ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก Daily240610_TPressure from higher-than-expected US jobs
Market todayThe SET is expected to be pressured by a higher US nonfarm payroll in May than expected, leading bond yield to increase and bringing uncertainty about the interest rate cut by the FOMC. Next supports for the index are at 1320 and 1310, while recovery is limited at resistance of 1340-1345, which the index needs to break through to show signs of a rebound.Today’s highlights• US nonfarm payrolls in May increased by 272,000, higher than the expected 185,000. The May unemployment rate rose to 4.0%, the highest since January 2022 and above the 3.9% forecast.
• OPEC+ signalled it may suspend production increases after 3Q24 if oil prices fall. Baker Hughes said the number of active US oil and gas rigs dropped to their lowest since January 2022 last week.
• The PBOC halted gold purchases for reserves in May after 18 consecutive months of buying, as spot gold prices hit record highs in May.
• Wheat futures fell 1.8% after Turkey banned wheat imports from June 21 to October 15 to protect domestic wheat producers, raising global demand concerns. The market also expects higher US wheat output.
• French President Emmanuel Macron dissolved parliament and called for new elections after losing EU elections to far-right parties on June 9. The first round is set for June 30, with the second round on July 7.
• Thailand reported CPI inflation of 1.54%YoY in May, the highest in 13 months, driven by higher electricity costs off a low base, fuel and fresh food prices, but 5M24 overall CPI fell by 0.13% YoY.
• Suzuki Motor Corp. announced it will cease production at Suzuki Motor (Thailand) Co. by the end of 2025 as part of its global production restructuring review.Strategy today In the short term the SET remains fragile, hurt by increasing political turmoil, which will pressure the market to underperform the region. The MPC is expected to keep interest rate at 2.50% at its meeting this week. No boost is expected from outside the country, with US and China CPIs expected to rise MoM and the FOMC is expected to keep its rate at 5.50%, but adjust the dot plot estimate of cutting the rate to less than the previous forecast of three times. Our strategy is “Selective Buy”.Trading todayThe Thai capital market continues to feel the pressure of local political risk, leading the market to underperform the region, while there is no new positive outside the country this week. We recommend “Selective Buy” with four main themes:
1) Stocks whose 2Q24 profit is expected to grow YoY and QoQ, while valuations are attractive and who are players in industries that have been able to outshine the market YTD – ICT: ADVANC; Tourism: MINT; and Food: TU, BTG and OSP.
2) Stocks expected to benefit from EURO 2024 football competition between June 14-July 14, 2024, - ADVANC, TRUE, CPALL, CPAXT, BJC, MINT and TU.
3) Stocks expected to benefit from recovery in manufacturing, especially in China, whose profit has touched bottom but whose stock prices are yet to respond appropriately - KCE, SCGP and PTTGC.
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.Daily top picksHANA: The company benefits from the depreciation of the baht, and profit is expected to regain momentum in 2Q24 and climb in 2H24, supported by replacement cycles for AI smartphones, RFID and PMS businesses. It is not expected to be affected by rising copper and gold prices as it is able to pass the cost on to customers.
KBANK: The stock price is still laggard. 2024 profit is expected to be stable YoY with loan growth of 3%, a 3 bps slip in NIM and 13 bps fall in credit cost, wi8th a 9% fall in non-NII and stable cost to revenue ratio. It is expected to pay a high dividend this year with dividend yield of 5.3%.Today’s reportsNo InnovestX Equity report today Click here to read and/or download file Daily240610_E |
