TISCO Securities pointed out that Thai stocks are at risk of correction after the Fed signaled financial austerity. Worried about inflation-bond yield Suggested as an opportunity to buy to receive the opportunity for the Thai economy to recover in the next 6 months from 3 government measures “Open the city – stimulate tourism – expand the public debt ceiling to support the government to accelerate spending “
On October 1, 2021, Mr. Apichart Phobunjerdkul senior director Strategic Analysis Division TISCO Securities Co., Ltd. said that the results of the US Federal Reserve (FED) meeting on September 21-22 ago. More hawkish signals, with the Fed likely to begin cutting back on asset purchases (QE tapering) soon, and the prospect of the Fed’s future policy interest rate (Dot Plot) in September indicates that The Fed will raise interest rates three times in 2023, from the previous meeting that expected two hikes, and has also signaled that it may raise rates three more times in 2024.
After the Fed’s tightening stance, the yield on the 10-year US bond (10Y US Bond Yield) responded by surging past 1.5%, its highest since June. The rise in US bond yields (Bond Yield) even reflects the outlook for the better economy. and forecast an increase in inflation in the future But at the same time, it increases the discount rate used for valuation of various financial assets.
From this point, the TISCO Economic and Strategic Analysis Center (TISCO ESU) estimates that bond yields of 1.7-1.8% or higher may pressure global stock markets. including Thailand, the base adjustment Based on an extremely tight valuation level based on an Earning Yield Gap (EYG) of around 3%, the lowest level in more than 10 years.
However, if Thai stocks have a correction from the aforementioned issues TISCO Securities sees it as a timing to gradually buy as it has a positive outlook on economic recovery and profits of listed companies in the next 6 months. from the positive factor is
(1) Gradual loosening of lockdowns and plans to open the country in each phase
(2) The return to stimulate domestic tourism through the project “We Travel Together” Phase 3 and “Thailand Travel Tour”
(3) An extension of the public debt ceiling to 70% of GDP indicates that the government is ready to give further stimulus to the economy going forward. Therefore, we look at the volatility of the FED’s monetary policy adjustments and the potential for a correction in the economy. Global stock markets from rising bond yields will be a time to buy accumulators.
In addition, mid-October to mid-November is the season to announce the third quarter earnings. The results of listed companies did not turn out as bad as the market worried. And there may be a chance to grow compared to the previous year (YoY) because the overall profit base of listed companies in the 3rd quarter of last year is still relatively low. from the contraction of the global economy and the decline in commodity prices. due to the impact of last year’s outbreak
Compared to the previous quarter (QoQ), listed companies’ earnings may stabilize or decline slightly. Because there should be a profit from the energy and petrochemical groups to help support the important Benefit from high oil and commodity prices (Brent crude oil prices in 3Q21 averaged around $73 per barrel, up +69% YoY (YoY) and +6% QoQ (QoQ).
For outstanding stocks in October, we will focus on stocks with good budget expectations. And the price of the base has already come down before There is a chance to recover. Recommended BBL, JWD, MTC, SFLEX, SMPC, SPALI, SPRC and TWPC. The key support this month is at 1600 points and the next support at 1,590 points. The key resistance is at 1640 points and the next resistance. go to 1,660 points respectively
