Daily Market Outlook 11 Sep 2015

1

Please see disclaimer on last page

Down on consolidation and China-related concerns

Expect the SET to adjust down today, as local factors fail to provide enough momentum to offset concerns at the global level. Locally, the delay of the 4G auction is a slight negative while the apparent resilience of the tourism industry provides the bourse with some support. On the global front, however, flat auto sales figures from China and lingering concerns of a Fed hike at the meeting next week look likely to provide enough negative momentum to push the SET down today.

Pick of the day: TISCO (Bt40.00; BUY; AWS 15TP Bt48.00) (Please see our full report today) TISCO Financial Group PCL is our pick of the day as it is the biggest beneficiary of the Bank of Thailand’s policy rate cut in 1H15 due to its high exposure to fixed rate hire-purchase (HP) loans. Lower funding costs resulted in higher NIM, which should help offset an estimated contraction in lending this year. Meanwhile, the government’s recently approved stimulus measures should help ease the burden of high household debt and inject liquidity for SMEs. Stabilized used car prices and slowing new HP-loans imply that deterioration of asset quality should be behind, allowing TISCO to lower its credit cost. We estimate FY15 earnings growth of 3.1%, before accelerating to 11.2% in FY16. According to the CAMEL analysis, TISCO has the strongest fundamentals among the small-sized banks while its valuation is cheap, trading at 1.1x our 2015E BV estimate. Its biggest appeal is its high dividend yield of 5.3%, assuming dividend payout ratio of 40%. A daily buy signal has just appeared, indicating a short-term upward adjustment. However, as a sell signal has remained in its weekly and monthly charts, there is some resistance to the rising movement in the medium term. Nevertheless, the share price is likely to move up to break an immediate target at Bt41.25 before rising further to test the next targets at Bt42.75 and Bt44.00, respectively. (Resistance: 40.50, 41.00, 41.75; Support: 39.75, 39.25, 38.50)

Local issues

Tourism industry expected to show resilience. The

Tourism Council of Thailand (TCT) forecasts that total

foreign tourists and revenue from them will exceed the 2015

targets set by the Tourism and Sports Ministry, thanks to

strong 1H15 performance and expected recovery over

4Q15. The private body expects 30mn foreign visitors and

resultant revenue of Bt1.5tn this year versus the 28.8mn

and Bt1.4tn targeted by the Ministry. (Bangkok Post)

New appointments for SET and SEC. Former Bank of

Thailand governor Chaiyawat Wibulswasdi is expected to

become the new chairman of the Stock Exchange of

Thailand, according to two sources from the stock market,

while Deputy finance permanent secretary Naris

Chaiyasoot will likely take over as chairman of the

Securities and Exchange Commission (SEC).

Major Indices Close Chg %Chg

SET 1,396.16 -0.1 -0.0

SET50 908.29 -1.6 -0.2

SET P/E (x) 18.4

SET P/BV (x) 1.9

SET Div. Yield (%) 3.1

Dow Jones 16,330.40 +76.8 +0.5

S&P 500 1,952.29 +10.3 +0.5

NASDAQ 4,796.25 +39.7 +0.8

UK 6,155.81 -73.2 -1.2

Germany 10,210.44 -92.7 -0.9

France 4,596.53 -68.1 -1.5

Japan 18,299.62 -470.9 -2.5

South Korea 1,962.11 +27.9 +1.4

Hong Kong 21,562.50 -568.8 -2.6

China 3,196.22 -46.9 -1.4

Taiwan 8,268.68 -18.2 -0.2

Singapore 2,888.03 -40.2 -1.4

Malaysia 1,614.02 +10.7 +0.7

Indonesia 4,343.26 -4.0 -0.1

Philippines 6,893.54 -48.9 -0.7

Trading Summary Buy Sell Net

Institution 3,796 2,681 1,115

Proprietary 3,391 4,744 -1,353

Foreign 8,082 7,257 825

Individuals 20,910 21,496 -586

Total Trading Value 36,178 Btmn

Most Active Value Value Close %Chg

JAS 2,781 5.90 -

KBANK 1,314 184.50 +0.3

ADVANC 1,258 238.00 -0.4

CPF 1,248 20.20 +4.1

ITD 1,206 8.15 +2.5

Commodity Futures Close Chg %Chg

US Crude 45.92 +1.8 +4.0

Brent Crude 48.89 +1.3 +2.8

Gold 1,109.30 +7.3 +0.7

FX Rates Close Chg %Chg

USD/THB 36.04 +0.0 +0.0

EUR/USD 1.13 +0.0 +0.0

USD/JPY 120.59 +0.0 +0.0

USD/CNY 6.38 +0.0 +0.0

Source: Bisnews, Bloomberg

Technical picks (support & resistance)

CPF (S: 18.70, R: 21.80); TTA (S: 9.40, R: 11.20); TPIPL

(S: 2.42, R: 2.82); SET (S: 1,381, R: 1,411)

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 11 Sep 2015

2

Please see disclaimer on last page

Later date for 900 MHz auction. The National Broadcasting and

Telecommunications Commission (NBTC) yesterday approved December 15

as the date for the 900-MHz auction, where the NBTC will auction two

licenses, each containing 10 MHz of bandwidth. Earlier the NBTC planned to

auction the 900-MHz spectrum either on November 11, or 10, or 12. (Bangkok

Post) Comment: The delay should not matter much as operators can

launch the new 4G business with spectrum from the first round of

auction and it is just one month later.

