The United States unexpectedly recorded a dip in retail sales in December, reporting a 1.9 percent decline last month. Previously, economists forecasted no change in retail sales. As a result, the market will be more relaxed about inflation. While U.S. benchmark 2-year and 10-year yields continued to grow.
Country Group Securities stated that despite fears over interest rate hikes have put a serious pressure on the economy and profitability of publicly traded companies, Country Group believes the market has already priced in the risk.
Thailand’s commercial banks will begin announcing their fourth-quarter operating results this week. Country Group expects that the outlook for banking sector earnings will be as bullish as that for TISCO, which has already reported its results last week.
Tisco Financial Group (SET: TISCO) reported the net profit that surprised the market, with its 2021 earnings showing an increase by nearly 12 percent at THB6,781.47 million, primarily contributed by a growth in capital market businesses especially asset management business, the recognition of gain on investment and lower expected credit loss.
Country Group forecast a combined 4Q21 profit of THB24 billion (+12% YoY, -9 percent QoQ) for all banks under its coverage (including Bangkok Bank: BBL, Kasikornbank: KBANK, The Siam Commercial Bank: SCB, and TMBThanachart Bank: TTB), as 4Q21 was the lowest point, which will be driven by loan growth going forward, as well as fee income that will be recovered, while expected credit loss (ECL) will be reduced. Top Pick: BBL and KBANK.
Investors are recommended to monitor Thailand’s trade reports in December. The market anticipates a 16 percent increase in exports and imports, down from a 20 percent increase last year. If data comes in higher than expected, Country Group forecasts a more positive investment atmosphere, recommending focus on laggard stocks, such as BEM, BJC, CPALL, M, MAJOR, MINT, SHR, or short-term accumulation in commodity stocks, like PTTEP, BCP, SPRC, TOP. The SET Index is predicted to move in the range of 1,660-1,690 points this week.
