สวัสดีตอนเช้า - 20 ส.ค. 2567 ขึ้นทดสอบแนวต้านสำคัญ

Testing the key resistance level

The SET is expected to continue rising, supported by expected fund inflows on a strong Thai baht and positive US market sentiment, which has reduced recession fears. Key resistance is at 1330-1335, with a breakout indicating a positive outlook. Support levels are at 1310 and 1300. Next event is the MPC meeting.

• Kamala Harris said that if she wins the election, she will support raising the corporate tax rate to 28%, reducing middle-class taxes, providing incentives for first-time homebuyers and addressing cost of living issues.
• The US Secretary of State said that the latest diplomatic efforts for a Gaza ceasefire may be the last opportunity, urging all parties to push for its success.
• Several Chinese banks received new gold import quotas from the PBOC for August, expecting a demand recovery despite record-high prices.
• Asian currencies hit a seven-month high as recession fears in the US ease, and expectations rise for a Fed rate cut next month, while Asian economies start to recover.
• The NESDC reported Thailand's 2Q24 GDP grew by 2.3%, driven by private consumption (+4%), government consumption (+0.3%) and exports (+1.9%), while investment fell by 6.2%. The full-year GDP forecast was adjusted to 2.3-2.8%, with a midpoint of 2.5%.
• The GHB reported a significant slowdown in the real estate sector in 1H24 compared to 2020-2021, due to weak purchasing power, the economic slowdown, high household debt and stricter lending standards, with transfer volume and value down ~9% YoY.
• Huawei said it will work with the Ministry of Digital Economy and Society to help push Thailand to become a regional cloud center.

In the short term, the SET will be volatile pending the formation of the new government and announcement of its policies. Support for entry is around 1280 points. Weak August PMI figures from the EU and US prompt expectations of a Fed rate cut, aligning with the Fed's minutes. The MPC is expected to keep the policy rate at 2.5%. Thailand's 2Q24 GDP growth came in at 2.3%, just under the expected 2.4% (our estimate: 2.1%), up from 1.5% in Q1. Our strategy is "selective buy".

While the SET is expected to fluctuate while waiting for the formation of the new government to learn about their economic policies, there are still hopes the Thai stock market will be aided in its recovery by increased fund flows into emerging markets and greater political clarity. We recommend "Selective Buy" with four main themes:
1) Earnings plays: strong profit momentum, with 3Q24 profit expected to grow YoY and QoQ and expected to grow YoY and HoH in 2H24, while valuations are attractive - DELTA, GULF, TU, BTG, BDMS, TRUE and BEM.
2) For risk-averse investors who want to generate cash flow from their portfolio, we suggest dividend stocks for a short-term investment - BCP (expected to pay interim dividend with a 2% yield) and TU (announced interim dividend of Bt0.31/share, ~2% yield).
3) Stocks expected to benefit from the adjustment of ThaiESG conditions that will raise the maximum tax reduction to Bt300,000 and reduce the holding period to 5 years - ADVANC, AOT, CPALL, BDMS, BBL, KTB and GULF.
4) Brent price has recovered as there continues to be attacks on cargo ships in the Red Sea and on energy infrastructure in Russia, although the Middle East conflicts remain fairly contained. We expect the price to be at US$80-90/bbl. Oil stocks are good as a hedge against risk. For high-risk takers, we recommend an upstream oil stock - PTTEP.

Daily top picks

AOT: Stock price likely to recover after resolving the overhang of closing duty-free shops at arrivals. Profits will grow in line with the growing Thai tourism industry. Profit for 4QFY24 (Jul-Sep) is expected to grow YoY, bringing FY2024 profit to Bt19.3bn, surging 109% YoY.

KTB: Will benefit from government short-term stimulus, with 2H24 profit rising YoY. Full-year profit is forecast to grow 11%, driven by lower credit cost, better loan growth, improved NIM and higher fee income. KTB has lower asset quality risks than others in the sector and an attractive 2024 forward PER of 6.2x (-2SD).

SIRI - 2Q24: Net profit in line on extra gain