SET to Shift Gears: Upside Ahead, But for How Long

Expert Analysis: Interest Rate Cut and Its Impact on the Economy

InnovestX believes that the interest rate cut is 50 bps above economists’ forecasts, indicating a slower reduction than expected. This move sends a message that the Fed is prepared to do whatever is needed to improve the labor market and maintain growth above potential in the long term.

In terms of global monetary policy, InnovestX believes that the interest rate reduction trend of the Fed will be the starting point for other central banks to start reducing interest rates, especially emerging market countries.

The Chinese economic numbers in August slowed down significantly, showing that the government’s stimulus measures are affecting the economic sector. InnovestX has revised its forecast for China’s economy to 4.8% this year and 4.5% next year.

Although the Thai stock market is expected to move in a sideways manner in the short term, it will be supported by the trend of falling interest rates and government policy to stimulate the economy. The appreciation of the baht in the short term will also have a positive impact on the Thai stock market.

Investment Strategies

1. Speculative Stocks with Technical Signs of Reversal: Investors who want speculative stocks that have technical signs of reversal and valuation that is still not expensive can consider buying and selling in PER and PBV lower than -1 SD. Recommended stocks include AOT, CRC, AWC, BCH, and GOOD.
2. Stocks that Benefit from the Flood Situation: Recommended for investors who want speculative stocks that have benefited positively from the flood situation. Stocks include HMPRO, GLOBAL, CPALL, BJC, DCC, and TASCO.
3. Stocks that Benefit from the Downward Trend in Interest Rates: Investors who want speculative stocks and expect to benefit from the downward trend in interest rates can consider the leasing group, real estate group, retail group, power plant group, and right group. Recommended stocks include MTC, AP, CPALL, GULF, LHOTEL, and DIF.
4. Stocks that Benefit from the New Vayupak Fund: Stocks that are expected to benefit from the new Vayupak Fund through stock selection include SET100 qualified stocks that pay good dividends and have a high ESG rating. Recommended stocks include KTB, BBL, BCP, ADVANC, and HMPRO.

Udomsirikul Sukit

September 2024 FOMC Econ Projection

Sources: FED