| . |
| Market today |
The SET did not break through its previous high of 1,562, bringing a technical indicator of a slowdown with supports at 1,550 and 1,540. At the same time, the index still has good indicators for a climb. If it can break through 1,562, things will continue good with resistance at 1,570. |
| Today’s highlights |
• UTCC expects the cleared political scene to lead to GDP recovery from 4Q23, while the Bt10,000 digital wallet budgeted for Bt500bn, will lead to Bt1.5tn in money circulation and support 2024 GDP growth of 5-7%.• In his speech at Jackson Hole, the Fed chairman said the FOMC will carefully consider whether to raise or keep interest rate flat by evaluating economic data but did not signal a rate cut.• Germany 2Q23 GDP contracted by 0.2%YoY and was stable QoQ due to a slowdown in manufacturing. Germany’s business confidence index in Aug declined for the fourth month.• Baker Hughes, an energy company, reports US energy companies reduced the number of oil rigs for the ninth consecutive month in August.• There was a fire at naphtha inventory storage at Marathon Petroleum’s refinery in Garyville, Louisiana, resulting in a 5% DoD rise in diesel price on Friday.• China announced a cut in domestic stock transaction tax for the first time since 2008 from 0.1% to 0.05% in an effort to revive the sluggish Chinese stock market. This will take effect from Aug 28. |
| Strategy today |
The SET is seen to swing in a bound of 1,550-1,560 as politics settles, expecting a new cabinet to produce stimulus packages to support investment and fund flows. However, we are still concerned about the global economy overall, especially in China, which may pressure SET upside. Our investment strategy is for "Selective Buy". |
| Trading today |
Weekly portfolio: The SET will be supported by expectations for stimulus from the new government, though the enthusiasm will be tempered by the continued risk of a global economic slowdown. Our investment strategy is “Selective Buy”: 1) Stocks for medium-term investment: highlighting eight stocks across four industries whose 2H23 profit is expected to grow both HoH and YoY - PTT, BCP, KCE, HANA, BDMS, BCH, AOT, and ERW. 2) Speculative stocks expected to benefit from immediate action on economic policy after the formation of a government, particularly in Commerce and Food & Beverage (TNP, CPALL, CPAXT, BJC, OSP and HTC), as these will benefit from the Bt10,000 digital wallet, from a debt moratorium for farmers and specific businesses and a cut in energy costs, all of which will support purchasing power and thereby boost sales. 3) Speculative stocks expected to benefit from a return of fund inflow – KBANK, GULF, CRC and BGRIM.In the medium term we recommend to be cautious on 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) and Food & Agriculture (CPF and GFPT). |
| Daily Focus |
KTB: 3Q23 profit is expected to grow 22%YoY (higher NII) and 2%QoQ (higher NII, ECL and opex); 2023 profit is expected to grow 22%YoY. The bank will report the largest NIM expansion and has lower quality asset risk than other banks.TOP: 2H23 profit is expected to improve HoH from better market GRM, higher diesel and jet fuel crack spreads during strong seasonal demand and low inventory levels globally, widening product spread. |
Today’s reports |
KTB (High conviction) – Largest NIM expansion, attractive valuation |
