Daily Market Outlook 31 Aug 2015

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Up on recovery hopes

Expect the SET to adjust up slightly today, thanks to local factors that provide upwards momentum amidst a somewhat ambivalent mood in the global markets. Locally, the arrest and general progress regarding the Erawan shrine bombing would have gone a long way in reassuring tourists and mitigating fears of continued slowdown in the sector. Meanwhile, general support for grass-roots measures from the FPO also bodes well for consumer spending for the remainder of the year. Globally, however, the hawkish U-turn by Fed officials will put pressure on equities. Oil’s recovery provides some extra support for the SET.

Pick of the day: PTTGC (Bt57.00; BUY; AWS 15TP Bt71.60, Bloomberg 15TP Bt70.29) PTTGC enjoyed strong earnings in 1H15 as global crude prices surged more than 30% during the period. However, a downbeat earnings performance in 3Q15 is expected for a gas-based downstream polyolefins cracker and refinery like PTTGC after crude prices fell more than 20% since late June, incurring inventory losses. Nevertheless, we believe crude prices (Dubai) are at or near the trough of this round at around US$40/barrel. Therefore, the upcoming 3Q15 earnings results of PTTGC should represent the lowest quarterly performance of the year. HDPE-Naphtha price spreads still persist at high levels despite concerns over China’s economic slowdown, reflecting strong basic demand in the region. We project EPS growth for this year for PTTGC at a strong 101%, assuming no inventory gains or losses this year, before decelerating to 14% in 2016. PTTGC recently announced a share repurchase program over the next 6 months that is not to exceed 2% of total issued capital, after the share price traded below its BVPS of Bt52.06, which reflects a crucial downside limit. PTTGC also announced an interim 1H15 dividend payment of Bt1.50/share, offering a pleasing 5.3% annualized dividend yield. The XD date is on 4 Sep and dividend will be paid on 22 Sep.

Local issues

Bombing investigation breakthrough. On Saturday night

Thai authorities arrested a foreign man in an apartment in

Nong Chok district where bulk supplies of materials for

making bombs were found. Police and military officers are

working together to find a second suspect, a Thai woman

believed to have assisted the suspect and other

accomplices. (Bangkok Post)

Property tax laws to be adjusted. To avoid loopholes

which facilitate tax avoidance, the Revenue Department will

amend the law to allow the use of market prices, not just

appraisal prices for assessing income tax payments.

(Bangkok Post)

Major Indices Close Chg %Chg

SET 1,365.94 +7.9 +0.6

SET50 893.77 +7.5 +0.8

SET P/E (x) 18.0

SET P/BV (x) 1.8

SET Div. Yield (%) 3.2

Dow Jones 16,643.01 -11.8 -0.1

S&P 500 1,988.87 +1.2 +0.1

NASDAQ 4,828.33 +15.6 +0.3

UK 6,247.94 +55.9 +0.9

Germany 10,298.53 -17.1 -0.2

France 4,675.13 +17.0 +0.4

Japan 19,136.32 +561.9 +3.0

South Korea 1,937.67 +29.7 +1.6

Hong Kong 21,612.39 -226.2 -1.0

China 3,234.61 +151.0 +4.9

Taiwan 8,019.18 +194.6 +2.5

Singapore 2,955.94 +10.5 +0.4

Malaysia 1,612.74 +11.0 +0.7

Indonesia 4,446.20 +15.6 +0.4

Philippines 7,098.81 +76.7 +1.1

Trading Summary Buy Sell Net

Institution 7,686 3,758 3,928

Proprietary 4,740 4,416 325

Foreign 11,872 13,097 -1,225

Individuals 20,779 23,806 -3,027

Total Trading Value 45,077 Btmn

Most Active Value Value Close %Chg

PTT 4,289 269.00 +3.9

KTB 2,667 18.00 -3.2

PTTEP 2,660 81.00 +8.0

KBANK 2,016 178.00 -1.1

ADVANC 1,258 230.00 -

Commodity Futures Close Chg %Chg

US Crude 45.22 +2.7 +6.3

Brent Crude 50.05 +2.5 +5.2

Gold 1,134.00 -11.4 -1.0

FX Rates Close Chg %Chg

USD/THB 35.82 +0.2 +0.5

EUR/USD 1.12 -0.0 -0.6

USD/JPY 121.70 +0.7 +0.6

USD/CNY 6.39 -0.0 -0.3

Source: Bisnews, Bloomberg

Technical picks (support & resistance)

