Thai stocks, second half of 67, 7 prominent themes for the economic recovery, falling interest rates

Stock Column: Finance and Banking Journal June Issue (Issue 506)

“Pakorn” Manager of the Stock Exchange Saw good signs of the Thai economy, opening 7 industrial groups, low-priced stocks, opportunities to accumulate. Innovest Earnings grow benefit from falling interest rates Foreigners avoid retail stores, food, and packaging.

Mr. Phakorn Peetathawatchai, Director and Manager Stock Exchange of Thailand (SET)

Mr. Phakorn Peetathawatchai, Director and Manager Stock Exchange of Thailand (SET) Revealed that the recovery of the Thai stock market depends largely on the direction of the economy. It is believed that in 2568 the recovery will be more clear. As seen now, the economy is starting to improve. both from export factors travel and government spending This should improve Thai listed companies' ability to make profits as a result.

The next supporting factor is Measures from the government such as improving the conditions of the ThaiESG fund and upgrading various regulatory measures. To build confidence in the capital market The latest government measures Accept that it will have a positive effect on the capital market in the short term. But in the long run, it must come from the profitability of the listed companies themselves.

Interest rates are falling, the Thai economy is strong, supporting companies to raise capital.

In addition, Mr. Phakorn said that From the factor in the direction of world interest rates that are entering a downtrend. including the strength of the Thai economy It will help make it easier for Thai listed companies to raise funds. the entire commercial banking market bond market and capital market, which will encourage the business sector to recover faster This will help the Thai capital market recover in the next period.

while in the eyes of foreign countries Thailand is one of only a few countries in the world where the International Monetary Fund (IMF) predicts that its economy in 2567 will grow better than last year. and sees that the Thai economic trend this year has the opportunity to grow better from many parts Both the product export sector tourism sector as well as the production sector

Meanwhile, Thailand's financial sector is still strong. International reserves are high. The commercial banking system still has sufficient liquidity for lending. Investing in the bond market that have a proportion of investment grade or investment grade groups (Ratings from AAA to BBB- ) up to 93%, causing little risk. It can be seen that the Thai financial system is able to support economic recovery very well.

Moreover, Thailand's competitiveness has been ranked better. interest rate And Thailand's inflation is still low compared to many other countries. Foreign direct investment (FDI) has not increased much. but still gradually coming in regularly Meanwhile, Thai capital investing abroad has increased in growth rate. This shows that Thai listed companies cannot grow only in the country alone.

Mr. Phakorn also has the view that Domestic political problems do not affect investor confidence. and the profitability of listed companies is as much a factor as the economy. Because as long as the economic system recovers better It will result in the Thai capital market recovering faster.

Open 7 industry groups, low priced stocks, accumulation opportunities

Mr. Phakorn said Current stock prices in each Thai industry It is still lower than the historical average. Therefore, it is interesting to invest in a period when prices do not yet reflect future profits. There are 7 groups as follows:

1. Hospitality and Tourism Business related to medicine, tourism sector Whether it is about recreation, tourism, food, which is currently a Thai registered company. To be a leader in the industry related to Wellbeing at the global level, ready to support the recovery of tourism. Thailand has extended the visa free period. For tourists in many countries As a result, the number of foreign tourists has begun to return to strength. and it is expected that this year there will be 35 million people, similar to the pre-COVID period.

2. Government Stimulus Business related to government spending Currently, the 2567 expenditure budget has come into effect. This will cause government disbursement to accelerate during the rest of the year. This is expected to help stimulate domestic demand. And it is an opportunity in industries related to construction, retail stores, department stores. and consumer products Food and Drink

3. Relocation Opportunities Thailand can attract more foreign investment. stimulate economic growth Ready to embrace opportunities in target industries And since Thailand is neutral amidst the two world divisions, it makes Thailand attractive for foreign companies to move their production bases from countries in the conflict group to invest in Thailand instead, such as automobiles, electrical appliances, metals, and businesses. Digital side

4. Global Play Listed companies have expanded their business to different regions. There is a continuous increase in the proportion of income from abroad. In 2022, 335 listed companies disclosed total foreign income as high as 5.81 trillion baht.

5. Sustainability Thai listed companies grow strongly and is an internationally recognized leader in sustainability. Businesses that have opportunities are businesses related to sustainability.

6. Dividend Play Businesses that invest in large stocks with high liquidity and pay dividends regularly

7. Transition to New Economy Thai registered company Adapt to new business opportunities In various industries, approximately 20% are operating businesses related to the new economy, such as Digital and E-commerce, Medical for future, Biofuels and Biochemical, Next-Gen Automative, Technology and innovation, Avance Agri and food, Robotic and Creative Tourism, etc.

