Daily Market Outlook 26 Jul 2016

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Catch breath

Expect the market to tread water today after Wall Street pulled back from record levels and ahead of this week’s two major central bank meetings in the US and Japan. Oil prices fell to 3-month lows on global supply glut which will likely to weigh on energy shares. Locally, more SME assistance is coming, including tax breaks for large corporations that help SMEs, a Bt2.3bn venture capital fund to support SMEs, and SME start-up funds. Although these measures have limited direct impact on market sentiment, they will bring about positive long-term results to the economy.

Pick of the day: IRPC (Bt5.00; NR; Bloomberg TP Bt5.61)

IRPC Pcl. is our pick of the day for the company’s bright

earnings outlook supported by the recent commercial

operations of its UHV project (Upstream Project for Hygiene &

Value Added Products). The UHV project will markedly

improve its refining margin as well as utilization run rate as it

will enable IRPC to replace more than half of its low-valued

fuel products with higher-valued light distillates coupled with

much more propylene output. As a consequence, the

company’s ROE will improve along with earnings base

expansion in the long run. We expect 2Q16 earnings to remain

at a high level of Bt3.5bn (+17% QoQ, -17% YoY) thanks to

gains from inventory position and robust petrochemical price

spread. The UHV project should gradually improve IRPC’s

operating performance throughout the rest of this year before

achieving the full benefit from 1Q17. According to Bloomberg

consensus estimate, EPS this year would grow by 8% YoY to

Bt0.50 before increasing 4% to Bt0.52 in 2017, from the high

base in 2015. IRPC’s current valuation is considered

undemanding with a relatively low prospective 2016 PBV of

1.2x, along with a pleasing dividend yield of 4.5% p.a. The

daily and monthly buy signals have suggested strength in

IRPC’s price chart, awaiting a weekly buy signal to occur if the

share closes above Bt5.00 by the end of this week. IRPC is

likely to move up to test a primary target at Bt6.70. There is a

stop loss at Bt4.82. (Resistance: 5.05, 5.10, 5.15; Support:

4.96, 4.90, 4.84)

Local issue Tax measures for helping SMEs to cabinet approval

today. Finance Minister Apisak Tantivorawong will seek

cabinet approval for the new tax measures today. These

include a tax break on expenses for large corporations that

help SMEs and a tax break for investments in social

development projects. The measures are expected to be

effective immediately after approval through the end of

2018. (Bangkok Post) Comment: Another attempt from

the state to strengthen SMEs as they are the group

most likely hit by economic slowdown.

Major Indices Close Chg %Chg

SET 1,512.66 +3.5 +0.2

SET50 959.62 +0.6 +0.1

SET P/E (x) 23.2

SET P/BV (x) 2.0

SET Div. Yield (%) 3.1

Dow Jones 18,493.06 -77.8 -0.4

S&P 500 2,168.48 -6.6 -0.3

NASDAQ 5,097.63 -2.5 -0.0

UK 6,710.13 -20.4 -0.3

Germany 10,198.24 +50.8 +0.5

France 4,388.00 +6.9 +0.2

Japan 16,620.29 -7.0 -0.0

South Korea 2,012.32 +2.0 +0.1

Hong Kong 21,993.44 +29.2 +0.1

China 3,016.80 +4.0 +0.1

Taiwan 8,991.67 -21.5 -0.2

Singapore 2,929.85 -15.5 -0.5

Malaysia 1,668.26 +10.8 +0.7

Indonesia 5,220.80 +23.6 +0.5

Philippines 8,049.13 +23.8 +0.3

Trading Summary Buy Sell Net

Institution 5,849 6,005 -156

Proprietary 6,102 6,164 -62

Foreign 13,990 12,085 1,905

Individuals 27,747 29,434 -1,687

Total Trading Value 53,688 Btmn

Most Active Value Value Close %Chg

BEM 2,953 7.35 7.3 AOT 2,077 397.00 1.0 BANPU 1,980 15.40 -3.1 IVL 1,707 32.50 -1.5 IRPC 1,664 5.00 1.6

Commodity Futures Close Chg %Chg

US Crude 44.19 -0.6 -1.3

Brent Crude 45.69 -0.5 -1.1

Gold 1323.40 -7.6 -0.6

FX Rates Close Chg %Chg

USD/THB 35.01 +0.1 +0.2

EUR/USD 1.10 +0.0 +0.2

USD/JPY 105.76 -0.3 -0.3

USD/CNY 6.68 +0.0 +0.0

Source: Bisnews, Bloomberg

Technical picks (support & resistance)

