สวัสดีตอนเช้า - 25 มิ.ย. 2567 รีบาวด์ได้ แต่ยังไม่กลับตัว

Rebound, but not turning

Sentiment was burnished by an adjustment in tax benefits for the ThaiESG fund, which continued the technical rebound, with next resistance at 1320-1325. However, overall, there is no turning signal, limiting the upper bound, with supports at 1310 and 1300. A fall below this will send it back to negative.

• Canada is considering imposing import taxes on EVs from China and increasing investment requirements for Chinese companies in Canada due to concerns about unfair competition in the Canadian automotive industry.
• The Ministry of Finance is adjusting tax benefits for ThaiESG funds, allowing a tax deduction of up to Bt300,000 and cutting the holding period to five years. This is expected to attract Bt30bn in new investment annually. It is also planning to set up a new Bt500bn Vayupak Fund, with Bt150bn to be raised from public investors.
• The Ministry of Commerce reports a 16% increase in foreign business approvals during the first five months of 2024 to 317 from 273, with investment value up 58% to Bt72bn from Bt26.3bn. However, employment of Thai workers in these businesses fell by 60% or 1,787.
• The National Energy Policy Council has increased diesel price subsidies to Bt2.02/liter from Bt1.60/liter due to rising global oil prices, but the raise in diesel price was limited by the government's ceiling price of Bt33/liter, and diesel price has been set at Bt32.94/liter. The Oil Fund is facing financial strain, losing about Bt19.81mn/day or Bt594mn/month; it currently is carrying a deficit of Bt110bn.
• The BoI and government agencies are actively encouraging 400 Japanese investors to relocate production bases to Thailand to mitigate geopolitical risks. The government is also working on 20 free trade agreements and developing clean energy sources to prepare for increased foreign investment.

In the short term, the SET is still volatile and fragile from prolonged pressure from politics and it will continue to underperform the region. However, there are economic hopes lying in industrial production and the release of the MPC minutes that may signal recovery in the manufacturing sector. Externally, there is no new catalyst this week. Follow US PCE in May, which is expected to be stable MoM and 2.6%YoY (slowing from 2.7%YoY in April); this does not heavily pressure the market. “Selective Buy”.

Political risk is making the Thai capital market volatile and fragile, while there is no new catalyst from outside next week. We recommend “Selective Buy” with four main themes:
1) Global plays: Companies whose profit is expected to continue to recover and the benefit from a global recovery will be sufficient to offset domestic turmoil – KCE, SCGP, TU and MINT.
2) Stocks expected to benefit from short covering after the SET implements the uptick rule on July 1, 2024 – HANA, BEM, KCE, MINT, OSP, BBL, SCGP and AOT.
3) Stocks expected to benefit from the EURO 2024 football competition between June 14-July 14, 2024, - ADVANC, TRUE, CPALL, MINT and TU.
4) Tension has eased about the situation in the Middle East, leading Brent down to the lower bound of US$80-90/bbl, which is seen as an opportunity to hedge. For high-risk takers, we recommend an upstream oil stock – PTTEP.

MINT: One of our top picks in Tourism. 2Q24 profit is expected to grow YoY and QoQ as Europe enters high season and the benefits from EURO 2024 (Jun 14–July 14). Valuation is attractive, trading at a 2024F PER of 23x, -1S.D. of historical PER. We feel the price has yet to reflect the expected 12% growth in 2024 core profit to Bt8bn.
BCP: The company benefits from recovering European natural gas price. The rise in oil price in June is expected to support profit by reducing stock loss. Refinery margin is expected to improve, led by diesel, and there may have upside from seasonal demand for gasoline and jet fuel. Valuation is attractive, trading at 2024F PER of 4x; dividend yield is a solid 6%.