Outlook bright for Thai Stocks
Thai stocks today are facing selling pressure from foreign fund flows although market sentiment is expected to be positive due to the news of the US House of Representatives has agreed to suspend the debt ceiling.
In addition, it is expected that the US Federal Reserve will maintain interest rates in this month's meeting after the labour costs per unit declined.
Analysts at Krungsri Securities expect the Thai stocks index today to fluctuate between 1,510 and 1,530 points. But despite the positive market sentiment, continuous selling pressure from foreign fund flows (net sell of 100 billion baht worth of shares year-to-date) will likely lead to downward pressure on the index. Selective buying is therefore recommended.
The investment strategy for today is as follows:
BBL, KTB, TTB, KBANK, SCB, SAPPE, ICHI: Trending profits in 2Q23 are expected to continue.
AMATA, WHA, ROJNA, NYT: Automotive EV manufacturers establishing production bases in Thailand.
Expectations for stocks to enter the new round of SET-50 index:(TLI, WHA) / SET100 (AEONTS, AURA, BA, BTG, MBK, SISB, SNNP, TASCO, TLI).
Key factors to follow today:
With the debt ceiling now resolved for the time being, US stocks and oil prices have recovered, with the Dow Jones index increasing by 153 points (0.47%) to close at 33,062 points, while WTI crude oil price increased by $2.01 (2.95%) to close at $70.10/bbl.
The US non-farm payrolls figures, which indicate the strength of the U.S. labor market, will be released today, The consensus estimate predicts an increase of 180,000 non-farm payrolls in May, lower than the increase of 253,000 in April. The unemployment rate is expected to rise to 3.5% from 3.4% in April. If the increase in unemployment rate matches the forecast and job creation is lower, it will support the Federal Reserve's decision to maintain interest rates.
For next week, investors are advised to monitor the Thai inflation rate figures, which could continue to drop, especially the general inflation rate that is expected to fall from the high base of the previous year. The decrease in inflation will prevent domestic banks from raising interest rates, reinforcing analysts' view that the upward trend in interest rates is coming to an end, which will have a positive impact on the local finance sector.
