KCS Recommends Targeting Foreign Investors’ Picks in Retail and Finance Sectors

Krungsri Capital Securities (KCS) stated via “Kaohoon Jor Talad” program on 8 February 2024 that the trend for the Thai stock market was expected to potentially increase to conform with the Asia market as it mostly traded in positive territory. The circumstances were supported by the cash flow from foreign investments as well as positive signals from the recovery of the export sector in Asia. Moreover, the positive momentum from the Chinese market also grew stronger as Xi Jinping, President of the People’s Republic of China, discussed with authorities regarding the stimulus measures for the country’s economy.

The analyst recommended investors to pay attention to the direction of foreign investment, as it was expected that there would be fund flow coming into the Asia and Thai markets.

Meanwhile, investment in risk assets in the global market was neutral to positive, as the global markets started to price in the possibility of four rate cuts by the Federal Reserve, instead of six in the prior forecast, to conform with the structure of the US economy. According to MUFG, the firm expected the US economy to achieve a soft landing as the country transitioned into a period of growth with potential and eased up its monetary policies.

Regarding domestic factors in Thailand, the Monetary Policy Committee decided to hold its interest rate, which caused the market to expect a potential rate cut in the future. Earlier in the morning, investors repurchased stocks in the market, while the 10-year bond yield declined to 2.54%, making investment in the Thai market better than safe haven assets.

For investment strategies, the analyst suggested buying stocks that are targets for foreign investors, leading by retail stocks with a positive 4Q23 performance. There was a sign for CP All Public Company Limited (SET: CPALL) to constantly rise. The analyst marked CPALL as a top pick and gave a “BUY” recommendation at a target price of THB 72.50.

The analyst recommended SAWAD among finance stocks, which were expected to benefit from the downtrend in interest rates.

As for the case in which the Securities and Exchange Commission (SEC) signaled the deployment of measures to gain more control over short selling or robot trading, the analyst expected the shorted stocks to gradually recover in the short term. The stocks that tremendously decreased, such as HMPRO, CRC, SCGP, CPALL, GLOBAL, SCC, and AP, with a total value of more than 10% and dropped below SET100 more than 13-23%, would edge higher, while the expected business performance would improve.