| Limited upside and may weaken. |
| Market today |
Upside is seen as limited at resistance of 1,545, a past high, with the next resistance at 1,555. Investors are following politics, which is still uncertain, while the market, which will be closed tomorrow, may see selling to avoid risk. Lower bounds are at supports of 1,530 and 1,520. |
| Today’s highlights |
• The House Speaker will call for a meeting of Parliament on Aug 4 after the Constitutional Court announces whether or not it will accept the case fled by the ombudsman regarding the PM vote and amending of section 272. • The FTI said private sector will not accept a cut in electricity price in Sep-Dec 2023 by ERC to Bt4.45/unit as there are more factors that can lead to more cuts, on expectations the new government will restructure the Ft calculation. • The UTCC says average 2023 household debt is Bt560,000, a 15-year high and it expects it will take five years to return to a normal level of 80%. • US 2Q23 GDP grew more than expected at 2.4%, supporting the Fed’s outlook that the economy will have a “soft landing”, while PCE and Core PCE in Jun slowed from in May,. raising hopes the Fed will stop raising rates after the Fed chairman said if inflation fell significantly, the Fed would cut the rate down to normal or below normal. • The BoJ met and agreed to keep short-term interest rate at -0.1% and 10-year government bond target at 0%, but widen the YCC bound to 0.5%, which indicates BoJ may stop the ultra loose policy that has been used for years. • ECB raised interest rate by 25bps for the ninth consecutive time, but it is likely to stop raising in September. |
| Strategy today |
The SET is expected to be range-bound as it waits for the formation of a new government as well as the onset of the 2Q23 earnings season. The MPC meeting on Aug 2 is expected to raise interest rate another 25bps. The market is watching external factors of Chinese and US economic data and 2Q23 operating results, which are expected to show signs of recovery in the second half of the year. We recommend “Selective Buy”. |
| Trading today |
Weekly portfolio: The SET is waiting for clarification about politics and watching 2Q23 earnings reports, both at home and abroad. We recommend “selective buy” in themes with positive drivers: 1) Stocks whose 2Q23 operating results are expected to continue growing YoY and QoQ – ADVANC, BEM and GULF, and for speculation, stocks whose 2Q23 profit is expected to beat market expectations – AOT and MINT. 2) Stocks whose profit is expected to bottom in 2Q23 and gradually climb QoQ and YoY in 3Q-4Q23 – ERW, PTT, OSP and KCE.In the short term we recommend avoid investment in: 1) stocks whose 2Q23 profit is expected to be weak and may be subject to downgrades, specifically Food (TU, CPF GFPT and BTG) and Securities (ASP and MST), and 2) stocks 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), Hydropower (CKP) and Food & Agriculture (CPF and GFPT). |
| Daily Focus |
BDMS: 2Q23 core profit is expected to be Bt2.7bn, growing 3%YoY from development in new international markets which continues to support profit growth, but declining 21%QoQ on seasonal factors. 2023 core profit is expected at Bt14bn, growing 12%YoY.MINT: Valuation is seen as inexpensive with 23F PER at 29x which is equivalent to past average, while profit is strong. 2Q23 core profit is expected to be Bt2.8bn (+YoY and +QoQ). Improvement in 2H23 profit is expected to lead MINT to outperform the market. |
Today’s reports |
CRC – Preview 2Q23F: An unexciting quarterGLOBAL – 2Q23: Below market estimatesTRUE – 2Q23: Another disappointing quarter |
