| Range-bound, |
| Market today |
The SET is expected to be range-bound at 1,500 +/- 20 points, reacting mainly to domestic factors as external factors have less impact as US markets are closed for a long weekend. Follow at around 1,479. If it does not go below that, indicators are good. |
| Today’s highlights |
• DRT reported Jun 1-29 passenger statistics: These showed an increase of 5.62%, higher than May, after the Yellow Line opened for service; passengers on the Blue Line rose to 10mn trips to a 3-year peak on Jun 23, 2023. • EGAT plans for more efficient management of water and hydropower plants, watching dams at risk of low water levels, adjusting containment and drainage plans and ensuring sufficient reserves as El Nino approaches. • Keep an eye on negotiations by the Phue Thai party with the Move Forward party about the House Speaker, scheduled to be reported at noon today. • US CPI in May was up 3.8%YoY, slowing down from April’s 4.3%YoY; The Consumer Confidence Index in Jun by the University of Michigan was higher than expected and reached a 4-month high. • The US Treasury Secretary believes the US economy is able to keep the labor market strong while inflation is falling, even though the economy will continue to slow down. • EU CPI in Jun fell for the third month but investors still expect ECB to raise interest rate in July for the ninth time and may raise rate again in September. • WHO plans to tag the sweetener, Aspartame, commonly found in diet drinks and chewing gums, as a potentially carcinogenic substance, after research results came out. • Tesla announced an 83% YoY increase in the number of cars delivered in 2Q23, higher than expected. |
| Strategy today |
Even though the SET is likely to recover, upside is limited due to domestic risks, particularly with regards to politics: the opening of Parliament on Jul 4, fund outflows from financial markets that are weakening the baht, which affects investment in large-caps, and external risks such as concerns that central banks are signalling a continued rise in interest rates, which may bring on a global recession. We recommend “Selective Buy”. |
| Trading today |
Weekly portfolio: External and domestic risks continue to pressure, limiting the SET’s upside. We recommend “selective buy” in themes with positive drivers: 1) Stocks whose 2Q23 profit is expected to grow YoY – AOT, BBL, ADVANC, MINT, OSP, BDMS and BEM. 2) Stocks with strong fundamentals that are seen as having high dividend potential with 2023 dividend yield of over 5% - TISCO, LH and AP. 3) Stocks able to step back up a month after the sharp fall since the May 14 general election – BH, BTS, CHG and CPALL. 4) Stocks expected to benefit from a weakening baht – AH, NYT and ERW.In the short term we recommend avoiding investment in: 1) power plants and PTT group stocks as there is risk of a change in the energy price structure in the new government’s policies, and 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 & Agricultural (CPF and GFPT). |
| Daily Focus |
CPALL: 2Q23 core profit is expected to grow YoY from higher sales in the CVS unit and MAKRO, but fall QoQ due to seasonal factors. 2H23 profit will improve HoH from lower financial cost after completion of the refinancing of CPAXT debt at the end of April.BEM: The full opening of the Yellow Line will be a short-term catalyst to stock price, while 2Q23 and 3Q23 profit will improve QoQ and YoY from higher expressway traffic and more MRT passengers. It will also record dividend income from TTW and CKP. |
Today’s reports |
No InnovestX Equity report today |
