Kiatnakin Phatra Securities (KKPS), in an in-depth explanation of its sector weightings for the first quarter of 2025, has maintained its position from the 2025 strategy outlook report.
The analyst points to stocks that lean toward fiscal stimulus and rate cut-sensitive sectors with exposure to the US, while typically underweighting sectors with high Chinese exposure, considering that the Chinese growth is anticipated to decelerate next year.
KKPS prioritizes sectors with industry-specific drivers despite the importance given to top-down factors. For 2025, the analyst projects a rather steady performance for the SET index and remains calm by neither being excessively defensive nor overly aggressive.
“Overweight” sectors include 1) commerce (retail trade) due to fiscal uplift and appealing valuations; 2) telcos due to potential growth from consolidation; 3) industrial estates with listed firms outperforming broader FDI trends; 4) consumer finance due to benefits from stimulus and rate cuts; and 5) agribusiness & food due to a positive cycle for meat producers.
Meanwhile, “Underweight” sectors include 1) banks due to margin pressure, weak loan growth, continuing asset quality pressures, and national service; 2) energy due to low oil prices; 3) construction materials due to expectations for SCC’s olefins business to remain depressed; 4) media due to anticipation that macro growth outlook is too weak to re-start adex cycle; and 5) insurance due to premium growth looking less exciting than before while perceiving negative impact from rate cuts.
“Neutral” sectors consist of healthcare, petrochemicals, property, Real Estate Investment Trust (REITs), tourism-related industries, and utilities.
