สวัสดีตอนเช้า - 30 ก.ค. 2567 เคลื่อนไหวในกรอบ 1300-1315 จุด

The SET is expected to move between a lower bound of 1300 and an upper bound of 1315. Supported by the merger of GULF and INTUCH, we expect the lower bound to stand firm and recovery to the upper bound. However, a continued murky political scene and investors waiting for the FOMC meeting on Jul 30-31 limit the upper bound.

• US Headline PCE index for June rose 2.5%YoY and 0.1 MoM, while Core PCE index increased 2.6%YoY and 0.2%MoM, in line with market expectations.
• The US Treasury Secretary said emerging markets, including some G20 countries, are concerned about excess production capacity in China's industrial sector and will pressure China to change its economic model.
• Chinese authorities reported an increase in industrial company profits in June of 3.6%YoY and 3.5%YoY in 1H24. However, fuel imports fell 11% in 1H24, raising market concerns about sluggish demand in China, the world's largest oil importer.
• iPhone shipments in China in 2Q24 slipped 3.1%YoY, while android smartphone shipments grew 11% YoY. This pushed Apple out of the top 5 smartphone brands in China for the first time in four years.
• The Ministry of Commerce reported value of Thai exports in June 2024 of US$24.8bn, down 0.3%, while imports were US$24.6bn, rising 0.3%. The trade balance showed a surplus for the second month, of US$218mn.
• The Ministry of Finance revised 2024 GDP growth forecast from 2.4% to 2.7%, with potential growth up to 3%, supported by tourism and exports. The digital wallet project is expected to stimulate economic growth by 1.2-1.8%.
• The EV Board approved measures to reduce excise tax for hybrid electric vehicles (HEVs) with up to 10 seats from 2028-2032 for manufacturers using locally produced or assembled key components, supporting the transition to electric vehicles.

In the short term the SET is expected to rebound but with limited upside, awaiting 2Q24 earnings releases, which are expected to show growth, while waiting for clearing of the murky political skies. External factors are also expected to support a rebound after profit-taking in technology stocks last week: the Fed and BoE are expected to keep interest rates unchanged and 2Q24 earnings announcement of US listed companies are expected to be strong; China's economy is weak, and the technology war is expected to escalate. Our strategy is "selective buy".

The Thai capital market is expected to rebound but with limited upside, while waiting for clarification of domestic factors and 2Q24 listed companies' earnings releases. We recommend "Selective Buy" with four main themes:
1) Earnings plays: 2Q24 profit to grow YoY and QoQ and valuations are not expensive - MINT, BEM, OSP, TU, KCE, CPF, TRUE and AMATA.
2) Stocks expected to benefit from short covering after the uptick rule started on July 1, also with strong fundamentals with SETESG Ratings between AAA and A - DELTA, TOP, BEM, MINT and AOT.
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 attacks 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.

BBL: Price has fallen by 7%YTD, which we see as an opportunity to buy. Catalysts are: 1) Lower provisions (credit cost) for the rest of the year, 2) outstanding loan growth, 3) strong NIM and 4) lower cost-to-income ratio. BBL is still our top pick in the banking sector. Recommend buy for trading at not above Bt136/share.
KCE: 2Q24 core profit is expected to improve following the return of backlog orders and cost reduction efforts. It benefits from tariffs by the US and EU on China's EVs, and stock price lags compared to others in electronics components sector and PCB for vehicle manufacturers. Recommend buy for trading at not higher than Bt44.00/share.