ท่านสามารถอ่านและดาวน์โหลดเอกสารได้จาก Daily240724_T Limited recovery and weak signal
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Market today | Although the SET may recover after yesterday’s plunge with support from today’s announcement of the digital wallet, technical signal is still weak, which means recovery will be limited at resistances of 1310 and 1320. Supports are at 1294 and 1287 if the signal continues to be negative. | Today’s highlights | • WTI crude oil futures dropped 2% after Israel's Prime Minister said now is a good time for a ceasefire, ordering negotiators to begin new talks tomorrow.
• The cabinet approved maintaining electricity rates at Bt4.18/unit for September-December 2024, with a special rate of Bt3.99/unit for vulnerable groups using less than 300 units/month. The diesel price cap remains at Bt33/litre.
• The Ministry of Finance is preparing additional measures to stimulate the real estate sector, particularly the large inventory of unsold properties, pending cabinet approval.
• Today, the Minister of Finance will announce details of the digital wallet registration starting August 1. The Minister of Commerce said the distribution of the digital funds will begin in October, with plans to involve 150,000 Blue Flag stores and 7-Eleven in the project.
• Today, attention is on the Constitutional Court's scheduled consideration of the case to remove the Prime Minister.
• The Thai Hotels Association reports tourism from January 1 to July 14, 2024 improved from 2023, with over 18mn foreign tourists (+34%YoY). The top 5 nationalities are China, Malaysia, India, South Korea and Russia.
• The State Enterprise Policy Office reports the Ministry of Finance is considering a framework for selling shares held outside the Stock Exchange of Thailand, initially involving 25 companies worth Bt20bn. Some shares not only fail to generate additional income but also incur maintenance costs.
• Brazil announced its first outbreak of Newcastle disease in poultry in 18 years, leading to voluntary export suspensions and restrictions. If prolonged, this could be a positive for Thai chicken exporters (GFPT, CPF, BTG) who export to Japan, Europe, and China. | Strategy today | In the short term, upside is still limited, as the local political scene remains in turmoil. As well, the market is waiting for details about the digital wallet and 2Q24 earnings announcements, which are expected to show some growth. Externally, the market is expected to be supported by signals that interest rate will be stepped down, as the US PCE and PMI are expected to slow, plus strong 2Q24 earnings for US companies. However, fund flows returning to EMs may be limited by a weak Chinese economy and insignificant weakening of the US dollar, while the technology war is expected to escalate and may amplify risk on equities globally. Our strategy is “selective buy”. | Trading today | The Thai capital market is seen to have limited upside, still waiting for domestic clarification and now anticipating 2Q24 earnings announcements, while the escalating technology war is expected to raise risk globally for equities. 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 and TRUE.
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 - HANA, TOP, BEM, MINT, OSP, BBL 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. | Daily top picks | BEM: 2Q24 profit is expected to grow 16.3%QoQ and 9.4%YoY to Bt985mn, with growth continuing in 3Q24 both QoQ and YoY, with upside risk from the double- deck expressway and South Purple line projects, which are not included in the forecast.
CPALL: 2Q24 profit is expected to be Bt5.8bn, growing 31%YoY and outperforming the commerce sector, supported by higher sales, margin and contribution from CPAXT. 2H24 profit is expected to grow outstandingly YoY compared to peers, supported by strong growth in the CVS business and CPAXT. | Today’s reports | Bank – Review 2Q24: Miss on ECL, beat on NIM
Petrochemicals – Product spread movement mixed
BEM – The first of three victories
OSP – Preview 2Q24: Core profit up YoY, QoQ
SCGP – 2Q24: Results in line, ready to grow in 2H24 | | Click here to read and/or download file Daily240724_E |
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