However, Mr. Phakorn said that There are still risks that need to be monitored. including geopolitical problems, world inflation and interest rates, economic recovery in various sectors and dealing with social impacts and environment

InnovationX gives a SET target of 1,500 points.

Mr. Sittichai Duangrattanachaya, Senior Strategist for Thai and International Stock Markets Investment Strategy Department Innovation Exchange Securities Revealing the investment strategy for the third quarter of 3, there will be a shift from investing in growth stocks to value stocks and cyclical stocks. Technology group not included This is because the recovery of the world economy has helped confidence improve.

Even though the Thai stock market continues to lose investment weight (Underweight) but the earnings trend will continue to recover. along with political tensions that have subsided and government disbursements that have accelerated It will be a supporting factor in terms of fundamentals. This allows the Thai stock market to rise, narrowing the large gap between the best performing markets (Taiwan, India) and the worst (Thailand, Indonesia).

In the third quarter, for the Thai stock market, the SET Index target is estimated at 3 points. We recommend waiting to buy at levels below 1,500 points. For outstanding stocks in the third quarter, we recommend stocks whose operating results are likely to continue to recover and benefit from the global economic recovery. Rather than depending on the uncertain growth trend of the domestic economy, ADVANC, KCE, OSP, PTTGC and TU assess that the Thai economy is likely to recover from budget disbursements that accelerate in the second half of the year. Including the manufacturing and tourism sectors. The Thai economy is forecast to expand 1,300% in 3 and 2.5% in 2567.

Positive signs that foreigners are refraining from collecting Retail, Food, Packaging

UOB Kay Hian Securities (Thailand) It was revealed in the analysis that in the first half of the year foreign investors net sold Thai stocks approximately 1.11 billion baht. However, it was not foreign investors who abandoned Thai stocks. But choose to buy in each industry. There will be an increase in holdings (when looking at Foreign ownership = Foreign holding + NVDR). From the beginning of 2567, there will be increased holdings in the automotive, communications, and medical sectors, and in the past 2-3 months. There are beginning to be positive signs in the retail, food, packaging and travel sectors. Therefore, we advise investors to focus on individual selection.

UOB Kay Hian Securities estimates that foreign investors have little opportunity to sell. But still the view is that the return to purchase will likely occur in early 2568, rather than this year. The value of the baht will become more stable after the difference in policy interest rates between the US and Thailand. narrowed to a certain level It is estimated that this will occur after the Federal Reserve (Fed) cuts interest rates approximately 2-3 times. Therefore, in the short term, stocks in the communications, packaging, food and electronics groups It will still be an interesting group for investment and speculation.

For disclosing the list of stocks that can be sold short. that will have a reduced number Due to the new criteria, the market cap of stocks must be larger to 7,500 million baht from the original 5,000 million baht. In addition, short selling will be more difficult due to starting to use a price that is higher than the last trading price (Uptick Rule), which is expected to cause There is strong buying back in stocks that still have a short position that has not yet been bought back, such as EA, TOP, BEM, IVL, KTC, SPRC, COM7, TIDLOR, IRPC, MINT, CBG, OSP.
Recommended top picks for the second half of the year: ADVANC, BSRC, BTG, CK, CPALL, CPF, KBANK, MTC, OSP, SCGP, TIDLOR and TU.

SCB CIO recommends accumulating Thai stocks is the main port

Mr. Sornchai Suneta, Deputy General Manager Head of Investment Office and Product, Wealth Business Group, Siam Commercial Bank

Mr. Sornchai Suneta, Deputy General Manager Head of Investment Office and Product, Wealth Business Group, Siam Commercial Bank Revealed that SCB CIO recommends to investors Consider investing in the Thai stock market in your main investment portfolio (Core Port), which is a long-term investment portfolio, considering that the Thai stock market index has long-term supporting factors. 5 main issues that support the Thai stock index are:

1. Government budget disbursement in 2567 That accelerated by approximately 39% in early June 2567 and is still likely to continue increasing. Help support the expansion of the Thai economy in the next period.

2. Value or Valuation of the Thai stock market Still at an affordable level Close to the COVID-19 period

3. Performance of listed companies in 2567 It is expected to expand by approximately 14% compared to the same period last year.

4. The value of the baht is likely to strengthen in the second half of 2567. After the US Federal Reserve (Fed) lowered the policy interest rate. It will help support more capital flowing back into Thailand.

5. Announcement of the start of the Uptick Rule measure or allowing short sales of stocks only at prices higher than the market price. The latest (Uptick) from July 1, 2567 onwards, which is expected to help reduce market volatility. This is because it is more difficult to conduct short sales transactions during a down market.

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