The Thai stock index was bright in March, receiving investment from the investment sector after the government quickly disbursed the budget according to its plan. It is a positive factor for economic recovery. Inflationary pressure is expected to decline. This makes it likely that the interest rate will fall by 0.50% in the second half of the year. In addition, the free visa procedures attract tourists. Supporting retail hotel and airline stocks including construction activity, it is believed that the gradually released SET measures will absorb the fund's money. The flow has returned and brokers expect it to be above 1400 points.
Although it has begun to emerge that some research offices have lowered the target figure for Thailand's GDP, there are still expectations of increased government spending. Especially in the investment sector, after the new budget law there is an opportunity to pass it faster. Including government measures to support tourism, this is the main factor that will support increased investor confidence. Especially the country's general investors. At the same time, the Stock Exchange of Thailand has begun to adapt and become more active, whether it be measures to limit short selling or programmed trading transactions, including disclosing various important information. The latest is extending or increasing stock trading hours.
Most securities analysts believe that this will support money flow to become more positive. As a result, we believe the March stock index will be bright. Causing the stock index to move above 1,400 points, believed to be some retail, hotel and construction stocks. Including airline stocks to get good results from government measures
Mr. Apishart Vopanerdkul, CISA, Senior Director, Strategic Analysis Department, Tesco Securities There is a view that after the growth trend of the Thai economy declined this year and the profits of most companies in the fourth quarter of 2023 came out worse than expected. As a result, the Thai Stock Index (SET Index) is gaining a new foothold. There is a moving frame from 1,350-1,405 points, where TISCO Securities is starting to see 5 positive signals that will help support the SET index to recover until it can break out of the upper frame at 1,405 points.
Among the 5 positive factors supporting Thai stocks are:
(1.) Thai interest rates tend to adjust downward. Because although the Thai economy forecast for this year has been lowered to nearly 3%, it is still the best growth rate in 5 years, and the 2024 budget is expected to be disbursed during May, which will be a positive factor for the economic recovery. .economy this year At the same time, inflationary pressure is expected to decline, which may lead to a 0.50% interest rate cut in the second half of the year. Every 0.25% reduction in interest rates will open up the possibility of an appreciation of about 45 points or +3% for the Thai stock index.
(2.) The market is beginning to accept the fact that the Fed (Federal Reserve) will be slow to lower interest rates. The Fed's first rate cut took place from May to June. The chance of interest rate cuts this year has shrunk to just 3 times, which is equivalent to the Fed's expectations in December and early this year when the market expected up to 6 cuts.
(3.) The Chinese stock market and the Chinese economy continue to recover, and after the Chinese New Year, the Chinese stock market has recovered significantly. The Chinese authorities are responding by issuing gradual measures to continuously stimulate the economy. The recovery of the Chinese economy and stock market is also a positive hope for the Thai stock market. Because in addition to the correlation of the Thai economy with the Chinese economy at a high level, after the outbreak of the Covid-19 epidemic or since 2021, the movements of Chinese and Thai stock markets have a more positive relationship, so TISCO Securities recommends following the meeting of the National People's Congress (NPC) of China on 5 March to set goals and economic direction in 2024.
(4.) Raising the level of supervision of short selling and using computers to send orders (software trading) to the stock exchange. TISCO Securities sees the stock exchange's new procedures. It will help increase market stability in the long term. It should stimulate buybacks in the market in the short term. Because we are starting to see foreign sales pressure slowing, alternating with buybacks. Until it returned to accumulating net purchases of approximately 3,000 million baht for the first month of the year, in line with the influx of capital that was more distributed to emerging markets (EM) in the region, and all seven markets (South Korea, Taiwan, India, Malaysia, Indonesia, the Philippines and Thailand) with Inflows amounted to about $10 billion in February. This is the fourth consecutive month of influx.
(5.) The reduction in earnings per share (EPS) estimates for the Thai stock market has crossed its lowest point. Although most of last quarter's financial announcements were worse than expected, as Q4/2023 earnings for many large stocks were wiped out by losses in several special items. As a result, the reduction in EPS estimates in 2024 and 2024 may have already passed the low point. We began to see signs of EPS estimates being revised slightly in late February. “Some stocks are showing signs of raising earnings estimates and stock price targets. There should be an opportunity to adjust in a better direction than the market. (Outperforms)”
Therefore, TISCO Securities still favors stocks that are expected to benefit from the recovery in domestic consumption and tourism. Besides stocks with unique positive factors, in brief, the outstanding stocks recommended by TISCO Securities in March are BDMS, CENTEL, CPALL, CRC, MINT, SCB, TTB and TU. The important support and resistance levels for the SET index in March this year are at 1370-75, 1350 and 1405, 1430-40 points respectively.
Mr. Netshat McMasin, Assistant General Manager, Securities Analysis Department, Trinity Securities Limited He revealed that the Thai stock market in March 2024 is expected to see a rebound from February. Evaluating the SET movement framework this month, there will be a first support level at 1,370 points and an important support level at 1,340 points, on the other hand, we evaluate the first resistance level at 1,410 points and an important resistance level at 1,440 points. Strategically, we recommend investors find time to accumulate Thai stocks at the index area of 1,370 points or lower.
