ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก h Daily231206_T Recovery is limited with downside risk |
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Market today | The overall signals are still weak so we see recovery limited at resistances of 1390 and 1398 but will turn positive if resistance is broken through. If not, downside risk takes over. We assign support at 1370 and if it falls below 1366, a new low is expected. Next support is at 1360. | Today’s highlights | • The US ISM reported an increase in services PMI index for Nov to 52.7, exceeding expectations. The JOLTS report showed a fall in US job openings in Oct to 8.733mn positions, lower than anticipated and the lowest since Mar 2021.
• Isabel Schnabel, a member of the Executive Board of the ECB, said there is no need for the ECB to increase interest rates further, as inflation unexpectedly fell, as did bond yields.
• Moody’s has downgraded the outlook for China’s government credit rating from stable to negative due to the slowdown in economic growth in the medium term and risks arising from a major crisis in China’s real estate market.
• Caixin/S&P Global Services reported that China services PMI index for Nov reached a three-month high of 51.5. However, it still remains below the long-term average.
• The TAT reports a total of 25mn foreign tourists since Jan 1, 2023, generating ~Bt1.07trn in revenue. The top five countries of origin for these tourists are Malaysia, China, Russia, South Korea, and India.
• The Ministry of Energy says that if the government sets the electricity tariff for the period Jan-Apr 2024 at no more than Bt4.20/unit, EGAT may have to shoulder a short-term additional cost burden of Bt13bn. Today the JSCCIB will discuss urgent issues related to the impact of rising electricity prices, proposing that the government cap it at Bt3.99 /unit. | Strategy today | In the short term the SET is expected recover on expected fund flows into TESG funds that will help stabilize the Thai capital market, with recovery in big-cap stocks after earlier price drops. Our strategy is selective buy. | Trading today | Weekly portfolio: The SET is expected to recover after an earlier fall on expected fund inflows from TESG funds designed to help capital market stability. We recommend “selective buy” in themes with specific drivers:
1) Big-cap stocks in SET50 expected to be selected as investment targets for the TESG fund being set up. We select stocks in the SETESG index with two factors of interest: 1) ESG rating of “AAA” or “AA” and 2) prices are down more than the SET YTD – SCGP, OR, CPALL, BEM, GULF, CRC and HMPRO, while also recommend the stock with ESG rating of “A” and down more than the SET YTD – AOT.
2) Big-cap stocks in SET50 placed in the SETESG with a rating of “AAA” and outperforming the SET YTD, with strong profit and dividend yields greater than 5% - PTT and KTB.
3) Those looking for long-term dollar-cost-average (DCA) investment as we see it as the best after a sharp drop in the SET, so risk is low and stock prices are undervalued; on this theme we recommend BBL, BDMS, BEM, CPALL, PTT and SCC, all SET100 stocks and leaders in their industries. They are also included in the SETESG index with ESG rating of “AAA” or “AA” and valuations are below 10-year historical mean with steady profit.
In the short term we recommend being cautious on stocks that are expected to be significantly affected by the planned raise in the minimum wage, set to be discussed in the Dec 12 cabinet meeting: Courier Services (KEX), Food (CPF, ZEN, GFPT, TU and AU), Real Estate (LPN, PSH, SPALI, SIRI, QH and AP) and Electronic Components (HANA and KCE). In the medium term we recommend being cautious on stocks that are expected to be affected by El Nino, which will erode purchasing power in the agricultural sector: Finance (MTC, SAWAD), Automotive (SAT, STANLY), Beverages (CBG has high sugar cost) and Food & Agriculture (CPF GFPT and GFPT). | Daily top picks | BEM: This is an interesting stock in the SETESG Index with an “AA” rating. In 4Q23, it is expected to report a YoY increase in profit on more expressway traffic and MRT riders. In 2023, profit is expected to grow 45% followed by 27% growth in 2024 on rising expressway traffic and MRT passenger numbers.
ADVANC is also of interest, put in the SETESG Index, with a “AAA” rating. Although profit is expected to drop QoQ in 4Q23 due to the high season for marketing expense, YoY profit is expected to grow on higher revenue tagging higher tourism. The 3BB-JASIF deal is seen as providing a long-term benefit. | Today’s reports | Petrochemicals – Weak product spread continues
ACE – Still not on our radar | | | Click here to read and/or download file Daily231206_E |
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