JPMorgan wrote in a note, stating that Thai fund managers are shifting away from cyclical plays such as banking and F&B sector as domestic demand and services sector will be main catalysts for Thai equities.
The firm stated that domestic fund managers continued to pivot away from cyclical plays by raising weights in cash and Healthcare, funded by trimming “Overweight” ratings in the banking sector and food and beverages. Moreover, domestic fund managers also increased exposure to the reopening theme by adding weight to transportation, healthcare and property.
Meanwhile, upbeat domestic demand and revitalization of the services sector in Thailand remain the main catalysts for equities in the near term. JPMorgan also noted that this could be further supported by domestic institutions returning to buy stocks in November and December.
Still, the financial firm still believed that weaker external demand amid a global slowdown and exchange rate pressures will limit performance of Thai equities.
JPMorgan reiterated its “Neutral” view on Thailand, while picking preferred stocks with idiosyncratic drivers and resilient earnings: HMPRO, KBANK, PTTEP, BANPU, TU and CPALL.