กลุ่มปิโตรเคมี – ส่วนต่างราคาพลิกปรับตัวลดลงเพราะต้นทุนแนฟทาสูงขึ้น
Stock Note – SNNP Heading back down |
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Market today | The SET is expected to head back down on the return of worries over the Fed’s interest rate stance as US retail sales came in higher than expected. All eyes are on the Fed chairman’s speech tomorrow to assess interest rate direction, with some selling to avoid risk. Supports are at 1,425 and 1,411, while resistances are at 1,440 and 1,450. | Today’s highlights | • The US president is on his way to Israel, with Arab leaders in Jordan, Egypt and Palestine cancelling their meetings with Biden after the bombing of the hospital.
• US retail sales in Sep increased by 0.7%MoM, higher than market expectation of 0.3%MoM, leading 10-yr US bond yield to increase by 13bps and 2-yr yield reached its highest since 2006.
• US semiconductor stocks were sold off due to pressure from rising bond yield; the US is also becoming more restrictive on chip exports to China.
• The global smartphone market contracted by 8% in 3Q23 to a 10-year low due to weak demand for leading brands Apple and Samsung in developed markets.
• Germany’s economic confidence index in Oct rose to -1.1, higher than expected and the third month of an increase, resulting from relief over inflation and signalling confidence for the next six months.
• BoT reports a MoM decline in hotel occupancy rate in Sep of 46%, due to the ending of semester breaks in other countries, cutting the number of tourists; it expects the rate in Oct to be 48.9%.
• The FTI said the automotive market is not affected by the war in Israel yet. But if the war spreads to the Middle East, exports will be affected around the end of the year as cars are the primary product exported to Israel, while exports to Middle East take ~16% of all vehicle exports. | Strategy today | In the short term the SET is expected to able to recover and rebound. Although the market is still concerned over the war in Israel, Fed officials still support the ending of the upward cycle for interest rate, causing US bond yield to slow down and the US dollar to weaken (baht back to appreciate). Also, there are expectations that China will release a 1 trillion-yuan stimulus package and buy into the energy sector to support the stock market index. Our strategy is: take this opportunity to invest in themes with specific drivers. | Trading today | Weekly portfolio: This week the SET is expected to recover or rebound after a sharp fall that already incorporated some of the risks, while the baht is starting to appreciate. We see it as an opportunity to invest in themes with specific drivers:
1) Speculative stocks expected to benefit from oil price if it rises or stays at this already high level in view of concerns that tension in the Middle East will affect oil supply – PTTEP and BCP.
2) Undervalued stocks (price below true valuation) whose prices have fallen into the oversold zone, with strong fundamentals and inexpensive valuation (PER and PBV 2023F below 5-year average) – CPALL, TOP, CPN, BDMS and MINT.
3) Stocks with strong and continuous earnings growth, whose prices have beat the market since the beginning of the year – AMATA, BBL, KTB, BCH and KLINIQ.
Even though for the tourism sector we keep our 2023 foreign tourist forecast at 28mn with 35mn in 2024, in the short term, care should be taken when investing in tourism stocks whose revenue is more attuned to domestic travel (AOT, ERW and CENTEL) and wait for signs that confidence in travel is recovering. 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: Commerce (GLOBAL), Finance (MTC, SAWAD), Automotive (SAT, STANLY), Food & Agriculture (CPF and GFPT) and Beverages (CBG has high sugar cost). | Daily top picks | TOP: WE are positive on 3Q23 profit, backed by a strong recovery in GRM and expectation of a large inventory gain on the rise in oil price in the quarter. Average market GRM YTD is US$7.2/bbl. Although it may weaken YoY, it is still better than the pre-COVID five-year average of US$6.1/bbl.
CRC: Although 3Q23 profit is expected to decline YoY from a slowdown in the retail business, profits will exhibit the best recovery in 4Q23 on seasonality, higher sales and lower electricity cost, while the food wholesale business, “Go Wholesale”, is expected to have limited impact on profit. | Today’s reports | Petrochemicals – Spreads reverse course on rising naphtha |
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