Daily Strategy: SCBS Recommends Major Banking Stocks on Potential Recovery after 3Q

Major stock markets in Asia traded mostly lower in the morning session on Monday after China reported slower 3Q economic growth at 4.9%.

 

Thailand’s SET Index opened at 1,642.88 points, increased 4.54 points or 0.28%.

As of 10:10 local time in Thailand, Nikkei fell 0.28%, Shanghai Composite dropped 0.35%, Hang Seng Index slipped 0.53%. Meanwhile, Australia ASX200 rose 0.23% and Indonesia IDX Composite gained 0.25%.

 

China’s gross domestic product grew 4.9% in the third quarter of 2021 from a year ago, according to the report of the National Bureau of Statistics on Monday morning. The growth missed expectations for a 5.2% expansion by analysts. Meanwhile, retail sales rose 4.4% in September, beating expectations of 3.3% growth.

 

Mr. Ekpawin Suntarapichard, investment strategist of the Siam Commercial Bank Securities (SCBS), through “Kaohoon Kor Talad Program” on October 18, 2021, stated that China reported slower economic growth in 3Q, dragging the stock market in Asia down this morning. The analyst recommended investors to monitor Thai banks’ 3Q21 earnings, inflation and Fed’s QE tapering, giving a support and resistance level at 1,600-1,660 points.

As for investment strategy, Mr. Suntarapichard advised a “selective-buy” strategy on stocks with unique positive factors. On the speculation over 3Q earnings, the analyst recommended major banks in hopes for an upcoming economic recovery and the potential business restructure in the future. Mr. Suntarapichard advised buying KBANK and BBL on weakness. Meanwhile, SCBS’ analyst added that CHG still has an upside among hospital groups and CRC and M are also buyable at a target price of Bt40 and Bt60, respectively.