The Thai stock market (SET) weakened to support at 1,615 – 1,620 points, following the rise in crude oil prices. In addition, the risky sell-off before the European Central Bank (ECB) meeting today is expected to begin to reduce QE, affecting volatile fund flows. While strong buying speculative stocks’ Q3 budget Support the index switched rebound.
On October 28, 2021, Krungsri Securities (Krungsri Securities) expects the Thai stock index (SET) to weaken at support by 1,615 – 1,620 points, following negative factors. Crude oil prices collapsed after US crude inventories rose 4.3 million barrels.
Coupled with risk mitigation selling before the European Central Bank (ECB) meeting today, it is expected that QE will start to reduce, which will cause fund flow to fluctuate. Expect the 3Q21 budget to grow, helping the index rebound.
For today’s factors, SCC or The Siam Cement Public Company Limited reported disappointing 3Q21 net profit, shrinking 60% QoQ and 30% YoY. 3Q21 net profit of 6.8 billion baht, down 60% QoQ and 30. % YoY, and still below our expectations, 20% and 30%, as a result of the contraction in the three businesses (Petro, Cement and Packaging), which was affected by the Petrochemical spread. and declining demand from the impact of the Covid-19 virus. In addition, there was an extra cost of 3.6 billion baht from the impairment of investment in the cement business in Myanmar.
WTI crude fell more than $1.99 (-2.4%) to close at $82.66 a barrel. After the Environmental Impact Assessment (EIA) reported weekly crude inventories increased by 4.3 million barrels, contrary to analysts’ expectations for a decrease of 100,000 barrels, as well as investors gradually reduced their risks to wait for the OPEC Plus meeting. (OPEC+) next week (4 Nov 21)
For today, following the ECB meeting, the policy rate is expected to remain unchanged at 0%, despite the eurozone’s latest inflation rate of 3.4%, a 13-year high, and above the ECB’s target of 2%. However, this is a temporary factor. We expect the ECB to keep its interest rate unchanged at 0%, but the QE line of 1.85 trillion euros. It is possible that the ECB will gradually reduce its acquisition limit and end the project on 31 Mar. page
Krungsri Securities recommended stocks to watch today, namely HMPRO or Home Product Center Public Company Limited, closing price at 14.7 baht per share, recommended buy / target price at 16.5 baht per share, past the lowest point of the year. already since Q3/21 and will begin to see a recovery in profit since 4Q21, reflected through SSSG that has started to return to 10-15% positive since Sept. City opening (70% of revenue comes from Bangkok and tourist cities)
and the other is JMT or JMT Network Services Public Company Limited, closing price at 49 baht per share, recommend a buy / target price according to the IAA Consensus at 57 baht per share, showing debt purchases that exceeded the target by 9M21. The debt was bought 80% of the full-year target at 6 billion baht. The 3Q21 budget is expected to grow QoQ and YoY despite the obstacles from the lockdown in 29 provinces, while the gross profit margin (GPM) is still rising from Many debt piles have already cut costs.