Slowdown predicted even as Thai stock market rebounds
The Thai stock market rebounded this week, supported by the easing of US debt ceiling concerns and interest rate reductions.
Attention was focused on the economic figures of the US, Europe, and China, while Thailand monitored inflationary pressures, predicting a slowdown. Eight prominent stocks with good fundamentals and attractive prices were highlighted.
According to Watan Jitsomnuk, strategy analysis director of PI Securities, the US reported on Friday a higher-than-expected figure for non-farm payroll employment increase of 339,000 jobs, surpassing analysts’ expectations of 193,000. However, the average hourly earnings report expanded by 4.3% year-on-year (YoY), lower than the estimated 4.4% YoY, with the unemployment rate at 3.7%, worse than the predicted 3.4%.
In summary, after considering all the results, it was found that investors were leaning towards relaxation while maintaining a significant weight of approximately 75% in keeping interest rates at the same level for the upcoming Federal Reserve meeting in June.
However, statistically, the S&P500 has provided positive returns during the period of unchanged rates, reaching its peak after approximately three months. The S&P500 yielded an average return of 7% over three months and 13% over six months. This positive psychology has been transmitted to the Thai stock market. The rising US unemployment rate signals the beginning of a contracting economy, so it is necessary to closely monitor this factor.
For this week, the focus is on domestic factors, such as Thailand’s inflation report for May. Bloomberg estimates it at 1.55% year-on-year (YoY), which is relatively low and lower than the previous month's 2.67%. If the report indicates even lower inflation, it will be a positive factor for the Thai stock market, according to Krungsri Capital Securities Plc.
This week, the SET INDEX is expected to have positive momentum and may have the potential to adjust within the range of 1,525 to 1,560 points. Factors supporting this include the easing of the United States' debt ceiling and the relaxation of interest rates.
In addition, the Stock Exchange of Thailand (SET) index will reflect the increased political concerns. In terms of investment strategy, it is advisable to consider trading and choose top picks for the short term, such as PTTEP (target price 162), BBL (target price 190), KBANK (target price 160), CPALL (target price 72), and MAJOR (target price 21).
Three other recommended stocks:
BE8 (target price 91): Expecting positive interest rate outlook and combining the upward trend of technology, benefiting from AI technology advancements.
IVL (target price): Positive outlook on the European economy, better than market concerns, supporting upside potential and product demand.
TLI (target price 19.5): Continuous recovery of the domestic economy, supported by inclusion in the SET50 Index, with the potential for increased trading volume of +812 million baht (8 times the average daily trading value).
