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.

Cross Asset Strategy

<ul><li>Bank of America's December 2024 Global Fund Manager Survey, conducted among 204 firms with total AUM of USD518bn between December 6-12, 2024, revealed super-bullish sentiment.</li><li>This is characterized by a record-low allocation to cash and a record-high allocation to US stocks, driven by optimism about US economic growth and expectations of a Fed rate cut.</li><li>KTX anticipates a negative outlook for Asian stock markets, including Thailand (except Japan), with a higher likelihood of investment weight reductions if Trump 2.0 accelerates the implementation of tariff increases on Asian countries after officially taking office on January 20, 2025.</li></ul>

Bank of America's December 2024 Global Fund Manager Survey, conducted among 204 firms with total AUM of USD518bn between December 6-12, 2024, revealed super-bullish sentiment.This is characterized by a record-low allocation to cash and a record-high allocation to US stocks, driven by optimism about US economic growth and expectations of a Fed rate cut.KTX anticipates a negative outlook for Asian stock markets, including Thailand (except Japan), with a higher likelihood of investment weight reductions if Trump 2.0 accelerates the implementation of tariff increases on Asian countries after officially taking office on January 20, 2025.

FMS Increases Investment Weight in US Equities to 36% Overweight, Reflecting a Super-Bullish View

Thematic (Sector/Industry)

<ul><li>The latest MPC meeting signaled that there is no urgency to cut the policy interest rate, despite pressures from the government or the downward revision of the inflation forecasts for 2024-25E to +0.4% and +1.1% (vs. the previous forecasts of +0.7% and +1.2%), which are only slightly above the lower bound of the MPC's inflation target range of 1-3%.</li><li>We anticipate that a rate cut would only occur if external risks escalate, such as a potential tax hike policy under a Trump 2.0 administration.</li><li>We maintain our recommendation for stocks that benefit from stable interest rates, including the banking and insurance sectors, with the top picks being SCB, TTB, TISCO, and TLI.</li></ul>

The latest MPC meeting signaled that there is no urgency to cut the policy interest rate, despite pressures from the government or the downward revision of the inflation forecasts for 2024-25E to +0.4% and +1.1% (vs. the previous forecasts of +0.7% and +1.2%), which are only slightly above the lower bound of the MPC's inflation target range of 1-3%.We anticipate that a rate cut would only occur if external risks escalate, such as a potential tax hike policy under a Trump 2.0 administration.We maintain our recommendation for stocks that benefit from stable interest rates, including the banking and insurance sectors, with the top picks being SCB, TTB, TISCO, and TLI.

Economic Update: Policy Interest Rate Maintained at 2.25% - DECEMBER 19, 2024

<ul><li>The latest debt relief measure, literally translated as 'You Fight, We Help,' is expected to benefit all parties involved.</li><li>Vulnerable debtors will have the opportunity to reduce installment payments and ease interest burdens, while banks will see improvements in asset quality.</li><li>Ultimately, this measure aims to help alleviate the overall household debt burden. We estimate that small and medium-sized banks are likely to benefit more significantly, although the extent will depend on the number of debtors registering for the program. </li></ul>

The latest debt relief measure, literally translated as 'You Fight, We Help,' is expected to benefit all parties involved.Vulnerable debtors will have the opportunity to reduce installment payments and ease interest burdens, while banks will see improvements in asset quality.Ultimately, this measure aims to help alleviate the overall household debt burden. We estimate that small and medium-sized banks are likely to benefit more significantly, although the extent will depend on the number of debtors registering for the program. 

