สวัสดีตอนเช้า - 13 ส.ค. 2567 กรอบบนยังถูกจำกัด

The upper bound is limiting, with resistances at 1305 and 1310 as investors are waiting for the verdict on the case against the PM due tomorrow and US CPI tomorrow night to see a signal for the Fed's interest rate direction. Supports are at 1290 and 1280.

• China CPI in July increased 0.5%YoY, higher than market expectations and the strongest rise since February 2024, primarily driven by pork prices, which surged 20.4%YoY. PPI contracted 0.8%YoY, below market expectations, due to falling construction material prices.
• The government will announce fundraising for Vayupak Fund One, offering Type A investment units to promote domestic savings and investment, aiming to support the money and capital markets.
• The Deputy Minister of Finance plans to propose a National Credit Guarantee Association (NaCGA) to the Cabinet this month, to help small businesses and SMEs access credit more easily.
• The Minister of Finance has appointed a committee to draft laws to set up a financial center. The first meeting is in August, with the goal of making Thailand a regional financial hub to attract foreign investment.
• The US Department of Defence announced deployment of additional troops and military equipment to the Middle East to protect Israel amid escalating regional tensions.
• OPEC forecasts a global oil demand increase of 2.11mn bpd in 2024, down 135,000 bpd from July's estimate. In 2025, it predicts a 1.78mb bpd increase, below the previous 1.85mn bpd estimate.
• The Finance Ministry will hold a public hearing on the draft Integrated Entertainment Business Act on August 2-18. Operators with at least Bt10bn in registered capital can apply for a 30-year license, renewable every 10 years.

In the short term, the SET will continue to fluctuate as players wait for clarification of politics, with the Constitutional Court to hand down its verdict on the PM's qualifications on Aug 14, plus this week is the final week to report 2Q24 earnings. Abroad, there are US CPI and China manufacturing, which are expected to decline. The index already reflected these factors to some extent in an earlier correction. However, the SET is expected to recover once politics becomes clearer (expected to test at 1330 if the PM is deemed qualified and 1250 if he is not), and funds start to flow into EM markets. Our strategy is "selective buy".

The Thai capital market is expected to fluctuate while waiting for clarification on politics. However, there is hope for more fund inflows, now seen to be starting to flow back to EMs. We recommend "Selective Buy" with four main themes:
1) Earnings plays: strong profit momentum, with 3Q24 profit expected to grow YoY and QoQ and expected to grow YoY and HoH in 2H24, while valuations are attractive - DELTA, GULF, KCE, TU, BTG, BDMS, TRUE and BEM.
2) For risk-averse investors who wants to generate cash flow from their portfolio, we suggest dividend stocks for a short-term investment - BCP and OSP, both expected to pay a 1H24 interim dividend with yield of 2%.
3) Stocks expected to benefit from the adjustment of ThaiESG conditions that will raise the maximum tax reduction to Bt300,000 and reduce the holding period to 5 years - ADVANC, AOT, CPALL, BDMS, BBL, KTB and GULF.
4) Brent price has recovered as there continues to be attacks on cargo ships in the Red Sea and on energy infrastructure in Russia, although the Middle East conflicts remain fairly contained. We expect the price to be at US$80-90/bbl. Oil stocks are good as a hedge against risk. For high-risk takers, we recommend an upstream oil stock - PTTEP.

Daily top picks

PTTEP: Price performance still lags crude oil price, and ignoring its status as an asset hedging against conflict in the Middle East. Profit and balance sheet are strong. 2024 core profit is expected to be Bt82.7bn, up 5%. It may be a good time to buy as the stock goes XD today and price is likely to weaken subsequently. PTTEP is paying an interim dividend of Bt4.50/share.

CPALL: 2Q24 net profit is expected to be Bt5.8bn, growing 31%YoY and outperforming commerce sector, supported by higher sales and margin and higher contribution from CPAXT. 2H24 profit is expected to grow YoY, beating peers, backed by strong growth in CVS and CPAXT.

BCP - 2Q24: In line, with QoQ fall on lower GRM
BTG - 2Q24: Beats estimates on better margin
IVL - 2Q24: Huge loss caused by impairments
PTT - 2Q24: Above estimates on extra gains
RJH - 2Q24: Beat estimates on strong revenue
THRE - 2Q24: Beat estimates with a strong recovery
TIDLOR - Slash TP on rising asset quality risk
ZEN - 2Q24: Misses estimates on SSS, EBIT margin