CNS Expects Weak Baht to Benefit CPF with Positive Momentum after Breaking Bt30.75 Level

SET Index traded slightly lower on Monday, March 22, 2021 at 1,562.04 points, decreased 1.92 points or 0.12% with a trading value of 32 billion baht as of 11:56 local time in Thailand.

 

Mr. Korapat Worachet, Director of Investment Research and Services – Investment Strategy of Capital Nomura Securities through Kaohoon JorTalad Program, expected SET Index to move in sideways trends without positive sentiment to drive the market. Meanwhile, the negative outlook in the U.S. market remained as negative sentiment to traders after the Fed announced no renewal of COVID-19 Capital Break program, coupled with rising bond yield and concerns over inflation rate.

 

Mr. Worachet stated that political issues did not weigh down on the Thai stock market as of late, adding that the market mostly moved in line with global markets and focusing on the reopening theme.

However, the pressure from domestic issues would weigh the market down once global markets slowdown and lack catalyst, which would result in profit taking and rebasing after SET Index has risen to a higher level. Thus, Mr. Worachet advised investors to trade cautiously, giving a support level at 1,554-1,543 points and a resistance level at 1,579 points.

 

As for today and this week’s investment theme, Mr. Worachet recommended mid and small-cap stocks with individual catalysts. Meanwhile, the baht depreciation would benefit CPF, SAT and HANA.

 

As for CPF, Mr. Worachet believed that the price could advance beyond Bt30.00 after the security could not seem to be able to break this resistance level. However, the sentiment in the Thai stock market was not in a good trend right now. Nevertheless, the baht depreciation would benefit exporters such as the low-valuation CPF.

If the share price could break the Bt30.75 resistance level, Mr. Worachet expected positive momentum for CPF, giving a fair value of Bt35.00 per share.

Regarding the report of China aiming to construct more swine farm to produce more meat, Mr. Worachet expected the supply in China to increase at a slower pace due to the prolonged ASF.