สวัสดีตอนเช้า - 20 มิ.ย. 2567 รีบาวด์ช่วงสั้น แต่กรอบบนจำกัด

The SET signalled a rebound yesterday and today is expected to continue a short-term rebound. However, overall technical indicators are still negative, and politics and fund flow direction still pressure, limiting the upper bound with resistance between 1310-1315; supports are at 1290 and 1280.

• UK inflation in May was at 2%YoY for the first time in 3 years, but price pressures remain strong, suggesting the BoE is likely to wait awhile longer before starting to cut interest rates.
• Chinese automakers are urging the government to retaliate against EU's measures to restrict Chinese EVs by raising import tariffs on gasoline vehicles from Europe. Meanwhile, BofA has warned three US automakers to exit the EV market in China as soon as possible.
• The board of the State Railway of Thailand approved in principle three double-track rail construction projects spanning 678km with a total budget of around Bt165bn, up from the previous Bt138.5bn.
• Thailand's industrial confidence index in May fell for the second month due to fragile domestic purchasing power, economic uncertainty, high household debt and high oil prices impacting production costs.
• The BoT governor proposed limiting the digital wallet scheme to only around 15mn holders of state welfare cards instead of distributing to all 50mn Thais aged 16 and up, to better aid those truly in need.
• The Prime Minister announced the FY2025 budget with projected GDP growth of 2.5-3.5%, headline inflation of 0.7-1.7% and a current account surplus of 1.5% of GDP; he hopes the digital wallet policy will broadly stimulate the economy.
• ThaiBMA sees negative factors including stock market volatility, delayed government spending, economic slowdown and high interest rates as impacting the high-yield bond market, especially for firms lacking creditability that have been downgraded and lack governance. However, they see the second half outlook as clearer and maintains its Bt100bn new issuance target.

In the short term, political instability is keeping the SET volatile and fragile. On Jun 18 the constitutional court did not reach a verdict on cases for the Move Forward Party and for the Prime Minister, both of which it will decide in July. This will keep the SET underperforming the region amid expectations of continued weakness in automobile production and exports. Industrial production in China and the US is expected to continue recovering and the BoE is expected to keep interest rate at 5.25% but to signal an easing in monetary policy in 3Q24. Our strategy is “Selective Buy”.

Political risk is making the Thai capital market volatile and fragile and leading the SET to underperform the region. We recommend “Selective Buy” with four main themes:
1) Global plays: Companies whose profit is expected to continue to recover and benefit from a global recovery sufficient to offset domestic turmoil – KCE, SCGP and PTTGC.
2) Stocks whose 2Q24 profit is expected to grow YoY and QoQ, with attractive valuations and who are players in industries that have been able to outshine the market YTD – ICT: ADVANC; Tourism: MINT; and Food: TU, BTG and OSP.
3) Stocks expected to benefit from the EURO 2024 football competition between June 14-July 14, 2024, - ADVANC, TRUE, CPALL, MINT and TU.
4) Tension has eased about the situation in the Middle East, leading Brent down to the lower bound of US$80-90/bbl, which is seen as an opportunity to hedge. For high-risk takers, we recommend an upstream oil stock – PTTEP.

BEM: The Ministry of Transport has ordered EXAT to accelerate investment on the Bt35bn double-deck project. We see this as upside to target price, while a cut in toll to not more than Bt50 in exchange for a 22-year 5-month concession is not expected to affect short-term profit as it will reduce profit share to EXAT.
TU: An earnings play. 2Q24 profit is expected to grow QoQ on seasonality and YoY on improving processed seafood and animal feed businesses plus no loss from Red Lobster. Valuation is attractive, currently trading at 2024F PER of 14.7x, lower than -1 SD of 10-year historical average of 16x.