CGSI expects the SET index to fluctuate.

Thai Stock Market Outlook: Volatility and Potential Rebound

The Thai Stock exchange (SET) is anticipated to experience fluctuations between 1,235-1,260 points, potentially influenced by negative sentiment stemming from regional and international markets, according to CGS International Securities (Thailand) (CGSI).

Regional and Global Headwinds

CGSI cites several factors contributing to potential market negativity, including declines in regional and international stock markets, particularly in the United States, London, and Europe. furthermore, concerns surrounding True Corporation’s fourth-quarter 2024 financial performance, with a reported net loss of 7.5 billion baht, exceeding expectations, adds to the bearish sentiment.

“The market may have the opportunity to Technical Rebound in the short period after falling more than 16.7 points yesterday (20 Feb). From the sale of the Newco Group after the XD announcement,” noted CGSI.

Global events,such as the ongoing Russia-Ukraine conflict and potential tensions arising from recent diplomatic developments,are also closely monitored. Investors are also watching economic indicators like the Purchasing managers’ Index (PMI) for production and services, as well as January’s secondhand home sales figures from the united States.

Stock Recommendations

Despite the prevailing uncertainty, CGSI offers insights on specific stocks to watch:

• MTC: With a loan growth target of 15% for 2025 and expectations of lower credit costs compared to the fourth quarter of 2024, MTC is identified as a Top Pick for consumer loans. The company expects growth to be driven by motorcycle,car,and land loans. (Target Price: 49.25 / Stop Loss: 46.50)
• SC: Aiming for sales of 2.6 billion baht (+4.1% YOY) and total income of 2.5 billion baht (+11% YOY) in 2025, SC plans to focus on cost reduction strategies to enhance profitability. This approach suggests potential revenue recovery in 2025-2026, driven by strong marketing efforts in high-end housing groups. (Target Price: 2.76 / Stop Loss: 2.52)

US Market Downturn and Global Economic Concerns

Adding to the volatile landscape, US stocks experienced declines, largely influenced by disappointing earnings forecasts from retail giants like Walmart (-6.5%). Walmart’s projected profit for 2025, at 2.5-2.6 USD/share, fell short of market expectations, impacting related stocks such as Costco (-2.6%) and Target (-2.0%). further selling pressure emerged in the banking sector,affecting companies like Goldman Sachs,Morgan Stanley,and Palantir (-5.2%) following concerns over potential budget cuts impacting revenue and profits.

Worries about the US economy intensified due to weaker-than-expected economic indicators, including a decline in the Conference Board’s Leading Economic Index (LEI) and a surge in weekly unemployment claims. Manufacturing sentiment also dipped, with the Philadelphia Fed’s manufacturing Index falling to 18.1 in February, below expectations.

Despite the uncertainty, there were signs of stabilization in the bond market, with yields declining, and a weaker dollar alongside a strengthening yen. This reflects anticipation of potential interest rate hikes by the Bank of Japan.

Energy Market Fluctuations

Simultaneously occurring, Brent crude prices continued their upward trajectory, increasing by 0.6%, fueled by reports of declining gasoline and distillate stocks, coupled with reduced oil supply trends.

Navigating the complexities of the global market requires careful analysis, strategic investment decisions, and a keen awareness of evolving trends. Staying informed about geopolitical developments,economic indicators,and company-specific factors is crucial for investors seeking to capitalize on opportunities amidst volatility.

How do you believe investors can best balance risk and return in their portfolios?

Expert Insights: Navigating the Thai Stock Market’s Volatile Landscape with CGS International Securities

In an exclusive interview with Archyde News, Ms. Pichet Boonpaisarn, Head of Research at CGS International Securities (Thailand) (CGSI), shares her insights on the anticipated trajectory of the Thai Stock Exchange (SET), regional and global headwinds, stock recommendations, and the impact of the US market downturn on global markets. Let’s dive into the intricacies of the current market dynamics.

Thai Stock Market outlook: Volatility and Potential Rebound

Archyde (A): Thank you for joining us today, Ms. Pichet. To kick things off, coudl you provide our readers with a brief overview of what they can expect from the thai Stock Exchange in the near term?

Pichet: Thank you for having me. Based on our analyses, we anticipate the Thai Stock Exchange to experience intra-day fluctuations within the range of 1,235-1,260 points. This volatility is driven partly by regional and international market conditions,especially the performances of US,European,and London stock markets.

Regional and global Headwinds

A: You’ve mentioned that regional and global factors will influence the Thai market.Can you elaborate on some of the key factors we should be keeping an eye on?

Pichet: Absoltely.u Some of the critical factors include declines in regional and international markets,especially in the US and europe. Additionally, recent developments like the evolving geopolitical situation, particularly the Russia-Ukraine conflict, potential diplomatic tensions, and economic indicators such as the PMI and US secondhand home sales figures should be closely monitored.

A: How does True Corporation’s Q4 2024 financial performance factor into the bearish sentiment?

Pichet: True Corporation’s net loss of 7.5 billion baht has indeed added to the negative market sentiment. This unexpected result has had a significant impact on investor confidence, contributing to the overall bearish atmosphere.

Technical Rebound Opportunity

A: CGSI mentioned the potential for a technical rebound. Could you expound on this?

Pichet: Yes, the market has recently experienced significant declines. however, this also presents an opportunity for a technical rebound in the short term.We’ve seen this potential especially after the sale of Newco Group following the XD announcement, which could drive the market temporarily upward.

Stock Recommendations

A: Despite the prevailing uncertainty, CGSI has identified specific stocks with growth potential. Could you share more about MTC and SC?

Pichet: Of course. MTC, with it’s 15% loan growth target for 2025 and expected lower credit costs, is an attractive pick in consumer loans.Additionally, SC’s focus on cost reduction strategies to enhance profitability and strong marketing efforts in high-end housing groups makes it an intriguing choice for potential revenue recovery in 2025-2026.

US Market downturn and Global Economic Concerns

A: The US market downturn has sent ripples across global markets. How do you think this will impact the Thai market and broader global economic prospects?

Pichet: The US market downturn, fueled by disappointing earnings forecasts and weaker economic indicators, is indeed a cause for concern. This impact on the Thai market and other global economies will likely be felt through interconnections in trade, investment, and investor confidence. However,each market has its unique dynamics,and Thailand’s economic fundamentals will also play a crucial role in determining its resilience.

A: looking ahead, what steps can investors take to navigate this volatile landscape successfully?

Pichet: Investors should maintain a long-term perspective and stay informed about geopolitical developments and economic indicators. By continually analyzing company-specific factors and market trends, investors can make strategic decisions to capitalize on opportunities amidst volatility.

Energy Market Fluctuations

A: Lastly, we’ve seen energy markets fluctuating.How does this impact the broader economic and investment landscape?

Pichet: Energy market fluctuations can considerably influence global economic growth and inflation,which in turn affects interest rates and corporate profitability. Understanding these dynamics is crucial for investors to identify sectors and stocks likely to benefit or be negatively impacted.

A: Thank you, Ms. Pichet, for your insightful responses. Before we wrap up, could you share one thought-provoking question for our readers to ponder and engage with?

Pichet: certainly. With the current market volatility, how do you believe investors can best balance risk and return in their portfolios?