Recovery of Thai stocks expected, experts say
The Thai stock market is expected to recover this week following the selection of the Thai Speaker of the House and China's economic stimulus measures, Krungsri Securities reported on Monday.
If the Thai political situation becomes clearer, investors’ confidence in domestic stocks in the banking, retail, telecommunications and power plant is expected to improve, with prominent stocks including BBL, TTB, CPAXT, CRC, True, THCOM and Gulf .
Stocks that should benefit from China's economic stimulus measures are KCE, Hana, IVL, PTTGC, Amata and WHA.
Factors to monitor include Thailand's money supply figures as of July 5, with the market forecasting a +0.2% year-on-year increase from the previous 0.53%, and the core inflation rate, with the market forecasting a +1.4% YoY increase from the previous 1.55%.
As for international factors, the US Federal Open Market Committee (FOMC) meeting report for June is to be released on July 6 and on July 7, the non-farm payroll data for June and the unemployment rate will be announced. The market forecasts a 3.6% unemployment rate, down from the previous 3.7%, and an average hourly wage growth rate of 4.2% YoY, down from the previous 4.3%.
The Thai economy is showing signs of recovery, with both consumer and private sector investment expanding. The number of tourists continues to recover and the consumer sector stocks (BJC, CPALL, HMPRO) and commercial banks (BBL, KTB, KBANK, SCB) are viewed positively.
Investors this week will focus on the depreciation of the Thai baht, estimated at 0.2% YoY according to Bloomberg, and the selection of the Speaker of the House, which will take place on July 4. The stock market is expected to enjoy a boost should the Move Forward Party be able to secure the Speaker position.
Both the European Union and the US will release Production Manufacturing Index (PMI) reports on Monday, which are expected to show a contraction. Meanwhile, the US labour market report estimates the creation of 220,000 jobs and an unemployment rate of 3.6%, according to Bloomberg.
The Thai stocks index is projected to move in the 1,490 to 1,525 points range this week. Top picks for investment strategies include PTTEP target price (TP) at 162 baht, BBL (TP 190 baht), CPN (TP 83 baht), AOT (TP 82 baht), and KTB (TP 21.4 baht).
