Market Watch

Passakorn Linmaneechote
Deputy Managing Director – Research
Kasikorn Securities

Hope for continued capital inflows
We will follow the solutions to the US-China trade disputes after the G20 meeting, while also monitoring the US Purchasing Managers’ Index (PMI) for June due for release today (July 1). Attention will also be paid to the Opec meeting this week on crude production capacity, which will affect the global crude prices. Figures due for release on Wednesday (July 3) are likely to confirm that the US is expected to face a trade deficit of US$50 billion. And on Friday, we will be looking at the US labour market figures such as unemployment and non-farm employment.
In the meantime, we expect capital inflow to the SET with an estimated movement range of 1,715-1,765 points.
MINT: fundamental price of Bt44.0
BGC: fundamental price of Bt15.0
TRUE: fundamental price of Bt7.77

Saravut Tachochavalit
Senior Vice President, Research Department
RHB Securities (Thailand)

Follow up foreign capital movement
This week, the world is expected to follow up on the G20 summit, with Chinese media reporting that the US and China have agreed to temporarily halt more tariffs. Meanwhile, the results of the likely trade negotiations this July are very difficult to guess. Stock markets worldwide have already priced in this news. The Opec and non-Opec countries will meet today and tomorrow (July 1-2), with investors’ attention on an extension of the deadline for reduction of crude production capacity to December 31, 2019 from the previous deadline on June 30. The Iraqi Minister estimated a reduction of at least 1.2 million barrels although this could be more if proposed at the meeting. We expect Brent crude price to swing in a range of US$63-$68 a barrel on one month ahead. This will be positive for PTT, PTTEP, PTTGC and TOP. Besides, investors are keeping an eye on the Fed chairman who is scheduled to give economic information in the first half of this year and economic outlook in the latter half to the US Congress on July 10. We expect the Fed to signal a rate cut by 25 basis points in the FOMC meeting during July 30-31, which could affect continuous capital inflow in the Thai capital market and bond market. From June 1-27, about Bt47 billion worth of capital, as a result of MSCI rebalance, moved into the Thai stock market. About Bt20 billion of capital is expected to move into the Thai stock market this July. Industrial estates - AMATA and WHA and retailers like CPALL, MAKRO, BJC, ROBINS are expected to gain from the government’s economic stimulus. Food firms like CPF, GFPT, TFG, TU are expected to reap benefits from increased prices and power plants such as EGCO, RATCH, GPSC are expected to gain from a new round of investment.