Daily Strategy: CNS Expects Fluctuation in SET Index, Eyeing Small and Mid-Cap Stocks with Positive Earnings

Major stock markets in Asia traded lower on Thursday after the release of hot inflation in the U.S. that rose higher than expectations by expanding 8.3% in April.

As of 10:17 local time in Thailand on May 12, 2022, Nikkei fell 0.84%, SSEC dipped 0.12%, Hang Seng Index decreased 1.35%, ASX 200 dropped 1.06% and IDX Composite slipped 2.08%.

Thailand’s SET Index opened at 1,604.86 points, decreased 8.48 points or 0.53%.


Yesterday, the U.S. inflation in April accelerated to 8.3%, higher than expectations of 8.1% by economists. The figure was at the highest level in 40 years. Meanwhile, core CPI, which excludes food and energy, also was higher than economist expectations, rising 6.2%, according to the data released by the Bureau of Labor Statistics on Wednesday.

Shelter costs, which comprise about one-third of the U.S. consumer price index (CPI), rose at their fastest pace since 1991.


Mr. Koraphat Vorachet, Capital Nomura Securities’ strategist, through “Kaohoon Jor Talad Program” on May 12, 2022, stated that the market is still digesting information from the U.S. inflation data, expecting the Thai stock market to fluctuate in a negative territory, giving a support level at 1,598-1,590 points and a resistance level at 1,625-1,630 points. 

The strategist stated that the overall earnings of Thai listed companies are lower-than-expected, but upon looking into small and mid-cap stocks, 42% out of 70 companies that had reported their earnings were better-than-expected. Thus, Mr. Vorachet recommended investors to pick stocks that reported positive earnings with a catalyst to boost the price such as KCE on baht depreciation, GFPT, and BDMS on positive 1Q earnings.