QH (S: 2.64, R: 3.06); GPSC (S: 37.00, R: 41.25); KBANK (S: 176.50, R: 185.50); SET (S: 1,500, R: 1,525)

Thailand Research Department

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

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

Mrs. Vajiralux Sanglerdsillapachai (No. 17385) Tel: 02 680 5077

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

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

Daily Market Outlook 26 Jul 2016

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Venture capital fund to assist SMEs. A venture capital fund, collaborated

between KTB (Bt17.20; BUY; 16 AWS TP Bt20.00), SET, and NSTDA, is

expected to officially launch in 3Q16. The fund is named the SME Private Equity

Trust Fund worth Bt2.3bn and is expected to help SMEs access financial

sources to expand their businesses, especially those using high technology to

create innovative products and SME startups with high potential (Bangkok Post)

Comment: The fund is set in response to the cabinet order to help SMEs,

which eventually would stimulate the country’s economy.

To streamline export process. In response to Prime Minister Prayut Chan-o-

cha's directive to enhance the export process for rice, sugar, rubber and frozen

goods and hazardous products, the commerce ministry initially plans to

streamline the country’s rice export process by reducing the number of

procedures rice exporters must complete from 14 to four through the use of

electronic systems. Ministry estimates exporters’ travel and paper costs would

significantly reduce from 12,140 baht to 2,076 baht for each contract. (Bangkok

Post) Comment: The streamlining of the rice export process would be a

role model for the export of the other products.

Global issues The Federal Reserve is seen as unlikely to raise interest rates on

Wednesday. Improving economic data has increased expectations that the Fed

will raise rates in December. Fed fund futures on Monday indicate a 56%

chance of a rate hike in December, up from 48% on Friday. (Reuters)

US Treasury yields climbed on Monday to four-week highs following a weak

US$26bn two-year note sale, part of US$88bn of coupon-bearing government

debt being auctioned this week. The yield on the two-year note was up over 1

basis point to 0.723%. Benchmark 10-year Treasury notes were last down 2/32

in price for a yield of 1.575%, up almost 1 basis point from Friday. (Reuters)

The dollar was steady against the euro and yen on Monday as investors

look ahead to central bank meetings with the Fed due to conclude a two-day

meeting on Wednesday and the BOJ due to meet on Friday. The dollar was

little changed on the day at ¥106.04, and steady against the euro at US$1.0984.

(Reuters)

USA Wall Street shares ended lower on Monday, pulling back from record highs,

as oil fell to three-month lows, weighing on energy shares and leading the

market down. Investors also awaited the rate decision from Federal Reserve’s

2-day policy meeting that begins today and an avalanche of quarterly reports.

(Reuters)

Europe European stocks rose on Monday, with low-cost airline Ryanair climbing after

it issued a bullish outlook while shares in William Hill surged on bid interest from

its rivals. (Reuters)

The IFO business morale survey showed the resilience of Germany,

Europe's biggest economy, to the turmoil triggered by the Brexit. Even though

the IFO reading fell to 108.3 in July from 108.7 in June, it still came in stronger

than the Reuters consensus forecast for a reading of 107.5. (Reuters)

Asia Japan's government is likely to inject ¥6tn (US$57bn) in direct fiscal

outlays into the economy over the next few years under a planned stimulus

package, double the amount initially planned, the Nikkei newspaper reported

Daily Market Outlook 26 Jul 2016

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on Tuesday. The total size of the package, which could be announced as soon

as 2 August, could exceed ¥20tn. (Reuters)

