Testing a previous high of 1,562. |
| Market today |
The SET is expected to continue rising, supported by clarity in politics after the PM vote yesterday. Up next is the list of cabinet ministers. Next resistances are at 1,555 and a previous high of 1,562. Supports are at 1,535 and a following point at 1,525. If it can stand here, signals are good. |
| Today’s highlights |
• Yesterday Parliament voted Mr. Srettha Thavisin in as the 30th prime minister with 482 votes. Formation and seating of the government is now clearer and is good news for Thailand’s investment climate. Commerce and Consumer Goods sectors are expected to benefit most from the government coalition’s economic-related policies – CPAXT, CPALL, TNP, BJC and OSP.• EXAT has delayed raising the expressway tolls for Chalong Rat and Bang Na – Chon Buri Express Way for another six months to Mar 1, 2024, to help ease the cost of living and transportation costs.• The Ministry of Tourism and Sports reported 17,028,411 foreign tourists entered Thailand between Jan 1 – Aug 20, generating revenue of more than Bt714bn.• The BoT says commercial bank loans contracted by 0.4% in 2Q23 due to corporate loan repayment. Vehicle NPLs increased to 2.05% from 1.89% in 1Q23. Personal loan NPLs were stable.• Iraqi Minister of Energy discussed with Turkey the resumption of oil exports after Turkey suspended exporting Iraqi oil of 0.45mn bbl/ day via a pipeline between 2 countries.• The drought resulting from El Nino is hurting transportation on the Panama Canal substantially. Ships must reduce tonnage by removing hundreds of containers. India raised its tax on onions by 40% after onion crops were severely damaged by heavy rain.• Japan will start releasing treated radiation-contaminated water from the Fukushima power plant into the Pacific Ocean on Aug 24. |
| Strategy today |
| The SET is expected to rise to test the upper bound of 1,550-1,560 after conclusion of the PM vote. Funds are expected to return to speculate on the market. However, in the short term, the investment climate around the world is expected to be pressured by concerns over slowdowns in the US and China economies. All eyes will be on the statement by Fed Chair Powell at the Jackson Hole Symposium (August 24-26) for indications of the direction of US interest rates. This limits SET upside. The investment strategy is for "Selective Buy |
| Trading today |
Weekly portfolio: The SET is seen to have limited upside. While there is progress in domestic political factors, the market remains pressured by risks associated with the global economic slowdown. The investment strategy is “Selective Buy” as follows: 1) Highlighting eight standout stocks across four industries where earnings are expected to grow both HoH and YoY - PTT, BCP, KCE, HANA, BDMS, BCH, AOT, and ERW. 2) Stocks paying an interim dividend on 1H23 profit with ~2% yield – LH (XD on Aug 24), HTC (XD on Aug 24) and AH (XD on Aug 29). 3) For risk-tolerant investors seeking to speculate, choose stocks that are expected to benefit from returning fund flow - KBANK, GULF, CRC, and HMPRO.In the short term we recommend avoid investment in stocks that are expected to be affected by El Nino, which will erode purchasing power in the agricultural sector: Commerce (GLOBAL), Finance (MTC, SAWAD), Automotive (SAT, STANLY), Beverages (CBG, where sugar plays a leading role in cost), and Food & Agriculture (CPF and GFPT). |
| Daily Focus |
CPAXT: 2H23 profit growth is expected to be the most outstanding in its sector (YoY and HoH), supported by lower financial cost after refinancing in April and synergy-led improvement in B2B and B2C businesses.GULF: 2H23 core profit is expected to grow YoY and HoH from an additional IPP, GPD unit 2 (66.5MW) which will start up in Oct 2023, and profit share from Jackson Generation, which will increase HoH from a loss of Bt349mn in 1H23 due to low electricity price. |
Today’s reports |
Petrochemicals – Weaker naphtha price drives spreadsCBG – 2H23 to recover, added new business CPAXT (High conviction) – Sector’s most outstanding 2H23F growthGPSC – Looking for better 2H23 after weak 1H23 ZEN – Operations looking better in 2H23 |
