Should hold at 1,514, Expect a rebound. |
| Market today |
The SET is expected to recover from support of 1,514, which is a following point. If it can hold here, there is an indication of a technical rebound with resistance at 1,540. A break through this would be a short-term positive with next resistance at 1,550. Follow US CPI, to be reported tonight Bangkok time. |
| Today’s highlights |
• President Biden issued an executive order to restrict investment by US companies in some Chinese deliciated tech companies. If they do invest, they will be required to notify the government of other technology investment.• Rice price in Asia spiked to a 15-year high on rising concerns on worldwide food production and the harm from a drought on Thailand’s agriculture and India’s suspension of some exports.• Stock and bond prices of Country Garden, a property developer which holds the sixth largest market share in China, fell after it did not repay principal and interest on time, worsening confidence in the real estate sector.• EIA reported an increase of 5.9 mn bbl in US crude oil inventory last week, more than the 2.3 mn bbl expected.• Natural gas price in Europe rose 29% DoD and 6% DoD in the US due to a strike in LNG plants in Australia.• BoT plans to cut its 2023 GDP forecast to 3.6% as exports are expected to decline as global and China economies slow. It also expects 2Q23 GDP come miss estimates. A signal of continued tightening in interest rate is pressuring, while the new government, when it is form, may engage in populist policies, which would affect stability if overdone. |
| Strategy today |
The SET remains range-bound, still waiting for some progress in the formation of a government and the 2Q23 earnings season amid lower inflation forecasts, with inflation expected to slow from last month. Outside Thailand, watch China and US economic data and 2Q23 operating results, expected to show slower recovery signals in 2H23. We recommend “Selective Buy”. |
| Trading today |
Weekly portfolio: The SET is waiting for some progress in the local political scene and watching 2Q23 earnings reports, both at home and abroad. We recommend “selective buy” in themes with positive drivers: 1) Stocks whose 2Q23 profit is expected to continue growing YoY and QoQ – ADVANC (defensive), BEM (defensive) and GULF (priced below pre-election period). 2) Speculative stocks whose 2Q23 profit is expected to beat market expectations – AOT (the first quarter of a return to collecting the minimum guarantee) and MINT (NHH profit at a record high). 3) A stock whose 2Q23 profit was good and is expected to continue good in 3Q23 – SCGP (high season for the packaging business).In the short term we recommend avoid investment in: 1) stocks whose 2Q23 profit is expected to be weak and may be subject to downgrades, specifically in Food (TU, CPF GFPT and BTG) and Securities (ASP and MST), and 2) stocks expected to be affected by El Nino, which will erode purchasing power in the agricultural sector: Commerce (GLOBAL), Finance (MTC, SAWAD), Automotive (SAT, STANLY), Beverages (CBG, where sugar plays a leading role in cost), Hydropower (CKP) and Food & Agriculture (CPF and GFPT). |
| Daily Focus |
BCP: In the short term the company will benefit from higher natural gas price. Profit in 2H23 is expected to grow HoH on a recovery in GRM as winter, with its higher demand for heat, approaches.BBL: Profit in 3Q23 and 2023 is expected to exhibit the highest growth in its sector as its credit cost has fallen the most in the sector, it has higher NIM and upside from growing loans. |
Today’s reports |
BCP – 2Q23: Lower profit QoQ as expected BJC – 2Q23: In line with market estimatesJASIF – 2Q23: Earnings in lineOR – 2Q23: Profit slide QoQ was as expected |