SET (S: 1,340, R: 1,400)

Thailand Research Department

Mr. Warut Siwasariyanon (No.17923) Tel: 02 680 5041

Mr. Krit Suwanpibul (No.17968) Tel: 02 680 5090

Mr. Narudon Rusme, CFA (No.29737) Tel: 02 680 5056

Mr. Napat Siworapongpun (No.49234) Tel: 02 680 5094

Daily Market Outlook 31 Aug 2015

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Seven business clusters to get privileges. Deputy PM Somkid recently

urged the BOI and Industry Ministry to speed up studying the possibility of

offering additional privileges to those who invest in seven business clusters

in SEZs, specifically food processing, automotive and parts, electronics and

parts, petrochemical, information technology, rubber and textiles. (Bangkok

Post)

Fiscal Policy Office supports plan to boost grass-root economy. The

FPO said state spending could and should be utilized to drive the economy

because the country’s financial stability is strong thanks to good past fiscal

discipline and low unemployment, and public debt is only 42% to GDP. (The

Nation)

Global issues Hawkish signal from Jackson Hole: Top Federal Reserve officials kept the

door open for an interest rate hike in September. Fed Vice Chairman Stanley

Fischer, speaking at the central bank' conference in Jackson Hole, Wyoming,

said recent volatility in global markets could ease and possibly pave the way

for a rate hike. St. Louis Fed President James Bullard also said he still

favoured hiking rates next month. (Reuters)

Crucial data this week: Global market players will be watching factory and

service sector activity surveys from China on Tuesday and US nonfarm

payroll numbers due on Friday. Fed officials would be hesitant to hike interest

rates in September if global markets continued to be volatile into mid-

September. (Reuters)

USA

Wall Street was moderately lower on Friday after comments by Fed Vice

Chairman Stanley Fischer on CNBC during the central banks’ conference in

Jackson Hole suggested that a September rate rise was more likely than

some investors expected. (Reuters)

Europe

European stocks closed out a rollercoaster week with modest gains on

Friday, although a leading regional equity index was still on track for its worst

month in four years due to underlying concerns over China. (Reuters)

Asia Japan's industrial output unexpectedly fell 0.6% MoM in July, in a sign

that weak overseas demand and high inventories are weighing on production.

This compared with economists' estimate of a 0.1% increase and followed a

1.1% rise in June. Manufacturers surveyed by the Ministry of Economy, Trade

and Industry expect output to rise 2.8% in August and decrease 1.7% in

September. (Reuters)

Slowing economy takes toll on top Chinese manufacturers. Major

construction machinery makers Zoomlion Heavy Industry Science and

Technology Co. Ltd and Sany Heavy Industry Co. Ltd., the former booking a

RMB309.8mn (US$48.51mn) net loss, down from RMB900.1mn net profit in

1H2014. Sany reported a 75.6% fall in net income to RMB334.8mn over

1H15. (Reuters)

Daily Market Outlook 31 Aug 2015

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Some good news from India. Monday sees the release of India’s 2Q15

GDP, where a Reuters poll of economists expect annualized growth of 7.4%,

just below 7.5% in 1Q15, the highest amongst major economies. (Reuters)

Comment: With a size only one-fifth of China’s, India’s economy is in no

position to support global growth as China’s would be.

Commodities

Gold up on technical and dovish Fed views. Gold spot in the US adjusted

up US$8.25 to US$1,133.56/ounce, supported by technical considerations

and dovish Fed views, as Stanley Fisher, Vice Chairman of the Fed and other

Fed officials admitted the global equities selloff would affect the timing of a

rate hike. (Reuters)

Oil bolstered by various factors. Oil adjusted up strongly on Friday,

boosted by short-covering, conflict in Yemen and hurricane in the US gulf, as

well as the closure for maintenance of US refineries. NYMEX shot up

US$2.66 or 6.3% to close at US$45.22/barrel, while Brent shot up US$2.49

or 5% to US$50.05/barrel. (Reuters)

