ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก Daily231215_T Must break 1400 to look good |
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Market today | The SET recovered outstandingly yesterday, but today may see some deceleration at a strong resistance at 1400, which it needs to break through to turn technical indicators positive. Without this, the SET is lackluster overall. Short-term supports are at 1370 and 1360 and a fall below would be bad. | Today’s highlights | • The ECB and BoE decided to maintain their policy interest rates at 4.5% and 5.25% respectively, as anticipated. However, they will continue with a tight monetary policy stance in 2024, differing from market expectations that the ECB might lower interest rates in 1H24.
• US retail sales for November increased 0.3%MoM and 4.1%YoY, outdoing expectations of a 0.1%MoM decrease. Initial unemployment claims in the US last week fell to 202,000, the lowest since October and below expectations.
• Brent crude oil futures rose by 3.2%DoD, reaching US$76.61/bbl after IEA forecast that global oil demand will increase by 1.1mn bbl/day next year, an increase of 130,000 bbl/day from the previous forecast.
• The BOI reported on the Prime Minister’s visit to Japan to participate in a trade seminar and attract investments in 5 key industries. Discussions were held with seven major automakers and 40 leading businessmen to encourage investment in the Landbridge project.
• The Excise Department suggests using mandatory sector mechanisms to help reduce global warming and supports tax measures, including studying a carbon emission tax. The SET wants listed companies to disclose carbon emission data to enhance transparency.
• The Ministry of Finance has instructed the SEC to consider abolishing trading programs if they are found to impact the stock market negatively. The SET is currently in a slump, considered an internal factor, but the overall economy remains strong.
• SCBEIC says the Thai economy is vulnerable due to uneven recovery across business sectors. Additionally, low-income households and small businesses still face high debt with slow income growth. External and internal factors, including uncertain government policies, need to be monitored closely. | Strategy today | In the short term we see markets may rise on a more dovish view from the Fed: interest rate has peaked and the Dot Plot indicates a 75bps cut, more than the previous expectation of 50bps, and the US economy is forecast to grow by 1.4% in 2024. This is good news for the SET, particularly when it may also benefit from fund inflow into TESG and RMF funds as they open for sale this month. | Trading today | Weekly portfolio: The SET is focused on selective investment in stocks with specific drivers and probable fund flows from TESG funds in December. We recommend “selective buy” in themes with specific drivers:
1) Big-cap stocks in SET50 expected to be selected as investment targets as the TESG fund is set up. We use two criteria to select stocks in the SETESG index: 1) ESG rating of “AAA” or “AA” and 2) prices are down more than the SET YTD – SCGP, OR, CPALL, BEM, GULF, CRC and HMPRO, we also suggest a stock with ESG rating of “A” and down more than the SET YTD – AOT.
2) Big-cap stocks in SET50 placed in the SETESG with a rating of “AAA” and outperforming the SET YTD, with strong profit and dividend yields greater than 5% - PTT and KTB.
3) Those looking for long-term dollar-cost-average (DCA) investment as we see it as best after a sharp drop in the SET, as risk is low and stock prices are undervalued; on this theme we recommend BBL, BDMS, BEM, CPALL, PTT and SCC, all SET100 stocks and leaders in their industries. They are also included in the SETESG index with ESG rating of “AAA” or “AA” and valuations are below 10-year historical mean with steady profit.
In the short term we recommend being cautious on stocks that are expected to be materially affected by the planned raise in the minimum wage, set to be discussed in the Dec 12 cabinet meeting: Courier Services (KEX), Food (CPF, ZEN, GFPT and TU), Real Estate (LPN and PSH) and Electronic Components (HANA). In the medium term we recommend being cautious on stocks that are set to be affected by El Nino, which will erode purchasing power in the agricultural sector: Finance (MTC, SAWAD), Automotive (SAT, STANLY), Beverages (CBG has high sugar cost) and Food & Agriculture (CPF GFPT and BTG).
Special Report: Take a look at our Thai language Yearbook 2024 “A Year of Value Investing”, highlighting a very undervalued Thai capital market that is offering a good opportunity for long-term investment with 10 selected top picks for 2024. | Daily top picks | BCP: Listed on the SETESG Index with an “AAA” rating. 4Q23 operating profit is expected to grow QoQ on booking a full quarter of ESSO’s operations and higher volume of crude oil for distillation after annual maintenance in 3Q23. Valuation is not expensive with PBV of 0.7x, lower than the 10-year average of -1SD.
AP: Listed on the SETESG Index with an “AA” rating. 2023 net profit is expected to grow 6.2%YoY to Bt6.24bn, reaching a new high, while 4Q23 profit is expected to grow solidly YoY and slightly QoQ from backlog transactions of Aspire Pinklao-Arun Amarin and The Address Siam-Rachathewee. Dividend yield is expected to be 6% | Today’s reports | PTTEP – 5-year plan still displays solid growth | | | Click here to read and/or download file Daily231215_E |
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