Daily Strategy for Investors on April 30, 2019

KGI Securities has made a report for investors on the trading session on April 30, 2019, stating the Thai stock market could extend its consolidation on Tuesday. While US stocks continued to edge higher and make new record, and US core PCE inflation decelerated in March.

The effect on EM Asia stocks should be minimal as traders now focus on regional issues like i) how active the Chinese authorities will be on economic stimulus and ii) the pace of China’s manufacturing sector from the release of NBS manufacturing PMI this morning. On the domestic side, Thailand’s finance ministry yesterday lowered its 2019 GDP forecast to 3.8% (previous 4.0%) and anticipates slowing economic growth in 1H19, which actually justifies the short-term economic stimulus package to enter cabinet consideration today.

Meanwhile, the BoT is also releasing March economic data set today which will be the final input to gauge 1Q19 GDP growth.

 

Thailand’s annual headline inflation rate in April likely slowed slightly from the previous month, but stayed inside the central bank’s target range for a second straight month, a Reuters poll showed. The median forecast of 10 economists was for the headline consumer price index (CPI) to rise 1.20% in April after March’s 1.24% increase. The Bank of Thailand (BoT) has forecast 2019 headline inflation of 1.0%, against its 1-4% target range.

 

The Stock in Focus
Siam Cement Group (SCC), Thailand’s largest cement maker and industrial conglomerate, has cut its projected total revenue for 2019 by 5-10%, mainly due to weaknesses in its petrochemical business. Recently SCG announced its total revenue in 2019 would increase 5-10% from its 2018 revenue of Bt478bn because petrochemical crude oil prices will vary amid the global economic slowdown, while sales volume will drop.

Indorama Ventures Plc (IVL), a leading manufacturer of polyester and plastic packaging material, has clinched Thailand’s first green loans from Japan’s Mizuho Bank. The loans, for US$100mn and €100mn, are being provided in the form of positive incentive loans, in which the commercial terms are linked to the improvement in IVL’s ESG (environment, social and governance) rating.

Taokaenoi Restaurant & Franchise Co, the operator of Taokaenoi (TKN) Land souvenir shop, has diversified into the restaurant business, opening Hinoya Curry, a Japanese curry rice shop, to offset business risk from the unpredictable nature of Chinese tourist arrivals. Itthipat Peeradechapan, the company’s chief executive, said it plans to open over 10 Hinoya Curry restaurants in Thailand in three years. The first Hinoya Curry restaurant outside Japan was opened on the third floor of The Market Bangkok complex on Ratchaprasong Road this February.

AP Thailand Plc (AP) remains confident about Bangkok’s condo demand despite the new lending curbs and the market shifting to single houses and townhouses. Vittakarn Chandavimol, chief of corporate strategy and creation, said condo sales in the first four months remained on target despite the loan-to-value (LTV) limits starting on April 1.

Tata Steel Thailand Plc (TSTH), the local unit of India’s largest steel maker, expects its sales volume this fiscal year starting in April to rise by 5-10% to 1.20-1.25mn tonnes thanks to the expansion of its overseas markets. TSTH plans to increase its export volume and seek new markets as Thailand’s construction sector is quite bearish.