Daily Market Outlook 31 Aug 2015

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Mon Tue Fri

3 4 7

XD

PTL

XD

CPNCG

CPNRF

CRYSTAL

PPF

PTTEP

SIRIP

TIW

TRUEIF

XD

POPF

TGROWT

H

TPC

XD

EPG

XD

JASIF

LHPF

LHSC

QHHR

QHPF

SSTSS

UNIPF

10 11 14

XD

DCC

SCC

SCCC

XD

ADVANC

XD

UOB8TF

17 18 21

XD

MACO

SNC

XD

AIT

BAFS

BEC

FSMART

XD

BKKCP

BTSGIF

CBG

CSL

GC

LPN

MIPF

PDG

SMPC

TIF1

XD

CHG

IVL

JSP

MAJOR

MAKRO

PM

SGP

SPG

SWC

SYNEX

XD

ARROW

BROOK

CSS

FPI

KCE

PCSGH

PHOL

PPP

SAT

SPALI

SPF

TTW

24 25 28

XD

AUCT

AYUD

BECL

GLOW

INTUCH

M

MCS

OTO

SAMTEL

SIM

TVO

UEC

XD

ANAN

BH

BH-P

BLA

CCET

CPF

DEMCO

DSGT

EPCO

FORTH

FUTUREPF

GLAND

GPSC

ICHI

IMPACT

JUBILE

KAMART

KBS

KIAT

MALEE

MBKET

MNIT

OISHI

PT

QLT

SAMART

SEAFCO

SUTHA

TNDT

TOG

TTCL

TUF

XD

BCP

BEAUTY

BKI

CPTGF

DTCPF

GCAP

HTECH

KCAR

LH

MC

MEGA

MNIT2

MNRF

M-PAT

M-STOR

SABINA

SMIT

SNP

SPACK

SRICHA

SYMC

TASCO

TCAIF

TFUND

THIF

TLOGIS

TNITY

TRIF

TSR

TTLPF

UVAN

VNG

WINNER

XD

AH

BJC

LALIN

ROJNA

SYNTEC

TKS

XD

IHL

RATCH

SENA

31

XD

PB

Thu

27

20

13

65

26

19

12

Wed

August-15

Date Regions

31-Aug-15 EU

1-Sep-15 CNY

2-Sep-15 EU

3-Sep-15 EU

4-Sep-15 EU

4-Sep-15 US

4-Sep-15 US

Economic Indicators

Consumer Price Index (Aug)

ECB Interest Rate Decision

Gross Domestic Product (Q2)

Nonfarm Payrolls (Aug)

Unemployment Rate (Aug)

Caixin Manufacturing PMI

Producer Price Index (Aug)

5

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CG Rating

Corporate Governance Report disclaimer

The disclosure of the survey result of the Thai Institute of Directors

Association (“IOD”) regarding corporate governance is made pursuant

to the policy of the Office of the Securities and Exchange Commission.

The survey of the IOD is based on the information of a company listed

on the Stock Exchange of Thailand and the Market for Alternative

Investment disclosed to the public and able to be accessed by a

general public investor. The result, therefore, is from the perspective of

a third party. It is not an evaluation of operation and is not based on

inside information.

The survey result is as of the date appearing in the Corporate

Governance Report of Thai Listed Companies. As a result, the survey

result may be changed after that date, Asia wealth Securities Company

Limited does not conform nor certify the accuracy of such survey result.

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2014.

Score Range Number of Logo Description

90 – 100

80 – 89

70 – 79

60 – 69

50 – 59

Below 50

No logo given

Excellent

Very Good

Good

Satisfactory

Pass

N/A

BAFS EGCO IRPC KTB PTTEP SAT SIM TOPBCP GRAMMY IVL MINT PTTGC SC SPALIBTS HANA KBANK PSL SAMART SCB TISCOCPN INTUCH KKP PTT SAMTEL SE-ED TMB