China scored a diplomatic victory on Monday as Southeast Asian nations

dropped a US-backed proposal to mention an international court ruling against

Beijing's territorial claims in the South China Sea in a joint statement. The

deadlock between ASEAN foreign ministers was broken only when the

Philippines withdrew its request to mention the ruling in the face of resolute

objections from Cambodia, China's closest ASEAN ally. (Reuters)

The yuan edged higher on Monday but stayed within sight of last week's near-

six year low against the dollar as investors worried that improved economic

activity in 2Q16 was a blip with weakness likely in coming months. The spot

market opened at 6.6830 per dollar and was changing hands at 6.6774 at

midday, 0.12% away from the midpoint of 6.6860 per dollar, and weaker than

Friday's setting of 6.6669. (Reuters)

Commodities Oil prices fell more than 2% on Monday, with US crude hitting a three-month

low, on rising concerns that a global glut of crude and refined products would

pressure markets, delaying a long-anticipated rebalance in the market. US

crude settled down US$1.06 at US$43.13 a barrel, after touching a three-month

low of US$42.97 during the session. Brent crude futures ended the session

down 97 cents at US$44.72 a barrel, after hitting their lowest since May 10 at

US$44.55. (Reuters)

Gold pared losses on Monday as the dollar and world stock markets turned

lower ahead of central bank meetings in the US and Japan. Spot gold was down

0.2% at US$1,319.63 an ounce. US gold futures for August delivery settled

down US$3.9 (-0.29%) at US$1,319.50. (Reuters)

Daily Market Outlook 26 Jul 2016

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Date Regions

25-Jul-16 US

26-Jul-16 US

27-Jul-16 US

27-Jul-16 US

27-Jul-16 US

28-Jul-16 JPY

28-Jul-16 JPY

29-Jul-16 JPY

29-Jul-16 JPY

29-Jul-16 EU

29-Jul-16 EU

29-Jul-16 EU

29-Jul-16 EU Consumer Price Index - Core (YoY) (Jul)

Economic Indicators

Dallas Fed Manufacturing Business Index (Jul)

Fed Interest Rate Decision

BoJ Monetary Policy Statement

Markit PMI Composite (Jul)

Consumer Price Index (YoY) (Jul)

Fed's Monetary Policy Statement

Durable Goods Orders (Jun)

National Consumer Price Index (YoY) (Jun)

BoJ Press Conference

BoJ Interest Rate Decision

Gross Domestic Product s.a. (QoQ) (Q2)

Gross Domestic Product s.a. (YoY) (Q2)

Mon Tue Wed Thu Fri

1

4 5 6 7 8XD

JAS

XD

BLAND

XD

LTX

11 12 13 14 15XD

VGI

XD

STANLY

18 19 20 21 22XD

TMW

25 26 27 28 29XD

DTAC

XD

TLGF

XD

CMO

XD

BTS

Jul-16

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CG Rating

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

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2015.

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.

ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTC EASTW EGCO GRAMMYHANA HMPRO INTUCH IRPC IVL KBANK KCE KKP KTB LHBANK LPN MCOT MINTMONO NKI PHOL PPS PS PSL PTT PTTEP PTTGC QTC RATCH ROBINS SAMARTSAMTEL SAT SC SCB SCC SE-ED SIM SNC SPALI THCOM TISCO TKT TMBTOP VGI WACOAL

