Kasikorn Securities I think US inflation has passed its peak. After June inflation came out 9.1%YoY, although in the 3rd quarter of 2022, inflation remained high, but will gradually decline in accordance with the direction of the decreasing energy and the 4th quarter will continue to decline due to the slowdown in the real estate sector.
Including the view on interest rate hikes, including Fed Fund Futures, Eurodollar that started to adjust the outlook in 2023, may start to see interest rate cuts. Even at the next meeting, around July 27, the market has already received a price in the 0.75% interest rate hike and is expected to have a 1% chance.
Overall, although interest rates are starting to see that next year will not Hawkish inflation starts to decline, but KS estimates that the stock market in the third quarter will not reverse up. It is expected to recover in the fourth quarter of this year.
The index is seen as a sideway swing as it will still be pressured by recession concerns.
It is recommended to gradually accumulate investments in the following groups:
1. Anticommodity groups such as CBG, OSP, RBF, CPF, GFPT, TOA and PTG.
2. Defensive stocks such as GPSC Power Plant Group, BGRIM, GULF, BDMS Hospital Group
3. Growth Group recommends Tech Consult groups such as BE8, BBIK, IIG.
4. Travel groups recommend hotels CENTEL, SHR
For domestic factors, the group of commercial banks must follow the report next week. and the direction of the baht once morest the dollar The latest is still depreciating at 36.5 baht, or regarding 10% since the beginning of the year (ytd), assessed as pressure on large stocks such as energy groups, commercial banks. In addition, discussions of no confidence in the government must be monitored on July 19-22.
Assessing the Thai stock market index, the SET will move in a frame of 1,525-1585 points. Recommended stocks are:
– GULF (basic price 48.00 baht) It is a defensive stock that can hedge concerns, recession, and government bond yields that are reaching their peak in the third quarter of 2022 along with inflation. Recently, Thai10Y bond yield has dropped to 2.6%, down from 3.1% since mid-June 2022.
And the outlook for profit in the second quarter of 2022 will grow QoQ because the ERC has increased the Ft for the 2nd round of 2022 (May-August 2022) at 0.234 baht/unit to 0.248 baht/unit, which is expected As a result, PEA’s electricity bill will increase by 6% to 4.00 baht/unit, and most recently, the ERC revealed that the Ft for the Sept.-Dec. 2022 period may be increased by 90-100 satang per unit.
– PTG (basic price 17.00 baht) Profit for the 2nd quarter of 2022 at 400 million baht, growing 150% QoQ, driven by high GPM / liter and expected high oil sales volume of 7% QoQ, support SG&A / liter to decline.
Expect profits in the second half of 2022 to grow better than the first half of the year. From the opening of the city, the current PTG share price Valuation is somewhat reflected from the 2023 PBV at 2.29x below -1SD, contrary to the return to normal results and positive sentiment from lower energy prices.
Economic issues worth following
– July 18: Home Builders Association (NAHB) Housing Market Index (Jul)
– 19 Jul: Net foreign purchases of US bonds (May), number of US building permits reported (June), market expected 1.69 million units, European consumer price index (CPI) ( year on year) (June), the market is expected to stabilize 8.6%YoY and 0.8%MoM.
– Jul 20: European Current Account (May), Existing Home Sales (June), market expected 5.4 million units, crude inventories.
– July 21: The European Central Bank (ECB) meeting is expected to maintain the deposit rate of financial institutions deposited with the central bank (Jul) at -0.5%, the central bank business conditions index. Philadelphia (Jul)
– July 22: Purchasing Managers’ Index (PMI) for US manufacturing (July), purchasing managers’ index (PMI) for manufacturing (July) for Europe.