Home Energy assets SET sentiment supported by record earnings

SET sentiment supported by record earnings

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RECAP: The SET index jumped mid-week after listed companies reported record second-quarter profits of 350 billion baht, rekindling investor confidence, before cutting profit taking yesterday. US stocks were range-bound, reflecting mixed views on economic data and uncertainty about the scale of the Fed’s next interest rate hike.

The SET index traded in a range of 1,617.00 and 1,642.17 points this week before closing yesterday at 1,625.92, down 0.62% from the previous week, with a reading of ‘average daily business of 74.32 billion baht. On Thursday, foreign investors were net buyers of 22.6 billion baht and institutional investors bought 2.5 billion. Brokerage firms were net sellers of $3.1 billion and retail investors sold 21.9 billion baht worth of shares.

NEW : Thai and foreign companies filed 784 investment promotion applications in the first six months of 2022, up 4% from a year ago, but the combined value of investments fell 42% to 219, 7 billion baht, according to the Board of Investment. The automotive and digital sectors have seen the strongest growth.

True Corporation said revenue edged up 0.8% year-on-year to 34 billion baht in the second quarter, but fell 3.1% on a quarterly basis, amid high inflation that dragged down undermined purchasing power. The company’s consolidated net loss widened to 761 million baht from 299 million in the second quarter of last year. TrueMove H’s mobile service revenue fell 1.2% year-on-year to 19.9 billion baht.

US Federal Reserve officials remain committed to raising interest rates as high as necessary until inflation slows to a manageable level, as the United States now faces a recession. Chairman Jerome Powell said the Fed may take a break after its September meeting to assess the impact of rate hikes. The Fed Watch Tool now suggests a 65% chance of a 50bp hike in September, and only 35% for a 75bp hike.

Many key indicators in the United States show that inflation has probably peaked. The consumer price index (CPI) in July fell to 8.5% year-on-year from 9.1% in June, while producer prices and housing data also fell.

The central bank of the Philippines raised its benchmark rate an additional 50 basis points to 3.75% on Thursday and signaled that it had room to raise borrowing costs further to combat inflationary pressures.

Fund flows are expected to continue in Thailand’s stock market as the economy recovers, unlike many developed markets, analysts said. Second quarter earnings were much stronger than expected, so the forecast could be revised upwards. Foreigners have been net buyers of 35 billion baht so far this month, and 152 billion for the year to date.

Thailand’s second-quarter GDP grew 2.5% yoy and 0.7% quarter-on-quarter, with a robust rebound expected in the second half thanks to a wider reopening, the easing of Covid measures and economic stimulus measures such as Kon La Krueng phase 5. GDP is expected to grow by more than 3% year-on-year in the third and fourth quarters, compared to less than 3% in the first and second quarters.

Banpu Plc plans capital expenditures worth US$3 billion to US$4 billion over the next five years as ASEAN’s largest coal producer expands its clean energy and energy technology businesses. The company is also diversifying into the health sector.

Central Pattana Plc has announced plans to develop a mixed-use project on a 48 rai plot of land on Phahon Yothin Road in a 50/50 joint venture with its subsidiary Grand Canal Land Plc.

Ratch Group Plc, the country’s largest private power producer by capacity, acquired two energy companies for US$605 million to secure long-term revenues. The purchase covers four new energy assets: a renewable power plant in Thailand, a gas turbine plant in Australia, a combined cycle plant in Vietnam and a battery energy storage system in the Philippines.

The cabinet approved a draft decree authorizing the Ministry of Finance to guarantee repayment of loans and borrowings of up to 150 billion baht by the Petroleum Fund Office. The cash-strapped fund has racked up debts of more than 100 billion baht by subsidizing fuel prices.

Central Pattana Plc has partnered with PTT Plc and Evolt Technology Co, an electric vehicle (EV) charging company, to install charging stations at all Central business complexes by the end of the year. CPN and its partners will spend 200 million baht to install 350 on-ion stations in 37 central shopping malls in 18 provinces.

Energy Absolute Plc, a developer and operator of renewable energy and electric vehicles, is testing a battery-powered locomotive with the aim of expanding into rail transport, through a partnership with Asia Engineering and Services (Thailand) .

Tipco Asphalt Plc, the country’s largest asphalt producer, expects sales in 2022 to exceed the 1.2 million tonnes achieved last year amid growing demand from government construction and landscaping projects. road repair.

The Industrial Estate Authority of Thailand (IEAT) plans to develop a dry port in Udon Thani to make the northeastern province a regional land transport hub linked to the Sino-Lao high-speed rail system.

The government is committed to moving forward with its five-year investment plan for the Eastern Economic Corridor (EEC), aimed at boosting economic growth by 5% per year between 2023 and 2027 and attracting a combined investment of 2 .2 trillion baht.

Supalai Plc expects year-end pre-sales to exceed its 28 billion baht target after hitting 18.2 billion in the first half as several negative factors are expected to ease in the second half. Chief executive Tritecha Tangmatitham predicted that interest rate hikes would be modest and shouldn’t affect homebuyers much.

Mitsubishi UFJ Financial Group, the Japanese parent of Bank of Ayudhya, is in talks to acquire consumer lender Home Credit’s assets in Indonesia and the Philippines, worth an estimated $500 million, Bloomberg reported Thursday.

COMING : China will update its one- and five-year policy rates on Monday. The eurozone will release July’s preliminary manufacturing and non-manufacturing PMIs and the US will release July new home sales on Wednesday. On Thursday, the United States will announce July’s durable goods orders and the Fed will open its annual Jackson Hole meeting, drawing economists and central bankers from around the world.

Domestically, the focus is on politics, as the Constitutional Court will be asked to determine whether Prime Minister Prayut Chan-o-cha’s eight-year term expires this week, or in 2025 or 2027. The Commerce Ministry will release July trade figures on Tuesday, and the SET will hold its annual Thailand investment forum from August 24-26.

Actions to watch: Capital Nomura Securities recommends stocks that will benefit from the recovery in tourism, especially hotel companies. Its investment theme for next week includes four groups: defensive stocks with growth potential such as BDMS, BCH and CHG; high growth and technology companies that depend on domestic demand such as JMT, SINGER, CHAYO, BE8, BBIK and IIG; consumer stocks that are likely to gain as inflation declines, such as ADVANC, TIDLOR, INTUCH, DTAC, CPALL, MAKRO, CRC, HMPRO, ILM, KTC and SNNP; and anti-commodity stocks that benefit from lower oil prices, such as SCGP, GPSC, BGRIM, BCPG, CBG, SCC, TOA, EPG, GULF and SAPPE.

Phillip Securities recommends three themes: stocks that benefit from BoI incentives such as WHA AMATA, AH, SAT, STANLY, GPSC, EA and BPP; BJC and MAKRO retail outlets; and short-term energy values: PTTEP, SPRC and TOP.

Technical view: Capital Nomura sees support at 1614 and resistance at 1650. SCB Securities sees support at 1618 and resistance at 1650.