TISCO Securities pointed out that in the 4th quarter, Thai stocks have limited increase due to company profits – slow economic recovery.
Date 03 Sep 2021 at 11:54 a.m.
TISCO Securities pointed out that Thai stocks run out of a downtrend But there is not much opportunity to increase Because the economy and profits of listed companies are slowly recovering, expected in the fourth quarter, the appropriate level of Thai stocks is at the range of 1,595 – 1,643 points.
Mr. Apichart Phobunjerdkul senior director Strategic Analysis Division TISCO Securities Co., Ltd. said that the epidemic situation in the country started showing signs of improvement in late August, both the number of new infections and the daily death toll that gradually declined. There is an increasing number This caused the problem of bed-tightness to begin to subside as well. As a result, the state began to relax the first phase of lockdown measures on September 1 and TISCO Securities expects to gradually increase the lockdown periodically throughout this period of 1-2 months. Vaccines in August accelerated significantly, averaging 452 lakh doses per day, a jump from the previous month’s average of 2.50 lakh, with progress in vaccine procurement plans, with AstraZeneca most recently confirmed to accelerate deliveries. Complete 61 million doses of vaccine by the end of the year. As a result, the total supply of all vaccines at the end of this year has exceeded 120 million doses, covering more than 60 million people. Thailand is expected to be able to build a group immunity by the end of this year. Support the trend of opening the country from the beginning of next year onwards
Mr. Apichart said that although the hope of the epidemic situation and the vaccine procurement plan improved It will help support the Thai stock market this round has rebounded past the level of 1,600 points again from capital flows, but TISCO Securities believes that the Thai stock index (SET Index) may not go far or lack stability. Because 2 key fundamental factors that often determine the trend of the SET Index are the number of economic growth (Economic Growth) and profits of Thai listed companies (Earnings) that are still slowly recovering. Based on two models of TISCO Securities regarding the relationship between GDP and earnings of listed companies on the SET Index, TISCO Securities assessed the appropriate SET Index level for Q4/2021 at 1,595 – 1,643. This year’s market upside is still relatively limited.
“Although hopes of the epidemic situation and a better vaccine procurement plan will help support the SET this round can rise past the level of 1,600 points due to capital flows, but TISCO Securities believes that the SET Index may not go far. Or lack of stability because 2 important fundamental factors that often determine the trend of the SET Index are economic growth numbers. and profits of Thai listed companies Still recovering slowly Especially in Q3/21, which was heavily affected by the outbreak, while Q4/21 will depend mainly on the issuance of economic stimulus measures from the government. TISCO Securities forecasts that GDP This year will grow only 0.6%. Estimated overall market profit (SET EPS) this year at 84.7 baht per share and next year at 95.5 baht per share, so it is estimated that the appropriate SET Index for the 4th quarter of 2021 is at 1,595 – 1,643 points,” said Mr. Apichart.
For the US Federal Reserve (FED) meeting this month, TISCO Securities expects the Fed to signal a reduction in QE tapering from the current $120 billion a month. Before it was officially announced at the November meeting and actually started the reduction in December, which is faster than before. This is expected to start in January next year. However, TISCO Securities does not think that the FED’s QE Tapering this time will put significant pressure on the stock market as in 2013 due to 1. The FED has communicated with the market. Throughout the past 2 – 3 months that QE Tapering will begin, but it is unclear when the process will begin. This is different from 2013 (“Taper Tantrum 2013”) which had no forward signal. and more than 87 billion baht, continuing from last year that flowed 260 billion baht. 3. Thai stocks still rose very little compared to the world stock market. (Underperform) Since the beginning of 2020, the start of the COVID-19 crisis, the SET Index has increased only 3%, compared to the MSCI World Index, MSCI EM Index and MSCI Asia ex. Japan Index, which has increased 30%, 14% and 18% respectively, so it is unlikely to face much volatility.
Mr. Apichart said that for the investment strategy for this month. Investors are advised to focus on stocks related to re-opening and expect to benefit from additional government stimulus measures on consumption and investment for the remainder of the year, financial groups recommend AEONTS. and SCB, the Commerce-Retail group recommends COM7 and the CRC. Others recommend STEC and SPA. Also, the SET100 export stocks supported by specific factors are CPF and HANA. Therefore, the top stocks recommended in September are AEONTS, COM7, CPF. , CRC, HANA, SCB, SPA and STEC. This month’s key support levels are at 1600 – 1,610 points and the next support is at 1,585 points. Important resistances this month are at 1640 points. The next resistances are at 1,670, 1,690 – 1,700 points. points in order
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