Country Group Securities (CGS) expects that the SET Index this week has a chance to rise within the range of 1,615-1650 points, with valuation in the attractive spot gradually accumulated for the medium term. On Friday, the U.S. non-farm payrolls report rose 5.3k, beating analysts’ expectations of 450,000, in line with the unemployment rate that fell to 4.6%, better than analysts. Expected at 4.7% after the results report Dow Jones Industrial Average hits all time highs again
However, yields on US 2- and 10-year Treasury yields fell significantly. Such signals may indicate that the market is starting to ease concerns about supply-side inflation. In fact, after reporting stronger economic numbers than analysts expected. Bond yields should be higher.
At the same time, if you look at the prices of commodities, you will find that they are starting to adjust as well, such as freight, coal, as well as the direction of crude oil prices that are starting to see new highs.
However, we believe that the direction of medium-term US bond yields tends to go up rather than down. But the short term is positive for the stock market and commodity cost sector (BGC CBG EPG SCGP TASCO).
As for factors this week: (1) The announcement of the earnings of listed companies in 3Q21 will start to enter the Domestic Play group. Because it is expected to come out close to analysts’ expectations. Or if it’s lower than expected, it won’t have a very effective effect because the market will give more weight to the recovery.
(2) Monetary Policy Committee (MPC) meeting on Nov 10 We and the market expect the meeting to keep the policy rate unchanged. By looking at the matter of interest does not have any effect But what should be noticed is the resolution of the meeting. If it remains similar to the past, the unanimous vote to keep interest rates unanimous would be a sign that policy interest rates are likely to have bottomed out. This will be positive for the commercial banking sector (BBL KBANK SCB), benefiting from economic expansion and better interest spreads.
(3) US Inflation (CPI) to be announced at night in Thailand time, Bloomberg expects +0.5%MoM +5.9%YoY.
Therefore, investment strategy, Bank Group (BBL KBANK SCB) is attractive in both short-term and medium-term, while the valuation SET has receded, resulting in currently trading only 16.5x, within the average range of +1SD in the past 5 years. After being viewed as a cumulative point for medium-term investment, especially in domestic sectors such as retail (BJC CRC CPALL HMPRO), electric train (BTS BEM), out-of-home (PLANB VGI), stocks have specific positives (CBG, PTG, SCGP).
BBL (buy / target price Bt162) earnings are expected to recover from Q4/21 onwards, driven by business loan expansion and better asset quality, resulting in lower provision for next year. Moreover, the current share price is trading at 0.5xPBV65E, which is relatively cheap, coupled with an attractive dividend yield of 4.6%.
PLANB (BUY / target price Bt7.2) Expect earnings to pass the lowest point in Q3/21, with a strong recovery in Q4 onwards, driven by a return to private advertising spending after loosening the lockdown Recognition of revenue from newly installed billboards and expected recovery in sports-related revenue
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