สวัสดีตอนเช้า - 30 ม.ค. 2567 ฟื้นตัวได้ต่อในช่วงสั้น

Market today

The SET is expected to continue to recover, aided by positive sentiment from US markets. However, it still lacks catalysts and investors are waiting for the Jan 30-31 FOMC meeting, which limits short-term upside, with resistances at 1386 and 1396; supports are at 1370 and 1360. A fall below supports would be a bad sign.

Today’s highlights

• Several members of the US Congress are asking President Biden to authorize a military strike against Iran in response to the death and injury of US soldiers in Jordan, attributed to an attack by armed groups backed by Iran.
• The US Treasury Department expects to borrow US$760bn in 1Q24, lower than initial estimates and market expectations due to higher net cash flow and higher cash reserves.
• The US is requiring cloud service providers to inspect and disclose information about foreign clients using their platforms to develop AI applications, a move that may escalate the technology conflict between the US and China.
• The market expects China to continue to face deflation for at least another six months due to slowing demand and the ongoing crisis in the real estate market, which undermines consumer confidence.
• The High Court in Hong Kong has ordered China Evergrande Group to cease operations and sell assets to pay off its massive debt of 2.39 trillion yuan (approximately US$333bn).
• The Federation of Thai Industries (FTI) reported Thailand exported 1.11mn cars in 2023, the highest in five years. The 2024 target is set at 1.9mn cars, a 3.17% increase, with 1.15mn units for export and 750,000 units for the domestic market. Electric vehicles (EVs) are expected to gain more popularity.
• Thailand's Ministry of Finance is continuing with the digital wallet project, although it may be delayed beyond the initial May 2024 timeline, with no new definite schedule set for the project's start.

Strategy today

In the short-term global stock markets will move up as economic figures and profit are good as expected and lower hope the Fed will cut interest rate. The FOMC meeting this week is expected to show no signal of cutting interest rate in March. The Thai stock market is expected to be pressured by concerns on weak 4Q23 profit for Thai companies and the lack of a new catalyst. The strategy is “defensive and accumulate fundamental stocks to wait for the market recovery”.

Trading today

Weekly portfolio: In the short term the SET will be pressured by expected weak 4Q23 operating results and the lack of a new catalyst. We recommend “accumulate defensive and fundamental stocks to wait for the market recovery” in three main themes:
1) Short-term investors (3-4 months) who want to invest in high-quality dividend stocks during dividend season, for stocks going XD between Mar–May 2024, with expected yield on 2023 (after deducting interim dividend) of over 5% - AP, BCP and KTB. For long-term investors who want to invest in high-quality dividend stocks to consistently generate cash flow, with dividend yield expected at over 5% on 2024 - AH, AP, BCP, KTB, PTT and TTB.
2) Investors who are concerned about market fluctuations are recommended to invest in defensive stocks that are expected to beat the market with beta below 1 and price has outperformed the SET YTD – ADVANC, AOT, BDMS and TISCO.
3) Long-term investors are recommended to invest by DCA accumulation as this is seen as good timing after the SET has fallen significantly and risk is low, while stock prices are undervalued – BBL, BDMS, BEM, CPALL, PTT and SCC, all of which are in SET100 and are leaders in their industries with ESG ratings of AAA and AA, valuation lower than 10-year historical average and strong operating results.
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).

Daily top picks

BEM: 4Q23 net profit is estimated at Bt796mn, growing 32%YoY on higher expressway traffic volume and higher passenger volume on MRT. This will help lift 2023 net profit 40% to Bt3.4bn. 2024 net profit is expected to grow 27% on continued growth in traffic and passenger volume.
GPSC: In the short term the company benefits from a fall in European natural gas price and bond yield while working to adjust electricity sales contracts for industrial customers to be based on gas price to reduce the volatility brought by changes in Ft, which does not align with cost. The stock is trading at PBV of -1S.D. (5-year average) with PBV 24F of 1.1x.

Today’s reports

BEM – Preview 4Q23F: YoY growth to continue
BJC – Preview 4Q23F: Best quarter in 2023
PTTGC – Preview 4Q23F: Supported by extra gains

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