Upward swing predicted in Thai stocks this week

Krungsri Capital Securities Plc expects the Thai stock market to swing upward this week thanks to China’s economic stimulus plans and the formation of Thailand’s new government.

The spotlight is also on the direction the US government will take with the key interest rate.

Stocks that stand to benefit from China’s stimulus plans are IVL, PTTGC, KCE, HANA, WHA and AMATA.

Stocks likely to benefit from an improved political situation in Thailand include CRC, MAKRO, ICHI and OSP, while stocks that could join the SET-50 index this week are TLI and WHA.

Highlights for this week are:

• HANA (target price 47.5 baht): Potential upside due to the artificial intelligence trend and China's economic stimulus.

• PTTGC (target price 59): Crossed its lowest point in the first quarter and shows signs of recovery, especially with China’s economic stimulus moves.

• TLI (target price 19.5): Entered the SET-50 index and benefited from the positive impact of adopting the new accounting standard IFRS17, reflecting improved financial performance.

Meanwhile, investors will be closely watching US Federal Reserve chairman Jerome Powell’s statement on key interest rates, with available data indicating a high probability of a 0.25% hike.

As for domestic factors, it is anticipated that Thailand’s export value for the month of May will show a contraction of 7.5% year-on-year, while imports may contract by 11% year-on-year, with a deficit of US$558 million. If the deficit exceeds expectations, it could exert continuous downward pressure on the value of the Thai baht and negatively impact foreign capital inflows.

Nevertheless, the SET index is expected to fluctuate within the range of 1,540 to 1,575 points this week. Top picks, meanwhile, include MINT (target price 42 baht), PTTEP (target price 162 baht), BDMS (target price 34 baht), and BBL (target price 190 baht).