Kasikorn Securities Company Limited expects the Thai Stock Index to have support levels of 1,400 and 1,390 points this week, 15 – 19 January 2024, while the Thai Stock Index is still bearish, with resistance levels of 1,435 and 1,455 points. Although many markets are growing in Asia and there are several risk factors both domestically and internationally that need to be monitored.
The Thai stock index fell for most of last week. This can be seen from the fact that Thai stocks have been falling steadily since the beginning of the week following selling pressure from foreign investors and domestic companies. In particular, the news of Italian-Thai Development Public Company Limited's (ITD) request to defer bond repayments put pressure on the overall investment climate, resulting in a sell-off of shares in several industries.
This week, the Securities and Exchange Commission (SEC) warned holders of Series 5 ITD bonds to read the information carefully before exercising their rights at the January 17 shareholder meeting. ITD bonds will be paid this year, 6,800 million baht and another 8,700 million baht in 2025, for which the company will seek a moratorium on debt payments for 2 years.
Additionally, news that major investment banks in the US have downgraded 3 Thai bank stocks is a negative factor putting additional pressure on banking stocks. By Friday, January 12, 2024, the SET index closed at 1,413.53 points, down 1.01% from last weekend's level. Meanwhile, the average daily trading value was 41,215.73 million baht, down 11.99% from the previous week. The mai index rose 0.26% to close at 420.57 points.
There are factors to follow this week, including signals from foreign capital and the Bank of Thailand's (BoT) BOT policy brief, which may send some signals regarding interest rates. Political parties have come forward to express their views on interest rate cuts in Thailand since last week. In addition to helping the economy recover, you should follow the announcement of operational results of listed companies. Especially the results of the banking group in the 4th quarter of 2023.
Important US economic data includes retail sales, industrial production. Data on housing starts and secondary home sales in December. Including the number of people applying for weekly unemployment benefits. Meanwhile, other overseas economic data included Japan's December consumer price index. Including Eurozone and UK 4Q23 GDP numbers and December economic data from China such as industrial production, retail sales and fixed asset investment.
Head of the Capital Markets Trade Council of Thailand Kopsak Putrakul Results of the Investor Confidence Index (FETCO Investor Confidence Index: ICI) survey for December 2023 (surveyed between 20-31 December 2023) found that the ICI index remained at 137.00 over the next 3 months. Up 38.9% from the previous month is in the “hot” range.
Investors consider inflow of capital which is the most confidence boosting factor. This was followed by the recovery of the tourism sector and the government's economic stimulus measures. Meanwhile, a factor dampening investor confidence is the slowdown in the domestic economy. Following an increase in interest rates by the Federal Reserve (FED) and capital outflows.
International factors to watch include the easing of monetary policy in major economies such as the US and Europe due to faster-than-expected inflation. and China's economic stimulus policy
Additionally, geopolitical risks are also an issue to be addressed. The situation between Israel and Hamas, the unresolved conflict in Russia-Ukraine, and the election results in Taiwan on January 13, 2024, will be an important decisive point in the possibility of war between Taiwan and China.
In terms of domestic factors to watch, public investments are likely to expand less than expected due to the delay in the 2024 budget legislation, the export sector's recovery from global trade trends. There is more expansion. and the recovery of the tourism sector after Chinese investors came in less than expected.
Recently, according to Taiwan's unofficial election results, William Lai Ching-tae of the Democratic Progressive Party (DPP) is set to become the next president. He was well ahead of his rivals from the other two parties, after unofficial vote counts showed him with nearly 5 million votes. From the Kuomintang (KMT) and the Taiwan People's Party (TPP), the election results will raise tensions between China, Taiwan and the United States. Continue to monitor the situation
Advice on Diversification of Investment Risks
Words WongsubasavatCFA Deputy Managing Director Kasikorn Asset Management's Investment Management Division summarized its outlook on investment and portfolio management in 2024, noting that uncertainty from geopolitical risks will be the determining factor for the economy and investment direction in 2024. Policy implementation and weather fluctuations that can go wrong So, allocate assets carefully and diversify the risk. This will help the investors to generate income.
Only then does the central bank stop raising interest rates. This will cause investors to shift their focus to investing in asset classes. Bonds with long average maturities like long-term bonds are high-dividend stocks and gold
We believe that a diversified approach across the region is essential for Asian equity markets to capitalize on opportunities for domestic economic recovery. Additionally, as bond and deposit interest rates are likely to decline in 2024, investors will once again turn their attention to high-dividend-paying Asian stocks. The investment theme focuses on artificial intelligence (AI), climate change and ESG as long-term investments in the world.
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