MarketWatch

THERDSAK THAVEETEERATHAM
Executive vice president / Research
Asia Plus Securities

Third-quarter results (99 per cent of market cap) fell 3.4 per cent year-on-year and 6.4 per cent quarter-on-quarter, lower than expected due mainly to profit shrinkages in banking, finance and insurance and provision in the energy sector. Thus, we’ve revised down our 2017 profit estimate to Bt974 billion from the earlier projection of B990 billion. Next year’s EPS growth is forecast to be no less than 10 per cent. The SET Index made corrections for the past one month after jumping over 150 points. We see it being affected by concerns over US tax policy, Thai earning results and declining crude prices. The SET Index is forecast to make a gradual recovery and test a resistance line at 1,725-1,730 points.
We prefer stocks with positive sentiment and expected growth for the fourth quarter both year-on-year and quarter-on-quarter. Late this year’s fiscal stimulus will likely benefit retail and personal loan groups. Likely stimulus for tourism will support the hotel business. Our picks are COM7(FV@Bt21) for expectation of 54 per cent year-on-year and 49 per cent quarter-on-quarter earnings growth the fourth quarter, SAWAD (FV@Bt80) for estimated 28 year-on-year and 25 per cent quarter-on-quarter rises in fourth-quarter earnings and ERW ([email protected]) for 33 per cent year-on-year and 73 per cent quarter-on-quarter earnings growth in the quarter.
This week, we will follow the US Senate on US tax reform and Thailand’s November 20 announcement of third-quarter GDP. Thai growth is expected at 3.8 per cent year-on-year in the third quarter and 3.8-4 per cent this year. Next year’s growth is forecast at 4%.

PRAKIT SIRIVATTANAKET
Vice president
Kasikorn Securities
Despite foreign invetors’ continued net sales of Thai stocks for six days, there has not yet been signs of capital outflow, reflecting from the baht, which appreciated the most in two years and seven months at 32.91 per US dollar. This reflects foreigners’ cessation of investment in the SET but their money is still circulating in the country.
Foreign sales are expected to be thinner in the SET after low foreign ownership at 32.12 per cent of total market cap, nearly the lowest in 10 years. KS Research expects foreign investors to cease their investment throughout November and December and resume buying in January 2018. This could trigger market corrections and, the SET Index could come close to 1,680 points. This is a buy opportunity for profit taking, when the SET Index tests 1,760 points next year.
On November 20, if third-quarter GDP growth comes close to or higher than our estimate of 4 per cent, markets will give positive response and the SET Index could surge again.
We like stocks with 3Q17 earnings momentum and 4Q17 bright profit outlook (TISCO, AEONTS, HMPRO, TCAP, PTTGC, IVL, COM7, MTLS, GUNKUL, STEC and ROBINS).
The industrial estates investment cycle is upward already (AMATA, WHA, TICON) and the next group for an upward investment cycle is the construction group (STEC, CK, UNIQ, SYNTEC, PYLON and SEAFCO). We pick STEC and PYLON.
Banks will likely outperform the market and we prefer BBL and TISCO. We also like hotels and hospitals, given their high season in the fourth quarter. Our picks are CENTEL, MINT, ERW, BDMS and BH.