| Upside still limited, politics heated. |
| Market today |
Upside is seen as limited with the first resistance at a previous high of 1,545. Breaking through this would be a good sign in the short term with a near resistance of 1,555. Investors are weighing continued uncertainties regarding the next government, starting to heat up before the third round of voting for PM on Thursday, with supports of 1,517 and 1,510. |
| Today’s highlights |
• The BoT released measures to sustainably resolve household debt on Jul 21. We do not expect the measure to significantly affect commercial banks and only slightly affect non-bank operators. AEONTS is expected to be affected the most. • OSMEP reported a 2Q23 survey of 2,600 SMEs and found that 59.7% have more debt, with 53.4% reporting revenue insufficient to meet expenses and less liquidity from a 9-12% rise in interest rate. • REIC reports the 2Q23 operator confidence index is still lower than optimal on worries of rising financial cost. The 6-month forward index recovered on expectations of a new government and stimulus packages. • Chinese stimulus packages this year are expected to be limited, going by this year’s growth target of below 5%. • The UN warned Russia that withdrawing from the grain export deal via the Black Sea with Ukraine will cause 362mn people in 69 countries to face starvation. • The BoJ has not changed its monetary stance, leading the yen to continue weakening. |
| Strategy today |
In the short term the SET is still waiting for the formation of a new government, while external factors related to the world economy are starting to relax to some extent. Watch the FOMC, ECB and BoJ monetary policy meetings this week. The Fed is expected to raise rate 25bps, expected to be this year’s final step up, and already in the market. We recommend “Selective Buy”. |
| Trading today |
Weekly portfolio: The SET is pressured by domestic factors, with some easing in external factors. We recommend “selective buy” in themes with positive drivers: 1) Stocks whose 2Q23 operating results are expecting to continue growing YoY and QoQ – BBL, ADVANC, BEM and GULF. 2) Speculative stocks whose 2Q23 operating results are likely to beat market expectations – HMPRO and SCGP. 3) For investors who can handle risk, speculate in stocks in case the political scene shifts – CPAXT, BJC, TNP, AMATA, OSP, HTC, KCE and HANA.In the short term we recommend avoid investment in: 1) Food (TU, CPF GFPT and BTG), which is seen by the market as likely to be downgraded as 2Q23 profit is expected to weaken QoQ and YoY; 2) stocks expected to be affected by El Nino in 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) and 3) Tourism stocks that may be negatively affected by politics. |
| Daily Focus |
GULF: 2H23 core profit is expected to grow YoY and HoH from new generating capacity of IPP power plants (1,325MW) starting up in Mar and Oct 2023, and booking of profit share from the US natural gas power plant since Mar 2023. 2023 core profit is expected to grow 32%YoY.ADVANC: Overall competition in the mobile phone business continues improving. 2Q23 profit is expected to return to growth QoQ and YoY. ADVANC plans an interim dividend after releasing 2Q23 results, expected at Bt3.5/share. |
Today’s reports |
Bank & Finance – Household debt measuresKBANK – 2Q23: Beat on gain; delayed normalized ECLKKP – 2Q23: Worse asset quality than expectedKTB – 2Q23: Beat on NIMKTC – 2Q23: In line, with sign of rising NPLs |
