average return of 5% for those speculating from mid-September to early November in years with La Nina in 2010-2023 (except 2020 which was derailed by COVID-19).
3) Investors who want to speculate in stocks expected to benefit when the interest rate cycle starts down - Leasing (MTC TIDLOR), Property Development (AP), Commerce (CPALL), Utilities (GULF) and REITs (LHHOTEL and DIF).
4) 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 |
AP: A property developer that will benefit from falling interest rate, which will help presales growth in 2025. 3Q24 profit is expected to grow QoQ, supported by the transfer of low-rise backlog and transfers from the JV condo, Life Rama 4-Asoke, but decline YoY off a high base.
AAV: 3Q24 core profit is expected to improve YoY and QoQ, supported by benefits from short-term baht appreciation and falling jet fuel cost. In 2024, results are expected to turn around to core profit of Bt3.0bn from a core loss of Bt206mn in 2023, and it is expected to return to normal growth of 7% in 2025 to Bt3.3bn. |
