Krungsri Securities expresses a positive view following the announcement by Thailand’s Ministry of Finance regarding potential key proposals to the U.S., especially on the focus of export screening and verification and the value creation toward both nations.
Furthermore, the securities company also speculates that the negotiation will benefit stocks related to agriculture, infra tech, stocks with business in the U.S. or high cash flow for additional investment.
Regarding the five proposals, they are as follows:
- Reduction in Both Tariff and Non-tariff Trade Barriers: This will apply in the industry of processing and digital technology, which includes data centers and AI.
- Increased Imports of Essential US Goods: These goods include energy, agriculture, airplanes and its components, and service technology.
- Market Access on Agriculture: Such as fruit and animal feed corn.
- Export Screening and Origin Verification: This is to prevent false claims of goods’ origin. Thailand has already implemented this measure, which created a certain satisfaction level toward the U.S.’ Customs Department.
- Promotion of Thai Investment in the U.S.: Currently, the president of the Thailand Trade Representatives, along with chairman of the Thai Chamber of Commerce and private sector, are heading to the U.S. to discuss with companies and partners for implementation.
Krungsri Securities views that these proposals are similar to the original proposals with two main additions. First is the reduction in trade barriers of the infra tech industry, while the second is the focus on the screening and verification.
The securities company estimates that the first addition proposal would create a new S curve in the infra tech industry and benefit the stocks of power plant, industrial estate, telecommunication, and data center contractor. Stocks related to these industries are GULF, GPSC, AMATA, WHA, ADVANCE, TRUE, STECON, and INSET.
Furthermore, Krungsri Securities speculated that this benefit would outweigh the effects caused by the implementation of additional screening and verification.
As for the second addition proposal, the securities company views that it could have mid and long term benefits in creating manufacture that generate additional value toward the economy.
Regarding the proposals similar to the original’s, such as the import of corn, Krungsri Securities views that they could benefit the stock of agriculture on the cost side, power plant, petrochemical, like CPF, GULF, GPSC, and PTTGC.
As for the promotion of Thai investment in the U.S., it could benefit stock that has potential and active cash flow, such as PTT.
Krungsri Securities also cited the U.S. Secretary of the Treasury’s positive comments on the proposals, forecasting a 65% chance of Thailand receiving trade agreements similar to neighborhood nations, which could maintain the competition’s capability.
The securities company forecasts that several stocks would benefit from the agreement. They are as follows:
- Stocks that benefit from Thailand’s new proposal under Infra Tech industry, such as GPSC, GULF, WHA, AMAA, ADVANC, TRUE, STECON and INSET.
- Stocks that relied on reopening trade, such as WHA, AMATA, DELTA, CPF, China Plays, PTTGC, and SCC.
- Stocks that have potential in adding an investment, such as PTT.
