In today’s briefing:
- Drivers Behind the Turnaround of Asian Currencies
- TOA: Expect Earnings to Recover Slowly in 2022
Drivers Behind the Turnaround of Asian Currencies
- The turnaround of Asian currencies is likely to continue with growth resurfacing in the region ex-China and the interest rate differential with the rest of emerging markets narrowing.
- The main risks to watch are whether the slowdown in China worsens and weighs on the region as a whole and whether central banks embark on FX interventions again.
- While the overall view on Asian currencies is constructive, I prefer cross-country trades to take advantage of differences arising from idiosyncratic drivers and to eliminate the dollar risk.
TOA: Expect Earnings to Recover Slowly in 2022
- We believe a high raw material cost will not be sustain given U.S. Energy Information Administration (EIA) forecasts crude oil prices to decline in 2022.We reiterate BUY rating for TOA
- We expect TOA to report 4Q21 net profit at Bt365m (-26%YoY, +36%QoQ),
- We forecast 2022E earnings to hit Bt2bn (+13%YoY) supported by 1) demand for painting and construction materials from hotel, restaurants, and other related tourism destinations (re-painting demand)
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