Daily Strategy: SCBS Expects Banking Sector to Lead the Market with Gradual Recovery

Stocks in Asia traded mostly higher on Monday as investors monitor China Evergrande movement after the company missed its due date for $83 million bond interest, while oil prices continued the rally as Brent crude hit the highest level since October 2018.

 

Thailand’s SET Index opened at 1,636.97 points, increased 5.82 points or 0.36% on September 27, 2021.

As of 10:05 local time in Thailand, Nikkei rose 0.36%, Shanghai Composite dipped 0.08%, Hang Seng Index gained 1.21%, Australia ASX 200 advanced 0.72%, while Indonesia IDX Composite slightly traded below its closing level last Friday by less than 0.1%.

 

Mr. Ekpawin Suntarapichard, investment strategists of the Siam Commercial Bank Securities (SCBS), through “Kaohoon Jor Talad Program” on September 27, 2021, stated that the overall outlook is better even though the situation of China Evergrande must be monitored throughout the 30 days after the due date of bond interest, while the Chinese government also inject liquidity into the system as well, making concerns relaxed.

Mr. Suntarapichard stated that the domestic sentiment is moving in a positive direction in hopes of more relaxing in lockdown restrictions, while the vaccination rate is accelerating, resulting in a better outlook for the Thai stock market, giving a support level at 1,600 points and a resistance level of 1,660 points this week.

Moreover, Mr. Suntarapichard added that the banking sector should lead the market to challenge to resistance level this week, seeing attractiveness in the banking sector as the banks are still traded below its valuation, and could bounce back following the economic recovery, recommending BBL and KBANK.

 

In addition, the analyst also commented that it is possible for other banks to expand their businesses the same way SCB did, but would take time to do so.