In this regard, there are many supporting factors, namely: the introduction of visa exemption procedures between Thailand and China, and this would lead to the arrival of a greater or lesser number of Chinese tourists. There are expectations of an increase in government spending, especially in the investment sector. After the new budget law, there is an opportunity to approve it faster. Throughout March we are expected to continue to see positive developments from the House and Senate, in addition to rising investor confidence. Especially the general investors in the country after the SET began to adapt to be more active, whether it is related to measures to limit transactions, short selling or programmed trading, including the disclosure of various important information, the flow of funds that should start has returned to be more Positive. After passing the MSCI index basket adjustment at the end of last month. This time, the Thai stock market came under slight pressure in the MSCI EM 5 Index. The Thai stock market valuation basket fell into an interesting territory, which was reflected by the earnings yield gap that continued to increase and the relative P/E between Thai and ASEAN stocks. Stocks that have already fallen below average and lower earnings expectations for Thai listed companies are likely to come to a temporary end. After the festival announced the results of the fourth quarter of 2023
Interesting stock groups for this month are those that have seen strong momentum in 2019 earnings forecast revisions over the past month. Most of them are groups associated with the arrival of foreigners and increased movement of people, such as hotel groups such as MINT, CENTEL and ERW, retail groups such as CPALL, CPAXT and BJC, and hospital groups BDMS and BH. BCH, PR9 and ADVANC, TRUE connection groups
Mr. Narongdit Chanthabeesarn, Director, Securities Analysis, AIRA Securities He revealed that the March SET index still has a tendency to fluctuate or trend sideways, but it is starting to be limited. This is reflected in the majority of listed companies (companies) announcing almost all of their financial statements. As with the 2023 GDP numbers, the numbers were lower than expected. The market has already heard the bad news. The possibility of the index falling below the level of 1400 points and continuing the decline for a long period. It's hard for that to happen. Because the Thai stock market currently has a very cheap valuation, as evidenced by the P/E trading at -1SD.
However, the SET index's rise in March is still highly dependent on capital inflows from abroad. There is an opportunity to see additional buying pressure for profits by looking at the March SET at 1380-1440 and 1460 points.
As for the investment strategy for March, it is recommended to gradually group stocks with strong performance trends from the first quarter of 2024 onwards, especially stocks in two groups consisting of retail, recommending CPALL and CPAXT, and the beverage sector. Operating results are expected to be strong heading into the peak season, and ICHI and SAPPE are recommended.
Mr. Phadun Wanarat, Assistant General Manager, Securities Analysis Department, Yuanta Securities (Thailand) The index framework for March is expected to move in the range of 1,380-1,440 and 1,450 points following two important events that are expected to influence Thai stock market sentiment: The progress of the 2024 national budget is likely to accelerate towards the end of March (originally April), which will be a factor supporting the index to adjust upwards. The US Federal Reserve meeting in mid-March will tell us which direction interest rates will head. The Federal Reserve is expected to continue maintaining interest rates. But if there is a signal of interest rate cuts, it will be a positive sentiment for the stock market as well.
As for the investment strategy, the SET index has begun to decline in a limited way. Therefore, this is a good time for investors to gradually accumulate stocks in the form of Q4 2023 results or FY 2023 results that show good growth and are likely to continue growing in 2024. Still giving weight to the domestic wage group as the main focus, And recommend CPALL, BEM, CK, THCOM etc.
KGI Securities (Thailand) Public Limited In March, it is recommended to focus on investing in the global economy. Such as travel and budget acceleration stocks, including PTTGC, SPRC, AAV, AOT, CPALL, CK and STEC. Keep in mind that interesting stocks to invest in next month are global cyclical stocks linked to the global economic recovery trend. And fiscal stimulus measures in China, choose PTTGC and SPRC. As for stocks that will benefit from the strong recovery in tourism since the beginning of the year, especially from the increase in the number of Chinese tourists, choose AAV, AOT, and CPALL, which are stocks linked to government investment. Which will benefit from progress in the process of considering the Budget Law 2024 this month chooses CK, STEC.
Asia Plus Securities Limited When evaluating the Thai stock market in March, it is believed that the SET index will be calmer and move in the range of 1,350-1,430 points from two main factors: March did not have any major factors weighing on the main market. At the US Federal Reserve's March 22 meeting, the market expects interest rates to remain at 5.5% and is more than half-weighted on the possibility of a rate cut in June, including appreciation implications. Adjustment: Profits of listed companies decreased slightly.
In addition, after the stock exchange called for confidence in the Thai stock market. By issuing solutions to short selling problems and the trading program, including increasing trading hours from 4 and a half hours per day to 5 hours per day. It is expected that this will help support the trading value to gradually rise until the trading value returns to more than 70% annually, including foreign fund flows into Thai stocks in the coming period. Including that, the Council of Ministers rushed to disburse the budget two weeks faster, and it is expected that it will enter into force at the beginning of the second quarter, which will enhance the gross domestic product in the second quarter to return bright again, with the clarity of government consumption that has occurred, therefore, and investment will focus on stocks. Based on consumer, construction and building materials groups, therefore, the share price is expected to outperform again after that.
For investing, we recommend stocks that have 3 themes: Stocks that receive government action. Beginning to expand free permanent visa procedures for China and Kazakhstan, good for AOT, BDMS and CPN, 2024 budget disbursement period accelerates, signaling SCCC and stocks are preparing for a downward interest cycle, dividend stocks SPALI, MTC, as well as stocks expect Chinese economy to recover Soon
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