AAV BIGC DELTA HMPRO NBC PJW SAMCO SVI TOGACAP BKI DRT ICC NCH PM SCC TCAP TRCADVANC BLA DTAC KCE NINE PPS SINGER TF TRUEANAN BMCL DTC KSL NKI PR SIS THAI TSTEAOT BROOK EASTW LANNA NMG PRANDA SITHAI THANI TSTHASIMAR CENTEL EE LH NSI PS SNC THCOM TTAASK CFRESH ERW LHBANK OCC PT SNP TIP TTWASP CIMBT GBX LOXLEY OFM QH SPI TIPCO TVOBANPU CK GC LPN PAP RATCH SSF TK UACBAY CNT GFPT MACO PE ROBINS SSI TKT VGIBBL CPF GUNKUL MC PG RS SSSC TNITY VNTBECL CSL HEMRAJ MCOT PHOL S&J STA TNL WACOAL

2S BEAUTY CSS IHL MFEC PPM SKR TBSP TSC ZMICOAF BEC DCC INET MJD PPP SMG TEAM TSCAH BFIT DEMCO IRC MODERN PREB SMK TFD TTCLAHC BH DNA IRCP MONO PRG SMPC TFI TUFAIT BJC EA ITD MOONG PRIN SMT THANA TVDAJ BJCHI ESSO KBS MPG PTG SOLAR THIP TWFPAKP BOL FE KGI MTI QLT SPC THREL UMIAKR BTNC FORTH KKC NC QTC SPCG TIC UPAMANAH BWG FPI KTC NTV RCL SPPT TICON UPFAMARIN CCET GENCO L&E NUSA SABINA SST TIW UPOICAMATA CGD GL LRH NWR SALEE STANLY TKS UTAP CGS GLOBAL LST NYT SCBLIF STEC TLUXE UVAPCO CHOW GLOW MAJOR OGC SCCC STPI TMI UWCAPCS CI GOLD MAKRO OISHI SCG SUC TMT VIHAQUA CKP HOTPOT MATCH PACE SEAFCO SWC TNDT WAVEARIP CM HTC MBK PATO SEAOIL SYMC TPC WHAAS CMR HTECH MBKET PB SFP SYNEX TPCORP WINASIA CSC HYDRO MEGA PDI SIAM SYNTEC TRT WINNERAYUD CSP IFS MFC PICO SIRI TASCO TRU YUASA

Source: Thai Institute of Directors (IOD)

6

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Contact

Branch Address Phone Fax

Head Office 540 Floor 7,14,17 , Mercury Tower, Ploenchit Road, Lumphini,

Pathumwan Bangkok 10330

02-680-5000 02-680-5111

Silom 191 Silom Complex Building,21st Floor Room 2,3-1 Silom Rd.,

Silom, Bangrak, Bangkok, 10500 Thailand

02-630-3500 02-630-3530-1

Asok 159 Sermmitr Tower, 17th FL. Room No.1703, Sukhumvit 21

Road, Klong Toey Nua, Wattana, Bangkok 10110

02-261-1314-21 02-261-1328

Pinklao

7/3 Central Plaza Pinklao Office Building Tower B, 16th Flr.,

Room No.1605-1606 Baromrajachonnanee Road, Arunamarin,

Bangkoknoi, Bangkok 10700

02-884-7333 02-884-7357,

02-884-7367

Chaengwattana

99/99 Moo 2 Central Plaza Chaengwattana Office Tower, 22nd

Flr., Room 2204 Chaengwattana Road, Bang Talad, Pakkred,

Nonthaburi 11120

02-119-2300 02-8353006

Chaengwattana 2

9/99 Moo 2 Central Plaza Chaengwattana Office Tower, 22nd Flr.,

Room 2203 Chaengwattana Road, Bang Talad, Pakkred,

Nonthaburi 11120

02-119-2388 02-119-2399

Mega Bangna 39 Moo6 Megabangna, 1st Flr., Room 1632/7 Bangna-Trad

Road, Bangkaew Bangplee, Samutprakarn 10540

02-106-7345 02-105-2070

Rayong 356/18 Sukhumvit Road, Nuen-Phra Sub District, Muang

District, Rayong Province 21000

038-808200 038-807200

Khonkaen 26/9 Srijanmai Road, Tamboonnaimuang, Khon Khaen

40000

043-334-700 043-334-799

Chonburi 55/22 Moo 1, Samed Sub District, Muang District, Chonburi

20000

038-053-858 038-784-090

Chaseongsao 233-233/2 Moo2 1st Flr., Sukprayoon Road, Na Meung Sub-

District, Meung District, Chachoengsao 24000

038-981-587 038-981-591