Outlook for Thai stocks mainly positive
The Thai stock market is expected to continue recovering this week as optimism grows about the formation of a new government, Krungsri Capital Securities' Research Department assistant director, Thakrit Chatcherdsak, said on Monday.
The recovery is expected to be supported by US Federal Reserve’s meeting regardless of whether interest rates remain unchanged or increase once again. Stocks most likely to benefit from rising interest rates are in the technology sector (components, ICT, digital tech, power plants), with prominent stocks including HANA, GPSC, BE8, and ADVANC, and in the retail and beverages sector, namely CRC, Makro, ICHI, and OSP .
Stocks entering the SET-50 index with profit potential are TLI and WHA. The projected index range is 1,535-1,587 points.
Recommended stocks this week:
• ICHI (target price 17.2): Accelerated sales, projected to achieve peak profitability. Stock valuation still lags behind earnings.
• WHA (target price 5): Accelerated foreign direct investment recovery; anticipating profit surge before being announced as part of the SET-50.
• Makro (target price 48): 2nd quarter profits expected to improve year-on-year and quarter-on-quarter, despite decreased electricity costs.
According to Watan Jitsomnuk, director of Strategy Analysis at PI Securities, the key factors that investors will weigh are the Federal Reserve's meeting (FOMC) on June 14 and the outcome of the meeting on June 15. About 75% of the market expects the Fed to maintain interest rates at the current level of 5.25%.
As for the situation in Thailand, analysts say it will be important to monitor the flow of foreign capital after the net selling position, including short positions in the TFEX (Thailand Future Exchange) of around 20,000 contracts. The formation of the new government has also raised concerns for investors, as it could exert pressure on the Thai stock market, although the market will focus more on the easing of interest rates.
The SET index this week is projected to move within 1,545 - 1,575 points range. Recommended stocks are AOT (target price 82), BBL (target 190), TIDLOR (target 32), KBANK (target 160), CPALL (target price 72), and MINT (target price 42).
