ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก Daily240807_T Range-bound, waiting for politics
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Market today | The SET is expected to be range-bound with the lower bound at supports of 1270 and 1260 and the upper bound at resistances of 1285 and 1290. Investors are waiting for clarification on politics, specifically the verdict on the dissolution of the Move Forward Party. The index still does not show signs of turning. | Today’s highlights | • Several Fed officials disagree that the lower-than-expected US nonfarm payroll growth in July indicates an economic recession. They say the Fed should start to reduce interest rates to avoid a recession.
• EIA reports global crude oil stocks decreased by ~400,000 bpd in 1H24 and predicts a further decline of 800,000 bpd in 2H24.
• Major Chinese tech companies Huawei and Baidu are stockpiling HBM chips from Samsung Electronics ahead of US restrictions on chip exports to China.
• The Cabinet approved a Bt433mn budget allocation from the FY2024 central fund for the Tourism Authority of Thailand to implement a "Quick Win" project for August-September 2024.
• The UTCC reports the consumer confidence index in July decreased for the fifth month to an 11-month low due to political concerns, unclear economic stimulus measures and high energy prices.
• FETCO says the investor confidence index for the next 3 months is in the "sluggish" range due to international conflicts, Fed monetary policy and an economic recession at home. There are hopes for stimulus measures and recovery in Thailand's economy and tourism sector.
• Today at 3 p.m. the Constitutional Court will deliver its verdict on the dissolution of the Move Forward Party in a case filed by the Election Commission for allegedly attempting to overthrow the government. | Strategy today | In the short term, the SET is expected to decline in tandem with world equity markets on worries over a US recession, while waiting for a clearer political picture at home and this plus uncertainties in the Middle East and the technology war, which may escalate and impact investment, continue to dog the market. However, the SET may decline less than world markets as 2Q24 earnings begin to be released showing earnings recovery. The index is also expected to benefit from fund flows returning to emerging markets. Our strategy is "selective buy". | Trading today | The Thai capital market is expected to decline on concerns about a US recession but the fall may be less steep than global markets since 2Q24 earnings are expected to show improvement plus more fund flows are expected into emerging markets. We recommend "Selective Buy" with four main themes:
1) Earnings plays: 2Q24 profit to grow YoY and valuations are not expensive - ADVANC, TU, CPAXT, BTG, CBG, BCP, GPSC and AU.
2) 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.
3) 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 and AOT
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 | CPALL: 2Q24 net profit is expected to be Bt5.8bn, growing 31%YoY, best among peers on higher sales and margin and higher contribution from CPAXT. 2H24 profit is expected grow YoY and outperform peers, backed by strong growth in the CVS business and CPAXT. We recommend buy at not higher than Bt56.50/share.
BDMS: 2Q24 core profit is expected at Bt3.4bn, growing 11%YoY on higher revenue and EBITDA margin but declining 17%QoQ on seasonal factors. 2024 core profit is expected to grow 13% to Bt1.6bn on growth in operations and profit in 2H24. Currently, the stock is trading at a 2024F PER of 26x, lower than -2SD. Recommend buy at not higher than Bt26.00/share. | Today’s reports | Petrochemicals - Mixed direction of product spread
3BBIF - 2Q24: Core profit in line with expectations
DCC - 2Q24: Down YoY & QoQ on weak demand
GGC - 2Q24: Earnings remain in the doldrums
IRPC - 2Q24: Lower net loss than expected
MTC - 2Q24: Decent, as expected | | Click here to read and/or download Daily240807_E |
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