ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก Daily240905_T
Expect fund flows to keep pushing
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Market today |
The SET is likely to test at resistance between 1370-1372 on expectation of economic stimulus by the new government, while the baht is starting to appreciate, possibly bringing funds back in, supporting the index. A break through 1372 would be a good sign. Supports are between 1355-1360, which are expected to stand firm.
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Today’s highlights |
• The PM is preparing to lead the new cabinet in taking the oath of on Sep 6, followed by a special cabinet meeting on Sep 7. It will present its policy to Parliament on Sept 11-12. The draft urgent policies focus on stimulating the economy, the digital wallet, raising agricultural product prices and preparing a Bt300bn baht economic stimulus package. • The JSCCIB has raised this year's export growth target to 1.5-2.5% but maintains its GDP growth forecast at 2.2-2.7%. It estimates that the flooding in Aug to early Sep has caused Bt6-8bn in damages, or 0.03-0.04% of GDP, with the agricultural sector being the most affected. • The MPC Minutes notes that interest rate currently aligns with economic expansion. It noted signs that NPLs were spreading from low-income to high-income households and support guarantee measures and debt restructuring programs for SMEs. • Reuters reports OPEC+ is considering postponing its planned production increase set for October, as oil prices have fallen to a 9-month low due to weak demand and supply volatility. • The US JOLTS report shows job openings in July decreased to 7.67mn, the lowest since January 2021, indicating a continued easing in the labor market. This could encourage the Fed to reduce interest rates this month. • The Atlanta Fed President believes the Fed should not keep interest rates high for too long as it risks damaging employment. He also warns that waiting for inflation to reach the 2% target before cutting rates could lead to labor market stagnation.
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Strategy today |
In the short term, the SET is expected to move sideways up, driven by recovering consumer confidence as the political scene settles and on hopes of rapid stimulus in 3Q-4Q24. The BoT seems more open to an interest rate cut and funds are flowing into EMs, resulting in appreciation of the baht and other Asian currencies. Funds are expected to move out of Energy, Petrochemical and ICT and flow into Bank, Commerce, Construction Services and Healthcare, which will reduce the impact from externals, i.e. slowing US and China manufacturing and services PMIs. Our strategy is "selective buy".
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Trading today |
In the short term the SET is expected to move sideways up on clearer political skies and acceleration of economic stimulus in 3Q-4Q24. We recommend "Selective Buy" with four main themes: 1) Stocks expected to benefit from more rapid short-term stimulus by the new government in September that will benefit consumer staples players - CPALL, CPAXT, TNP and CBG. 2) For investors who want to generate short-term cash, we recommend high quality dividend stocks that are paying a 1H24 interim dividend with yield of more than 1.5% - HTC, BCP and BBL. 3) Investors who want to speculate in stocks that benefit from a downward interest rate cycle - leasing (MTC), property development (AP), commerce (CPALL and CPAXT), and utilities (GULF). 4) Earnings plays on stocks with strong profit momentum, with 3Q24 profit expected to grow YoY and QoQ, 2H24 expected to grow HoH and YoY and inexpensive valuations - DELTA, GULF, BDMS and BEM.
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Daily top picks |
CPALL: 2H24 profit is expected to grow YoY, leading peers, driven by strong sales growth and margin in the CVS unit and CPAXT. It is also poised to benefit from the more rapid release of economic stimulus by the new government, not yet in our forecast. GPSC: The company benefits in the immediate term from the decline in bond yield and in natural gas price. 2024 core profit is estimated at Bt4.58bn, growing 33.8%, and core profit is expected to grow another 16.3% in 2025, supported by rising contribution from overseas renewable energy projects on higher capacity in India and Taiwan.
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Today’s reports
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BDMS (High conviction) - Better positioned vs peers
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