Downside is likely to be limited at 1,500 |
| Market today |
We see the SET as in the latter stage of a consolidation and see limited downside at 1,500+/-5. Upside is limited at resistance of 1,530 Breaking through resistance will be a good sign. This week’s key event is Thailand Focus on Aug 23-25, expected to give a sentimental boost. Keep an eye on the parliamentary vote for PM tomorrow. |
| Today’s highlights |
• The US Department of Commerce will impose import duties on solar panels from Thailand, Malaysia, Vietnam, and Cambodia, following evidence that Chinese companies are establishing bases in these countries to avoid paying import duties.• The US is monitoring Hurricane Hilary as its approaches California, which may lead to short-term increases in diesel and gasoline prices on the US West Coast.• The eurozone's inflation rate in July was 5.3%, down from 5.5% in June.• Reuters reports that oil refineries in Asia are seeking alternative crude oil sources to replace oil from Kuwait, which has reduced exports by more than one-fifth to feed its new large-scale refinery. This has caused a surge in Brent crude oil prices and is likely to squeeze profit margins.• Today, the NESDB reported a 2Q23 GDP growth of 2.6%YoY, slowing from +2.7%YoY in 1Q23. The annual GDP forecast has been adjusted downwards to reflect the slowdown in exports and delayed government formation. The TDRI projects this year's GDP at 3.0-3.5%, boosted by the recovery of tourism.• The Center for Disease Control warns that Thailand is experiencing seasonal diseases, such as a severe influenza outbreak. Since Jan 1 – Aug 17, there have been 97,000 reported cases, three times higher than the previous year.• Automakers and property developers suggest that political uncertainty and high interest rates are hurting Thai purchasing power, with a 20% loan rejection rate and a 40% mortgage rejection rate. Additionally, household debt is nearing 90%, the highest in over 10 years, causing consumers to delay purchasing decisions.• Cryptocurrency prices remain volatile due to continued concerns from regulators. |
| Strategy today |
The SET continues to move within the range of 1,500-1,550. If the PM vote on Aug 22 ends up giving the country a prime minister, there is a possibility the SET will test the upper range of 1,550-1,560. Fund flows are expected to start to return. However, the global stock market investment atmosphere in the short term is anticipated to remain pressured by concern over the slowdown of the US and Chinese economies. Investors are keenly watching the statement from Fed Chair Powell during the Jackson Hole Symposium (August 24-26) for indications of the direction of US interest rates. This limits SET upside. The investment strategy is for "Selective Buy". |
| Trading today |
Weekly portfolio: The SET is seen to have limited upside. While there is progress in domestic political factors, the market remains pressured by risks associated with the global economic slowdown. The investment strategy is “Selective Buy” as follows: 1) Highlighting eight standout stocks across four industries where earnings are expected to grow both HoH and YoY - PTT, BCP, KCE, HANA, BDMS, BCH, AOT, and ERW. 2) Stocks paying an interim dividend on 1H23 profit with ~2% yield – SPALI (XD on Aug 22), LH (XD on Aug 24), HTC (XD on Aug 24) and AH (XD on Aug 29). 3) For risk-tolerant investors seeking to speculate, choose stocks that are expected to benefit from returning fund flow - KBANK, GULF, CRC, and HMPRO.ฅIn the short term we recommend avoid investment in 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), Beverages (CBG, where sugar plays a leading role in cost), and Food & Agriculture (CPF and GFPT). |
| Daily Focus |
TOP: 2H23 earnings are expected to improve HOH, driven by better market GRM on increased crack spread for diesel and jet fuel amidst strong seasonal demand and low global inventory levels that will widen product spread.ADVANC: Earnings in 3Q23 are expected to grow both YoY and QoQ thanks to eased competition in mobile and FBB, along with a growing customer base. Price will decline today as it goes XD for an interim dividend payout of Bt4, and this is seen as a buying opportunity. |
Today’s reports |
BTS – Restructuring investments to stop bleedingSIRI – 2Q23: In line with extra gain |
