Expected to rise, sentiment still good |
| Market today |
The SET is expected to continue rising on positive sentiment in US markets and the finalization of the Thai government. The short-term resistance is at 1,555; a breakthrough would be a more positive sign with next resistance at 1,562. Supports are at 1,540 and 1,530, which are expected to stand firm. |
| Today’s highlights |
• Preliminary US composite PMI in Aug declined to 50.4, a 6-month low, from 52.0 in Jul.• EIA reported an increase in US gasoline inventory of 1.5 MMbbl last week, opposite from the expected fall of 0.9 MMbbl.• Iran plans to increase oil production capacity after diplomatic relations with US improved, helping reduce tension.• Preliminary eurozone composite PMI in Aug declined to its lowest since November 2020.• NVIDIA’s 2QFY24 profit reached a record high for both revenue and net income, due to demand for AI-related products.• TAT is keeping its targeted foreign tourists in 2023 at 25-30mn. In 7M23, arrivals reached 15,391,104.• OSMEP reported a SMESI index in Jul of 52.0, up from 50.9 in Jun. Consumers spent more thanks to more travel during the long holidays and a steady flood of foreign tourists.• BoT plans to adjust its economic outlook in September to reflect the effect from external factors and the drag on purchasing power exerted by the high household debt. The Ministry of Commerce is concerned China’s real estate bubble will slow the tourism sector and exports. |
| Strategy today |
The SET is expected to move within a range of 1,500-1,550 despite the final formation of a new government that has brightened the investment climate and the expected return of fund inflows to the Thai market. However, in the short term global stock markets are expected to be pressured by concerns over a slowdown in the US and China economies and the statement by Fed Chair Powell during 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 – 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 investing 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 |
BCH: Profit will grow in 2H23, rising QoQ in 3Q23 and then moving up to the year’s highest in 4Q23, supported by more local and foreign patients and higher average prices and higher capitation from social securities.BGRIM: Profit will return to normal after a decline in fuel cost and electricity price reflects the cost. 2H23 is expected to be supported by new SPP capacity, SPP replacement project and solar business in South Korea. |
Today’s reports |
BCH (High conviction) – Getting into higher gear in 2H23CENTEL – Waiting for better earnings in 4Q23JASIF – Assessment of new rental structure |
