Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Thematic (Sector/Industry)

<ul><li>Technically, the SET Index is expected to move lower, with the support at 1,391/1,385 points (75-day EMA/50-day EMA) and the resistance at 1,410/1,416 points.</li><li>For the overall picture, the index is still in an uptrend pattern, testing the upchannel resistance at around 1,348-1,432 points.</li><li>In the short term, the index is beginning to show signs of a correction after rising sharply by nearly 40 points in the previous three trading days.</li></ul>

Technically, the SET Index is expected to move lower, with the support at 1,391/1,385 points (75-day EMA/50-day EMA) and the resistance at 1,410/1,416 points.For the overall picture, the index is still in an uptrend pattern, testing the upchannel resistance at around 1,348-1,432 points.In the short term, the index is beginning to show signs of a correction after rising sharply by nearly 40 points in the previous three trading days.

<ul><li>Technically, the SET Index is expected to move up, with the resistance at 1,405/1,416 points and the support at 1,395/1,390 points (75-day EMA).</li><li>As for the overall picture, there is a positive signal after the index broke out from the resistance of the downchannel trend at 1,330-1,395 points on higher volume.</li><li>This should support upward movement to test the previous resistance at 1,416 and 1,435 points, respectively.</li></ul>

Technically, the SET Index is expected to move up, with the resistance at 1,405/1,416 points and the support at 1,395/1,390 points (75-day EMA).As for the overall picture, there is a positive signal after the index broke out from the resistance of the downchannel trend at 1,330-1,395 points on higher volume.This should support upward movement to test the previous resistance at 1,416 and 1,435 points, respectively.

<ul><li>Private consumption has continued to expand, aligning well with growth in the service sector.</li><li>However, despite some economic recoveries in trade partner countries, exports have not shown full growth potential (Figure 1).</li><li>Consequently, the Thai MPI has experienced a continuous decline on a YoY basis for 17 consecutive months (Figure 2).</li></ul>

Private consumption has continued to expand, aligning well with growth in the service sector.However, despite some economic recoveries in trade partner countries, exports have not shown full growth potential (Figure 1).Consequently, the Thai MPI has experienced a continuous decline on a YoY basis for 17 consecutive months (Figure 2).

<ul><li>We maintain a neutral view on the possibility of increasing the retail diesel price ceiling within the range of Bt1-2/liter to Bt31-32/liter due to the negative financial position of the Oil Fuel Fund, which stands at nearly -Bt100bn, and the need for excise tax collection by the Ministry of Finance to meet the target.</li><li>While an upward adjustment to the retail diesel price ceiling could yield short-term benefits for oil retailers in the form of one-time stock gains, challenges persist for marketing margins, including i) the incremental costs associated with the Euro 5 standard for refined oil products; and ii) the management efficiency of the Oil Fuel Fund.</li><li>Therefore, we maintain our conservative view on marketing margins in 2024E. For the downstream sector, we prefer refinery operators to oil retailers, with TOP as the top pick (Outperform; FV: Bt62.4). </li></ul>

We maintain a neutral view on the possibility of increasing the retail diesel price ceiling within the range of Bt1-2/liter to Bt31-32/liter due to the negative financial position of the Oil Fuel Fund, which stands at nearly -Bt100bn, and the need for excise tax collection by the Ministry of Finance to meet the target.While an upward adjustment to the retail diesel price ceiling could yield short-term benefits for oil retailers in the form of one-time stock gains, challenges persist for marketing margins, including i) the incremental costs associated with the Euro 5 standard for refined oil products; and ii) the management efficiency of the Oil Fuel Fund.Therefore, we maintain our conservative view on marketing margins in 2024E. For the downstream sector, we prefer refinery operators to oil retailers, with TOP as the top pick (Outperform; FV: Bt62.4). 

Energy (Oil Retailers) - Scenarios for a Diesel Price Lift

<ul><li>The MPC's softer outlook for 2024E GDP growth, now projected within the range of 2.5-3.0%, will provide more leeway for the committee to maintain the policy interest rate above inflation, thereby ensuring a positive real interest rate.</li><li>Considering i) the current real interest rate at 3.6% (Thai policy rate at 2.5%, CPI at -1.1% YoY), the highest in 32 months and higher than the US real interest rate at 2.1% (US policy rate at 5.5% and CPI at +3.4% YoY); ii) the uncertain outlook for the Digital Wallet scheme, which may prevent Thai GDP growth in 2024E from reaching its full potential level; and iii) the divided vote (five to two) in the most recent meeting, there is a possibility that the MPC may reduce the policy interest rate in the future to stimulate the economy and bring economic growth back to its potential level.</li><li>This scenario would be positive for high dividend plays (BCP, PTT, TOP, WHAUP, SABINA and ADVANC) and the finance sector (SAWAD, MTC and TIDLOR) (Figure 9).</li></ul>

The MPC's softer outlook for 2024E GDP growth, now projected within the range of 2.5-3.0%, will provide more leeway for the committee to maintain the policy interest rate above inflation, thereby ensuring a positive real interest rate.Considering i) the current real interest rate at 3.6% (Thai policy rate at 2.5%, CPI at -1.1% YoY), the highest in 32 months and higher than the US real interest rate at 2.1% (US policy rate at 5.5% and CPI at +3.4% YoY); ii) the uncertain outlook for the Digital Wallet scheme, which may prevent Thai GDP growth in 2024E from reaching its full potential level; and iii) the divided vote (five to two) in the most recent meeting, there is a possibility that the MPC may reduce the policy interest rate in the future to stimulate the economy and bring economic growth back to its potential level.This scenario would be positive for high dividend plays (BCP, PTT, TOP, WHAUP, SABINA and ADVANC) and the finance sector (SAWAD, MTC and TIDLOR) (Figure 9).

Economic Update: MPC Holds Policy Interest Rate at 2.5%

Thailand

Bangchak Corporation Public Company Limited operates as an energy company. The Company offers petroleum exploration and production, biomass, crude oil, and solar energy. Bangchak markets its products in Thailand.

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Bangchak Corporation (BCP TB)

KTX Zoom - APRIL 17, 2024

Technically, the SET Index is expected to move lower, with the support at 1,391/1,385 points (75-day EMA/50-day EMA) and the resistance at 1,410...

Krungthai XSpring

KTX Zoom - APRIL 10, 2024

Technically, the SET Index is expected to move up, with the resistance at 1,405/1,416 points and the support at 1,395/1,390 points (75-day EMA).

Krungthai XSpring

Ktx Ahead - April 9, 2024

Private consumption has continued to expand, aligning well with growth in the service sector. However, despite some economic recoveries in trade...

Krungthai XSpring

Energy (Oil Retailers) - Scenarios for a Diesel Price Lift

We maintain a neutral view on the possibility of increasing the retail diesel price ceiling within the range of Bt1-2/liter to Bt31-32/liter due to...

Krungthai XSpring

Economic Update: MPC Holds Policy Interest Rate at 2.5%

This scenario would be positive for high dividend plays (BCP, PTT, TOP, WHAUP, SABINA and ADVANC) and the finance sector (SAWAD, MTC and TIDLOR)

Krungthai XSpring

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