CGSI: SET Index, range 1315-1350, MPC expected to “hold” rates

HoonSmart.com >> CGSI Securities: The index was set sideways today in the range of 1,315-1,350 points The US stock market closed in the red zone, after the MPC meeting today, expecting “fixed” interest rates and the Federal Reserve meeting tomorrow, continuing to indicate higher interest rates. Interest rate trend It is expected that there will be a trend of lowering interest rates in September. Recommended stocks “KBANK-CRC”

CGS International Securities (Thailand) or CGSI from Trend Spotter summarizes the foreign stock markets and the Thai stock market trend today (August 21) as follows:

• Market Overview: The US stock market closed slightly lower (DJIA -0.15%, S&P500 -0.20% and Nasdaq -0.33%) as investors slowed trading. Ahead of the annual Federal Reserve meeting, which starts tomorrow (August 22-24), and which will include a speech by Jerome Powell, the Fed Chairman, the market is expected to continue to take cues regarding the direction of interest rate adjustments in US policy. The market expects that and the Fed is likely to cut interest rates in September. This is leading to a weaker dollar, a factor that supports gold prices to swing above the $2,500 level.

The US trading market is under pressure from energy stocks which fell by -2.65% after oil prices dropped by almost 1% due to: 1) the war between Israel and Iran has eased. As a result, market concerns about oil supplies have eased and 2) the economy in China has weakened demand for fuel.

• SET Index: The SET Index is expected to move sideways in the range of 1,315-1,350, and the Thai stock market will receive support from the strong baht. More investment capital from foreign investors is coming in after 1) the Eurozone CPI figures for July were in line with market expectations at +2.6% YoY, leading to the possibility of a rate cut by the European Central Bank and 2) the market expects the Fed to cut interest rates in September.

Today, watch the Monetary Policy Committee (MPC) meeting. The MPC is expected to “hold” interest rates after expanding GDP figures in Q2 2024/seeing the impact of the new government’s economic stimulus measures.

With the baht pressure lower and the tone of the meeting likely to be dovish, the market is anticipating the MPC's opinion on rate cuts.

• Recommended stocks

Key Bank : KBANK has the most aggressive NPL sales and management strategies among the Thai banks we studied. This should lead to KBANK having a lower loan loss reserve ratio in FY25-26 and strong EPS growth of 9.5-12.2% in FY25-26.
(Take Profit: 145.00 / Stop Loss: 136.00)

Convention on the Rights of the Child : CRC reported a normalized operating profit of 1.57 billion baht (-8.8% YoY, -37.9% QoQ) in 2Q24, 6% below our estimate and Bloomberg consensus due to higher taxes paid. We expect organic earnings to grow YoY in 2H24 due to lower interest and interest expenses from a lower base.
(Take Profit: 30.50 / Stop Loss: 25.25)

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