AAV ACAP AGE AHC AKP AMATA ANAN AOT APCS ARIP BMCL BOL BROOKBWG CENTEL CFRESH CHO CIMBT CM CNT COL CPF CPI CSL DCC DELTADEMCO ECF EE ERW GBX GC GFPT GLOBAL GUNKUL HEMRAJ HOTPOT HYDRO ICCICHI INET IRC KSL KTC LANNA LH LOXLEY LRH MACO MBK MC MEGAMFEC NBC NCH NINE NSI NTV OCC OGC OISHI OTO PAP PDI PEPG PJW PM PPP PR PRANDA PREB PT PTG Q-CON QH RS S&JSABINA SAMCO SCG SEAFCO SFP SIAM SINGER SIS SITHAI SMK SMPC SMT SNPSPI SSF SSI SSSC SST STA STEC SVI SWC SYMC SYNTEC TASCO TBSPTCAP TF TGCI THAI THANA THANI THIP THRE THREL TICON TIP TIPCO TKTKS TMI TMILL TMT TNDT TNITY TNL TOG TPC TPCORP TRC TRU TRUETSC TSTE TSTH TTA TTCL TTW TU TVD TVO TWPC UAC UT UVVNT WAVE WINNER YUASA ZMICOVNT WAVE WINNER YUASA ZMICO

2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAH AMARIN AP APCOAQUA AS ASIA AUCT AYUD BA BEAUTY BEC BFIT BH BIG BJC BJCHIBKD BTNC CBG CGD CHG CHOW CI CITY CKP CNS CPALL CPL CSCCSP CSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIRE FOCUS FORTHFPI FSMART FSS FVC GCAP GENCO GL GLAND GLOW GOLD GYT HTC HTECHIEC IFEC IFS IHL IRCP ITD JSP JTS JUBILE KASET KBS KCAR KGIKKC KTIS KWC KYE L&E LALIN LHK LIT LIVE LST M MAJOR MAKROMATCH MATI MBKET M-CHAI MFC MILL MJD MK MODERN MOONG MPG MSC MTIMTLS NC NOK NUSA NWR NYT OCEAN PACE PATO PB PCA PCSGH PDGPF PICO PL PLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCIRCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCN SCP SEAOIL SIRISKR SMG SOLAR SORKON SPA SPC SPCG SPPT SPVI SRICHA SSC STANLY STPISUC SUSCO SUTHA SYNEX TAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TICTIW TLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR UMI UP UPFUPOIC UREKA UWC VIBHA VIH VPO WHA WIN XO

Source: Thai Institute of Directors (IOD)

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CG Rating

ขอมล Anti-Corruption Progress Indicator ของบรษทจดทะเบยน

ระดบ 1ACD AEONTS AFC AIRA AJ ALUCON AMC AQUA ARIP AUCT BAT-3K BIG BJCBLISS BMCL BOL BRR BSBM CBG CCET CCN CGD CMR CPH CSC CSPCTW DCON DRACO DSGT DTCI E EMC ESSO FOCUS FSMART GIFT GLANDGRAND GUNKUL HFT HTECH IHL ILINK ITD JSP KDH KTIS KTP LEE LSTMAJOR MATCH MAX M-CHAI MDX MIDA ML MPIC NC NEP NNCL NWR OHTLPICO PK PL PPM PRAKIT PRECHA PRIN PSTC PYLON RAM RICH RS SANKOSAUCE SAWAD SAWANG SCN SEAFCO SF SHANG SIRI SMART SMM SOLAR SPACK SPGSPPT SPVI STA STAR SVH SVOA SWC TAPAC TC TCCC TCJ TCOAT THTKS TNH TNPC TPA TPAC TPOLY TRC TRUBB TSE TTA TTI TTL TTTMTWP TWZ U UMS UPA UPOIC UTP UVAN VARO VI VIBHA VIH VTEWG

ระดบ 22S ABICO AF AKP AMARIN AMATA AOT APCO AYUD BEAUTY BFIT BH BKDBLAND BTNC CCP CI CSR CSS EFORL EPCO FE FNS FVC GEL GLOBALHEMRAJ IEC IFS INET JUTHA KASET KCAR KKC KSL L&E LALIN LTX MMALEE MBK MBKET MEGA MK MPG MTLS NCH NCL NPP OCC OCEAN PBPCA PRINC QH ROCK RPC S&J SGP SIAM SIS SKR SMG SMIT SORKONSUSCO TAKUNI TEAM TF TIC TIP TIPCO TMC TMI TPP TRT TRU TRUETSC TSI TTW TVD TVO UKEM UNIQ UWC VNG WIIK WIN XO

