Daily Strategy: CNS Recommends Speculating Consumer Finance Stocks

Stocks in Asia traded in a mixed session on Thursday as Australia reported a higher-than-expected trade surplus in July this morning, while the U.S. private payrolls missed expectations in August.

 

As of 9:45 local time in Thailand on September 2, 2021, Nikkei rose 0.14%, Shanghai Composite increased 0.35%, Hang Seng Index gained 0.88%, ASX 200 fell 0.94% while IDX Composite was flat.

 

This morning, Australia reported a trade surplus of 12.117 billion Australian dollars in July, beating expectations of a 10.2 billion Australian dollars surplus.

Last night, OPEC and its allies agreed to stick to their existing policy of oil output increases by 400,000 barrels per day a month. Meanwhile, U.S. oil stockpiles dropped by 7.169 million barrels last week which was more than a drop of 1.732 million barrels forecasted by analysts.

August private payrolls rose by 374,000, largely missing economists’ consensus of adding 625,000 jobs. Still, the figure was higher than jobs added by 326,000 in July. Analysts saw that a slight increase in August could hint at a slowdown in the job market recovery.

 

Mr. Koraphat Vorachet, Capital Nomura Securities’ strategist, through “Kaohoon Jor Talad Program” on September 2, 2021, stated that the decline in yesterday’s session was a profit taking after a long rally in the past two weeks as Covid-19 situation had a better outlook, which led to a relaxation in lockdown measures.

Mr. Vorachet noted that in order to continue expanding, the market required fund flow as the overall fundamentals were not strong enough. The market headwind also depended on the U.S. Fed’s tapering, which could cause a fund outflow as the tapering draws near, especially in the emerging market due to the weakened economic outlook from Covid-19 Delta variant.

Mr. Vorachet expected the Thai market could swing to the range of 1,630-1,679, but cautioned investors that this range is not for increasing weight in the portfolio, and recommended trading buy or speculative buy, especially on laggard stocks.

The portfolio outlook remained with power generation stocks, ICT, major hospitals and exports.

In addition, Mr. Vorachet expected the support level for SET Index today at 1,620 points and a resistance level at 1,646-1,650 points. The power generation stocks will remain as a catalyst to support the market with an upside to the target price, recommended GULF, GPSC and BCPG. As for today’s investment theme, Mr. Vorachet recommended consumer finance stocks, saying that JMART, JMT and SINGER are still available for speculative buy, including TIDLOR as well.