ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก Daily240802_T Limited upside
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Market today | The SET rose to resistance of 1330 and was unable to break through, with upside limited by negative sentiment from US markets and domestic politics. The case to dissolve the Moving Forward Party will be decided on Aug 7 and this is pressuring the index down, with supports at 1315 and 1310. | Today’s highlights | • US ISM Manufacturing PMI in July declined to its lowest since November 2023, against market expectations of an increase. US initial jobless claims in the previous week rose to their highest since August 2023.
• The BoE voted 5 to 4 to reduce policy interest rate to 5.00%, in line with market expectations. This marks the first rate cut in over four years, with seven rate holds since August 2023.
• OPEC+ decided to maintain its total production cut of 5.86mn bpd, consisting of a 3.66mn bpd cut and a voluntary 2.2mn bpd cut from 8 OPEC+ nations. This suggests OPEC+ may begin to increase production in October 2024.
• China's National Development and Reform Commission (NDRC) said China has no plans for additional economic stimulus in the second half of 2024, focusing instead on fostering new economic growth drivers.
• China is preparing to increase wheat purchases to support wheat prices, following heavy rains in northern China that led to surplus wheat production. Additionally, the economic slowdown has reduced demand for flour-based products.
• The Energy Regulatory Commission decided to maintain the average electricity rate charged to the public (excluding VAT) at Bt4.18/unit for the period of September-December 2024. Users consuming less than 300 units/month will continue to be charged at Bt3.99/unit.
• The SET is planning to attract family businesses to raise capital in the stock market, citing their importance to the Thai economy and capital market. Data shows that after listing, these businesses have seen continuous growth in revenue, profits, and asset value. In 2023, their combined asset value exceeded Bt25tn. | Strategy today | In the short term the SET is expected to rebound but with limited upside, awaiting 2Q24 earnings releases, which are expected to show growth, while waiting for clearing of the murky political skies. External factors are also expected to support a rebound after profit-taking in technology stocks last week: the Fed is expected to keep interest rates unchanged and 2Q24 earnings announcement of US listed companies are expected to be strong; China's economy is weak, and the technology war is expected to escalate. Our strategy is "selective buy". | Trading today | The Thai capital market is expected to rebound but with limited upside, while waiting for clarification of domestic factors and release of 2Q24 earnings. We recommend "Selective Buy" with four main themes:
1) Earnings plays: 2Q24 profit to grow YoY and QoQ and valuations are not expensive - MINT, BEM, OSP, TU, KCE, CPF, TRUE and AMATA.
2) Stocks expected to benefit from short covering after the uptick rule started on July 1, also with strong fundamentals with SETESG Ratings between AAA and A - DELTA, TOP, BEM, MINT and AOT.
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 attacks 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 | CKP: In the short term the company benefits from declining bond yield. 2Q24 profit is expected to be supported by higher hydropower generation due to higher water levels, while 3Q24 profit is expected to continue to be good on the entry into rainy season, with water levels expected to reach the year's high. Recommend to buy at not higher than Bt3.90/share.
CPALL: 2Q24 net profit is expected at Bt5.8bn, growing 31%YoY and outperforming the Commerce sector, supported by higher sales and margin and higher contribution from CPAXT. 2H24 profit is expected to grow YoY and continue to outperform peers on growth in the CVS business and CPAXT. Recommend to buy at not higher than Bt57.00/share. | Today’s reports | BAM - Preview 2Q24: Slightly up YoY and QoQ
CRC - Preview 2Q24F: Unexciting quarter | | Click here to read and/or download Daily240802_E |
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