ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก Daily240703_T Pressured by politics
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Market today | The SET’s indicators are still weak, facing political uncertainty and fund outflows, meaning the index is likely to continue to decline with next supports at 1280 and 1270. There may be some rebound in the short-term with a limited upper bound, resistances at 1300 and 1306. | Today’s highlights | • The Fed Chairman noted significant progress in bringing inflation back to target, but wants more confidence that inflation is sustainably moving towards 2% before easing monetary policy.
• US job openings in May increased to 8.14mn, higher than market expectations. However, layoffs also rose to 1.65mn.
• The US National Hurricane Center reported that Hurricane Beryl, a Category 5 storm, is moving through the Caribbean. It's expected to weaken to a tropical storm as it enters the Gulf of Mexico later this week.
• GM reported 2Q24 US car sales increased to 696,000 units, the highest since 4Q20, driven by demand for EVs and pickups. Tesla reported 2Q24 deliveries of 440,000 vehicles, exceeding market expectations and 1Q24 figures, pushing its stock up 10.4% in one day.
• The Thai National Shippers' Council warned of risks to Thailand's exports in 2H24 due to a 300% increase in shipping costs. They recommend government oversight of production costs to maintain export competitiveness.
• ThaiBMA reported an improved bond default situation this year compared to last year. In 1H24, there were 3 defaults totaling Bt1.1bn, with 9 cases totaling Bt18.8bn receiving payment extensions. In 2H24, Bt440bn in bonds will mature. | Strategy today | In the short term, the SET is still fragile and range-bound as it waits for clarification of domestic politics. On July 3, the constitutional court will schedule consideration of the dissolution of the Moving Forward Party and on July 10, the court will consider the Prime Minister’s qualifications. There are also issues from overseas: China, EU and US manufacturing and services PMI in June, which are expected to range from stable to up slightly from last month. Our strategy is “Selective Buy”. | Trading today | Thai capital market is seen to still be fragile and range-bound while waiting for some political clarity and a new catalyst. We recommend "Selective Buy" with four main themes:
1) Stocks expected to benefit from short covering after the SET implements the uptick rule on July 1 and which also have SETESG ratings between AAA to A - HANA, TOP, BEM, MINT, OSP, BBL, SCGP and AOT.
2) Stocks expected to benefit from changes in conditions for the ThaiESG fund: raising deductions to up to Bt300,000 and reducing the holding period to five years - ADVANC, CPALL, BDMS, BBL and BEM.
3) Global plays whose profit is expected to grow and which benefit from global economic recovery over domestic plays, which face multiple uncertainties - KCE, SCGP, TU and MINT. (We recommend buy KCE and SCGP on price dips upon pressure from weak Chinese economic figures).
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. | Daily top picks | CPALL: 2Q24 core profit and same-store sales are expected to grow YoY, outperforming peers in the Commerce sector. The stock is seen as undervalued, trading at 2024F PER of 21.6x or -2S.D. of 10-year historical PER, opposite to the growth in profit: 2024 core profit is expected to grow 28% on higher sales and margin and lower financial expense.
KTB: 2Q24 profit is expected to be Bt11bn, growing 7% from higher NIM and non-NII. Valuation is attractive, dividend yield high and asset quality risk low. Profit is expected to recover from lower credit cost and there is upside from NIM (current monetary stance expected to stay around) and with higher dividend yield likely. | Today’s reports | Bank – 2Q24F: Slipping QoQ and YoY
Commerce – Weak sentiment and heavy rainfall hit SSS
Petrochemicals – Naphtha cost still on the rise | | Click here to read and/or download file Daily240703_E |
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