Trinity Securities cut SET Index year-end forecast to 1,770 points on Tuesday, as the market has been dominated by concerns over whether the Federal Reserve’s rate hike will come sooner than expected, forcing the US 10-year treasury yield to rise significantly since the start of 2022.
Trinity sees US economic reports as a key driver of market movement in February’s investment theme. If these data come out entirely different from the previous month or market forecasts, it may have an effect on traders’ sentiments on the Federal Reserve’s monetary policy in the upcoming months. Investors are recommended to monitor the US employment and inflation reports.
For February’s investing strategy, Trinity recommends high-yield stocks that are still undervalued, such as Advanced Info Services (SET: ADVANC), Intouch Holdings (SET: INTUCH), Major Cineplex Group (SET: MAJOR) and Thai Optical Group (SET: TOG). Also, Trinity recommends growth stocks that have had recent steep declines but have not seen their earnings per share forecasts cut, such as Hana Microelectronics (SET: HANA), KCE Electronics (SET: KCE), and JMT Network Services (SET: JMT).
Risk factors that will need to be closely monitored in the coming period include Thailand’s economic recovery, which may fall short of expectations, particularly in sectors that are heavily reliant on domestic consumption and have been impacted by the rising cost of living. This could be seen in the mobility index that has fallen in a number of provinces. If domestic FMCG prices continue to rise at this pace, stocks in the domestic consumption sector may face greater downside risks.
