ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก Daily231218_T 1 To move between 1370 – 1400 |
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Market today | The SET is expected to slow down to reduce heat and not expected to break through 1400. However, technical indicators are good with a slowdown with supports at 1380 and 1370, causing the index to move between 1370 and 1400. A break through 1400 would be a greater positive. | Today’s highlights | • John Williams, President of the Federal Reserve Bank of New York, said it is too soon to discuss reducing interest rates. The current level is considered appropriate to control inflation and support economic expansion. His remarks led to a strengthening in the US dollar on Friday.
• The US Composite PMI rose to 51.0 in Dec, a 5-month high, up from 50.7 in Nov.
• Maersk announced it is suspending shipping through the Babel-Mandeb Strait in the Red Sea due to threats of attacks from the Houthi rebels in Yemen.
• The Ministry of Finance plans to ask the Cabinet to consider measures to reduce taxes on beverages and to eliminate inbound duty-free shops at all airports by the end of the year. This is intended to encourage spending within the country by both Thai and foreign tourists.
• TAT is preparing a campaign in collaboration with Saudi Airlines, the national airline of Saudi Arabia. It is expected that around 300,000 tourists will visit Thailand next year, generating an estimated revenue of Bt27.6bn.
• The Ministry of Energy plans to ask the Cabinet to reduce the types of high-speed diesel to two: regular B100, which is the base fuel for the country, and B20 as an alternative fuel, effective from May 1, 2024.
• ERC is seeking cooperation from PTT to reduce the price of natural gas used for electricity generation, aiming to keep the electricity tariff at Bt4.10/unit. However, no decision has been made as PTT must consider its shareholders and any decision must be made in consultation with its executive board. | Strategy today | In the short term, markets may rise on a more dovish view from the Fed: interest rate has peaked, and the Dot Plot indicates a 75bps cut, more than the previous expectation of 50bps, and the US economy is forecast to grow by 1.4% in 2024. There may also be a shift to markets that have lagged, which may benefit the Thai market, which is also expected to benefit from fund flows into TESG and RMF funds as they open for sale this month. | Trading today | Weekly portfolio: The SET is focused on selective investment in stocks with specific drivers and probable fund flows from TESG funds in December. We recommend “selective buy” in themes with specific drivers:
1) Big-cap stocks in SET50 expected to be selected as investment targets as the TESG fund is set up. Our picks are classified into two groups: 1) stocks with ESG rating of between “A” and “AAA” and the stock prices underperform the SET YTD – OR, HMPRO and AOT; and 2) stocks with ESG rating of “AAA” and the stock price outperform the SET YTD with strong operating results and expected to have dividend yield greater than 5% - PTT and KTB.
2) Those looking for long-term dollar-cost-average (DCA) investment as we see it as best after a sharp drop in the SET, as risk is low and stock prices are undervalued; 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.
3) 10 top picks in Yearbook 2024 which are selected based on stocks that are expected to have strong growth and benefit from new economic and investment stimulus packages – AMATA, BBL, BEM, BDMS, CPALL, CRC, GULF, OR, SCC and SCGP.
In the short term we recommend being cautious on stocks that are expected to be materially affected by the planned raise in the minimum wage, set to be discussed in the Dec 25 cabinet meeting: Courier Services (KEX), Food (CPF, ZEN, GFPT and TU), Real Estate (LPN and PSH) and Electronic Components (HANA). In the medium term we recommend being cautious on stocks that are set 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 BTG).
Special Report: Take a look at our Thai language Yearbook 2024 “A Year of Value Investing”, highlighting a very undervalued Thai capital market that is offering a good opportunity for long-term investment with 10 selected top picks for 2024. | Daily top picks | ADVANC: Listed on the SETESG Index with an “AAA” rating. Although 4Q23 core profit is expected to fall QoQ due to high season for marketing expenses, core profit is expected to grow YoY from tourism-related revenue. The 3BB-JASIF deal is seen as a long-term plus.
PTTEP: Listed on the SETESG Index with an “AAA” rating. Price has fallen by 11%MoM due to falling oil price, opening a window to purchase. Oil price was stable last week, and the conflict in the Red Sea is a positive as it is leading to an interruption in shipping. | Today’s reports | Food – Cautious view maintained | | | Click here to read and/or download file Daily231218_E |
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