ระดบ 3AABC ACAP ADVANC AEC AGE AH AIE AMANAH ANAN AP APCS APURE ASASIA ASIAN ASIMAR BIGC BROOK BTS BWG CEN CENTEL CFRESH CHARAN CHO CHOTICM CNT COL CPALL CPF CPI CPL DELTA DEMCO DIMET DNA DTAC EAECF EE EVER FPI GBX GC GFPT GLOW HMPRO HOTPOT ICC ICHI IFECINOX INSURE IRC JAS JTS JUBILE KC KTC KYE LHK LPN LRH MAKROMC MCOT MFC MFEC MINT MJD MONO MOONG NBC NDR NINE NMG NSINTV OGC PACE PCSGH PDI PG PHOL PLAT PPS PR PRANDA PREB PSQLT RATCH RML ROBINS ROJNA RWI SAMCO SCCC SCG SEAOIL SE-ED SENA SINGERSITHAI SMK SMPC SPALI SPC SPCG SPI SRICHA SSI STANLY SUPER SVI SYMCSYNEX SYNTEC TASCO TCMC TFI THAI THRE THREL TICON TKT TLUXE TNL TPCORPTMILL TMT TSTE TSTH TTCL TU TVI UOBKH UREKA VGI VNT WACOAL WHAZMICO

ระดบ 3BAAV AHC AI AIT AKR ARROW ASK BA BDMS BEC BECL BJCHI BUICGH CHG CHOW CIG CITY CK CKP COLOR CWT EARTH EASON EPG F&DFANCY FIRE FMT FORTH GENCO GL GOLD GPSC GRAMMY HYDRO IRCP IT JCTKCM KWC LH LIT LOXLEY MACO MANRIN MATI MODERN MSC NOBLE NOK NPKNUSA OISHI OTO PAF PAP PATO PF PJW PLANB PLE POLAR PRG PTLQ-CON QTC RCI S11 SALEE SAM SAMART SAMTEL SAPPE SC SCP SFP SIMSLP SMT SPA SPORT SSC SST STEC STPI SUC SUTHA T TAE TBSPTCC TFD TGCI TGPRO THANA THIP TIW TK TMW TNDT TOPP TPC TPCHTPIPL TSR TT TYCN UAC UBIS UEC UMI UP UPF UT UV VPOWAVE WINNER YUASA

ระดบ 4ASP BAFS BANPU BAY BBL BKI BLA CIMBT CNS CSL DCC DRT DTCEASTW ECL EGCO ERW FSS GCAP HANA HTC INTUCH IRPC IVL KBANK KCEKGI KKP KTB LANNA LHBANK MTI NKI PSL PTG PTTEP SABINA SCB SNCSNP SSF SSSC TCAP THCOM TISCO TIMB TMD TNITY TOG

ระดบ 5BCP CPN GYT PE PM PPP PT PTT PTTGC SAT SCC THANI TOP

ไมเปดเผยหรอไมมนโยบายA ACC AJD AQ BCH BGT BROCK BSM BTC CHUO CPR CRANE EICFER JMART JMT KAMART KBS KIAT LDC MBAX MCS METCO NEW NEWS NYTPAE PDG PERM PMTA POST RCL RICHY ROH S SIMAT TCB TR TSFTVT WORKหมายเหตระดบ 1 : มนโยบายระดบ 2 : ประกาศเจตนารมณระดบ 3 : มมาตรการปองกน ซงทง 2 กรณ ถอเปนผลการประเมนในระดบเดยวกน

3A : บรษทมการประกาศเจตนารมณเขารวมโครงการ CAC หรอภาค3B : บรษทมค ามน และนโยบายของบรษท แตมไดประกาศเจตนารมณเขารวมโครงการ CAC หรอภาค

ระดบ 4 : ไดรบการรบรองระดบ 5 : ขยายผลสผท เกยวของ

7

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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