Banking DECEMBER 13, 2024 - Small and Medium-Sized Banks to Benefit from New Debt Relief Measure

<ul><li>KTX expects sideways-up movement with the resistance at 1,455/1,472 points and the support at 1,412/1,400 points.</li><li>Key highlights impacting the market include: I) December effect – increased domestic fund purchases from TESG, SSF, RMF, along with the Vayupak Fund; ii) foreign selling pressure expected to ease due to a pause in investments ahead of the Christmas and New Year holidays; and iii) gradual implementation of government measures aimed at boosting confidence in economic growth.</li><li>Risks include a potential reduction in investment in Asian and Thai stock markets in favor of USD assets (e.g., US equities, Russell 2000 Index, US Dollar Index), which are expected to benefit from the policies of President Trump, who will officially take office on January 20, 2025.</li></ul>

KTX expects sideways-up movement with the resistance at 1,455/1,472 points and the support at 1,412/1,400 points.Key highlights impacting the market include: I) December effect – increased domestic fund purchases from TESG, SSF, RMF, along with the Vayupak Fund; ii) foreign selling pressure expected to ease due to a pause in investments ahead of the Christmas and New Year holidays; and iii) gradual implementation of government measures aimed at boosting confidence in economic growth.Risks include a potential reduction in investment in Asian and Thai stock markets in favor of USD assets (e.g., US equities, Russell 2000 Index, US Dollar Index), which are expected to benefit from the policies of President Trump, who will officially take office on January 20, 2025.

Macroeconomics

<ul><li>KTX maintains its view that the Monetary Policy Committee (MPC) will keep interest rates unchanged at the meeting on December 18, 2024, citing inflation remaining below the BoT's policy range of +1-3% and the real interest rate trending downward (currently at 1.67%, the third lowest in Asia).</li><li>The Trade Policy and Strategy Office (TPSO), Ministry of Commerce, reported that the Consumer Price Index (CPI), or headline inflation, for November stood at 108.47, growing by 0.95% YoY (vs. market expectations of +0.9-1.2% YoY).</li><li>For December 2024, inflation is expected to grow further by 1.2-1.3% YoY, leading to an estimated full-year 2024E growth of 0.4-0.5% YoY (vs. the previous target of 0.5% YoY based on a range of 0.2-0.8% YoY).</li></ul>

KTX maintains its view that the Monetary Policy Committee (MPC) will keep interest rates unchanged at the meeting on December 18, 2024, citing inflation remaining below the BoT's policy range of +1-3% and the real interest rate trending downward (currently at 1.67%, the third lowest in Asia).The Trade Policy and Strategy Office (TPSO), Ministry of Commerce, reported that the Consumer Price Index (CPI), or headline inflation, for November stood at 108.47, growing by 0.95% YoY (vs. market expectations of +0.9-1.2% YoY).For December 2024, inflation is expected to grow further by 1.2-1.3% YoY, leading to an estimated full-year 2024E growth of 0.4-0.5% YoY (vs. the previous target of 0.5% YoY based on a range of 0.2-0.8% YoY).

Economic Update: Inflation in November 2024

Thailand

TISCO Financial Group Public Co. Ltd. is a Thai financial services company operating through commercial banking, securities, asset management, and support businesses. It offers a wide range of products including retail and corporate loans, deposit products, investment services, and insurance. The company also provides investment banking, private banking, and wealth management services. Headquartered in Bangkok, Thailand, TISCO was established in 1969 as Thailand's first investment bank.

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TISCO Financial Group (TISCO TB)

FMS Increases Investment Weight in US Equities to 36% Overweight, Reflecting a Super-Bullish View

Bank of America's December 2024 Global Fund Manager Survey, conducted among 204 firms with total AUM of USD518bn between December 6-12, 2024,...

Krungthai XSpring

Economic Update: Policy Interest Rate Maintained at 2.25% - DECEMBER 19, 2024

We maintain our recommendation for stocks that benefit from stable interest rates, including the banking and insurance sectors, with the top picks...

Krungthai XSpring

Banking DECEMBER 13, 2024 - Small and Medium-Sized Banks to Benefit from New Debt Relief Measure

Vulnerable debtors will have the opportunity to reduce installment payments and ease interest burdens, while banks will see improvements in asset...

Krungthai XSpring

Monthly Report: December 2024

Key highlights impacting the market include: I) December effect – increased domestic fund purchases from TESG, SSF, RMF, along with the Vayupak Fund

Krungthai XSpring

Economic Update: Inflation in November 2024

KTX maintains its view that the Monetary Policy Committee (MPC) will keep interest rates unchanged at the meeting on December 18, 2024, citing...

Krungthai XSpring

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