Market View

Thanawat Patchimkul

Head of Research

DBS Vickers Securities (Thailand)

The Stock Exchange of Thailand was volatile during the first three weeks of February, influenced by the sharp swings in global oil prices and the changing investor perception towards the global economic outlook.

The SET Index has been moving around the 1,300 level, which is close to DBS’s 2016 target of 1,302.

The key market leaders included PTT Group, which outperformed its peers. The market laggards were TRUE, TASCO (Tipco Asphalt) and major construction contractors. Key construction players CK (Ch Karn-chang), STEC (Sino-Thai Engineering and Construc-tion) and ITD (Italian-Thai Development) have underperformed the market significantly, as the market prices in potential delays of the bidding process for the government’s infrastructure projects, which would have negative impacts on their earnings in 2016.

We remain cautious on the Thai market and continue to recommend that investors seek overseas investment opportunities, particularly in fast-growing Asian markets.

Tisco Securities

The Stock Exchange of Thailand continues to flirt with the 1,300-points resistance level, with sentiment lifted by the recent surge in oil prices and better-than-expected GDP data for the fourth quarter of 2015.

Gross domestic product expanded by 2.8 per cent year on year in 4Q15, beating Tisco Economic Strategy Unit’s estimate of 2.2 per cent and the consensus of 2.6 per cent, This brought 2015 growth to 2.8 per cent, largely in line with estimates and up from 0.8 per cent in 2014.

We continue to like selective energy plays given our view that oil prices will find a firmer footing this year as US shale production declines. Our favourite in the sector is TOP (Thai Oil), whose 4Q15 net profit of Bt3.75 billion easily exceeded our forecast of Bt2.72 billion as well as consensus (Bt3.4 billion), aided by a 29-per-cent GRM (gross refining margin) gain quarter on quarter.

In the telecom space, we have cut our 2016-17 earnings forecasts for ADVANC (Advanced Info Service) and DTAC (Total Access Communication) by nearly 15 per cent each and reduced our target prices to Bt200 for ADVANC (from Bt210) and to Bt59 for DTAC (from Bt62) after the emergence of a data price war by incumbent operators. However, we retain “buy” ratings on both stocks.

In our view, the aggressive price promotions by operators are aimed at making local banks even more reluctant to provide financial guarantees to JAS (Jasmine International). Note that the first spectrum licence payment is due on March 21. No payment means JAS would lose its 900-megahertz licence and potentially be barred from future spectrum auctions.

Trinity Securities

Research Department

On February 18, Indonesia’s central bank cut its policy interest rate by 25 basis points to 7 per cent and lowered commercial banks’ provisioning obligation to 6.5 per cent.

Given this situation, we are starting to see more monetary easing. There’s also a 40-per-cent probability for the Bank of Thailand’s Monetary Policy Committee to slash its rate next month.

We still expect the SET Index to improve in March from measures and monetary easing of central banks across the world. The following are our stock picks.

1) Trinity trigger (short-term investors for speculation): PSTC (Power Solution Technologies), IFEC-W2, IRPC, TACC (T.A.C. Consumer)

2) The perfect gems (one-to-three-month investors): TRC (TRC Construction), SVI, KAMART (Karmarts), JMART (Jay Mart), GL (Group Lease)

3) Deep value stock (three-to-six-month investors): TCAP (Thanachart Capital), TU (Thai Union Group)

4) Business model (six-to-12-month investors): BWG (Better World Green), PSTC

5) Quant trading (risk-averse investors): Long LPN (L.P.N. Development) and short SPALI (Supalai), long BBL (Bangkok Bank) and short KBANK (Kasikornbank)

6) All about technical chart (technical investors): UREKA (Eureka Design), MTLS (Muangthai Leasing), BEM (Bangkok Expressway and Metro), TCAP, SIRI (Sansiri), AUCT (Union Auction), IVL (Indorama Ventures)