Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Macroeconomics

<ul><li>The consensus estimates Thai inflation at 7.95% YoY in August vs. +7.61% YoY in July.</li><li>If the inflation figure is as high as expected, the MPC may raise interest rates by 0.25% to 1.00% in its meeting on September 28, 2022.</li><li>We expect the potential rate hike in September to be the last one for 2022E given the softening of inflationary pressure after oil prices peaked out and the end of the low base effect from September onward.</li></ul>

The consensus estimates Thai inflation at 7.95% YoY in August vs. +7.61% YoY in July.If the inflation figure is as high as expected, the MPC may raise interest rates by 0.25% to 1.00% in its meeting on September 28, 2022.We expect the potential rate hike in September to be the last one for 2022E given the softening of inflationary pressure after oil prices peaked out and the end of the low base effect from September onward.

High August CPI May Prompt MPC to Hike Rates

Cross Asset Strategy

<ul><li>The SET Index is expected to move sideways up, with the resistance at 1,639/1,642 points and the support at 1,613 points (25/200-day EMA) /1,605 points.</li><li>Global equity markets are being pressured by concerns that the Fed will expedite rate hikes to tackle inflation; US bond yields have continued to increase, which is negative to growth stocks.</li><li>Investors expect the Fed to hike the fed funds rate by 0.75% in the upcoming FOMC meeting in September.</li></ul>

The SET Index is expected to move sideways up, with the resistance at 1,639/1,642 points and the support at 1,613 points (25/200-day EMA) /1,605 points.Global equity markets are being pressured by concerns that the Fed will expedite rate hikes to tackle inflation; US bond yields have continued to increase, which is negative to growth stocks.Investors expect the Fed to hike the fed funds rate by 0.75% in the upcoming FOMC meeting in September.

<ul><li>The Fed will remain hawkish despite lower inflation in July (Core PCE at +4.6% vs. 4.8% in June), which will weigh on the growth in the economy and labor market.</li><li>There have not been clear signals indicating whether the Fed will hike rates by 50 or 75 bps; CME's FedWatchTool still expects a hike by 75 bps.</li><li>Markets viewed the Fed's messages as a negative surprise (S&P 500-3.4%, DJIA -3.0%, NASDAQ -3.9%).</li></ul>

The Fed will remain hawkish despite lower inflation in July (Core PCE at +4.6% vs. 4.8% in June), which will weigh on the growth in the economy and labor market.There have not been clear signals indicating whether the Fed will hike rates by 50 or 75 bps; CME's FedWatchTool still expects a hike by 75 bps.Markets viewed the Fed's messages as a negative surprise (S&P 500-3.4%, DJIA -3.0%, NASDAQ -3.9%).

Fed Remains Hawkish; Market Expects Rate Hike by 75 Bps

<ul><li>The SET Index is expected to move sideways down, with the resistance at 1,642/1,650 points and the support at 1,624/1,612 points.</li><li>We recommend trading buy on ASIAN, TTB and COM7.</li><li>Technically, the index may weaken to 1,600 points if it is unable to surpass the previous resistance at 1,642 points within one or two days; the loss-stopping point should be at 1,612 points (200-day EMA).</li></ul>

The SET Index is expected to move sideways down, with the resistance at 1,642/1,650 points and the support at 1,624/1,612 points.We recommend trading buy on ASIAN, TTB and COM7.Technically, the index may weaken to 1,600 points if it is unable to surpass the previous resistance at 1,642 points within one or two days; the loss-stopping point should be at 1,612 points (200-day EMA).

<ul><li>Net Profit growth of 160 SET-listed firms forecast to average at +31.3% YoY and +21.5% QoQ</li><li>Retail, finance, food, media, tourism and transportation sectors projected to show YoY and QoQ growth</li><li>The SET may face profit taking as the positives, e.g., the Fed's softer stance and the upbeat view on 2Q22E earnings, have been priced in.</li></ul>

Net Profit growth of 160 SET-listed firms forecast to average at +31.3% YoY and +21.5% QoQRetail, finance, food, media, tourism and transportation sectors projected to show YoY and QoQ growthThe SET may face profit taking as the positives, e.g., the Fed's softer stance and the upbeat view on 2Q22E earnings, have been priced in.

Sell on Fact as Positives Already Absorbed

Thailand

Com7 Public Company Limited is a Thai retailer primarily engaged in selling IT products, mobile phones, and accessories, including desktop computers, laptops, and various lifestyle devices. The company also offers repair services for IT gadgets and financial services for mobiles. Founded in 2004, its headquarters are in Bangkok, Thailand.

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Com7 (COM7-R TB)

High August CPI May Prompt MPC to Hike Rates

The consensus estimates Thai inflation at 7.95% YoY in August vs. +7.61% YoY in July. If the inflation figure is as high as expected, the MPC may...

Krungthai XSpring

Market Outlook

The SET Index is expected to move sideways up, with the resistance at 1,639/1,642 points and the support at 1,613 points (25/200-day EMA) /1,605...

Krungthai XSpring

Fed Remains Hawkish; Market Expects Rate Hike by 75 Bps

The Fed will remain hawkish despite lower inflation in July (Core PCE at +4.6% vs. 4.8% in June), which will weigh on the growth in the economy...

Krungthai XSpring

Market Outlook

The SET Index is expected to move sideways down, with the resistance at 1,642/1,650 points and the support at 1,624/1,612 points. We recommend...

Krungthai XSpring

Sell on Fact as Positives Already Absorbed

Net Profit growth of 160 SET-listed firms forecast to average at +31.3% YoY and +21.5% QoQ Retail, finance, food, media, tourism and...

Krungthai XSpring

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52-week Range

Market Cap (USDm)

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