Higher PPP investment ceilings being considered. The Transport Ministry

and State Enterprise Policy Office have been instructed to discuss raising the

limits for PPPs in infrastructure development, according to the Public Debt

Management Office (PDMO). Private-sector investment in infrastructure

project PPPs is limited by a cap of Bt500bn a sector meaning the government

budget is the main source of funding. (Bangkok Post)

SPALI (Bt19.00) said the tax incentives could give a boost to overall housing

sales. SPALI estimates its sales would rise by 10-15%, as new demand on

ready-to-transfer units takes only a month or two for decision-making to

transfer. (Bangkok Post)

Global issues Conflicting economic signals: The latest US economic data that showed

very low inflation, in the face of a tightening labor market and strengthening

economic growth, pose a challenge for the Fed's policy-setting committee,

which meets on Sept. 16-17, on whether to raise interest rates. (Reuters)

The dollar nursed broad losses early on Friday and overnight, having

come under selling pressure against the yuan and major currencies. There

was no official announcement of intervention by any governments. The yuan

jumped 1.2% against the dollar overnight. The euro climbed to its highest in

over a week at US$1.1296 in early Asian trade. However, the greenback

managed to hold its ground against the yen and was last at 120.75. (Reuters)

There is no market-moving economic data out of Asia today. Chinese

industrial output and retail sales data due on Sunday will set the tone for the

markets next week. (Reuters)

USA

Wall Street shares finished higher on Thursday in a highly volatile session

as investors were nervous ahead of next week's much-anticipated Federal

Reserve meeting. However, gains in Apple bolstered the day’s market

advance after the iPhone maker unveiled newly easier financing scheme and

newly versatile products. Biotech shares also boosted the market. (Reuters)

US labor market gains momentum in early September: US jobless claims

dropped 6,000 to a seasonally adjusted 275,000 last week. It was the 27th

straight week that claims remained below the 300,000 threshold, which is

usually associated with a strengthening labor market. (Reuters)

US inflation remains very weak: Import prices fell 1.8% in August as the

cost of petroleum and a range of goods dropped, after sliding 0.9% in July. It

was the largest in 7 months and suggested a strong dollar and soft global

demand continued to put downward pressure on imported inflation. Import

prices now have declined in 12 of the last 14 months. In the 12 months

through August, import prices declined 11.4%, the largest drop since

September 2009. (Reuters)

Daily Market Outlook 11 Sep 2015

3

Please see disclaimer on last page

Europe

European stocks broke a three-day run of gains with a drop of nearly

1.5% on Thursday following a difficult session in Asia, as data showed a

decline in Chinese car sales and slowing capital spending in Japan. (Reuters)

Asia Kuroda keeps upbeat view on economy: BOJ Governor Haruhiko Kuroda

acknowledged that recent data has painted a patchy picture of the economic

recovery but stressed that conditions were falling into place for inflation to

head toward his ambitious 2% target. (Reuters)

Japan evacuated about 100,000 people from their homes on Thursday,

after rare torrential rains unleashed floods across eastern Japan. Officials

issued predawn warnings of unusually harsh rainfall to 5mn people. Rainfall

reached 600 mm (24 inches) in the area around Joso, with weather officials

expecting at least 200 mm (8 inches) more in parts of eastern Japan.

(Reuters)

Auto sales in China were flat in the first eight months of the year and

could drop this year for the first time since the market took off in the late

1990s. Sales in the world's largest auto market fell 3% YoY in August to 1.7mn

vehicles, dented by China's slowest economic growth in a quarter of a

century. (Reuters)

Commodities

Gold recovers slightly. After touching the lowest point in four weeks at

US$1,101.11/ounce on Wednesday, gold recovered slightly, going up by

US$5.45 to US$1,111.15/ounce. However, traders expressed concern over

the still uncertain timing of the Fed hike. (Reuters)

Oil up on strong gasoline demand. Despite reports that US crude stock has

increased, indications of strengthening demand for gasoline allowed oil to

adjust up, with NYMEX shooting up US$1.77 (+4.0%) to close at

US$45.92/barrel, while Brent rose US$1.31 (+2.8%) to US$48.89/barrel.

Specifically, the Energy Information Agency reported demand for gasoline

over the past four weeks jumped almost 4.0% YoY. (Reuters)

Daily Market Outlook 11 Sep 2015

4

Please see disclaimer on last page

Mon Tue Wed Thu Fri

1 2 3 4

XD

EGCO

TAE

XD

EASTW

QHOP

THREL

URBNPF

WORK

XD

CTARAF

GOLDPF

KPNPF

MJLF

PTTGC

SCB

SCB-P

7 8 9 10 11

XD

CK

HMPRO

QH

XD

BANPU

BAY

BBL

KBANK

KKP

MBAX

XD

LUXF

SSPF

SUSCO

ZMICO

XD

DRT

MONTRI

PTT

SSTPF

TOP

14 15 16 17 18

XD

AAV

TIP

21 22 23 24 25

28 29 30

Sep-15

Date Regions

7-Sep-15 JPY

8-Sep-15 CNY

8-Sep-15 EU

9-Sep-15 JPY

10-Sep-15 CNY

11-Sep-15 JPY

11-Sep-15 US

Economic Indicators

Leading Economic Index (Jul)

Consumer Confidence Index (Aug)

New Loans (Aug)

Industrial Production (Jul)

Reuters/Michigan Consumer Sentiment Index (Sep)

Trade Balance (Aug)

Gross Domestic Product (Q2)

5

Please see disclaimer on last page

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

Please see disclaimer on last page

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