Bualuang Securities Says Thai Stocks Clear Political Hurdle, Recommends Rotating into Power Producers BGRIM and GPSC and Petrochemicals IVL and PTTGC

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Bualuang Securities stated that the Thai stock market has once again cleared the domestic political hurdle after the court ruled that the lawsuit over barcodes and QR codes on election ballots did not violate the constitution. It views that policies pursued over the past nine months can continue, and that the government's stable footing is a positive for the outlook of Thai equities going forward. It also noted that the market is beginning to see stocks rotate out of the banking group, in line with its recommendation to take profits for a trading round, and is starting to gradually take profits in the commodities group to rotate into the next group such as power producers. As for concerns over US bond yields approaching a peak, it assesses this as consistent with the statistical view, with the implication that a correction tends to follow after hitting a high for the month. It therefore maintains its recommendation to begin accumulating stocks that move inversely to bond yields, and has added power producers BGRIM and GPSC to the portfolio. Meanwhile, the average Dubai price last week fell 11.84 US dollars per barrel week-on-week to 113.06 US dollars per barrel, and Singapore refining margins recovered 3.17 US dollars per barrel week-on-week but remained negative at -1.44 US dollars per barrel. The highlight this week is the sharp recovery in petrochemical spreads across all products, with Ethylene up 34 US dollars per tonne to 278 US dollars per tonne, Propylene up 19 to 283 US dollars per tonne, HDPE up 94 to 423 US dollars per tonne, and PP up 164 to 523 US dollars per tonne, which outperformed the energy group this week. The NEX coal price rose 1% week-on-week to 143.92 US dollars per tonne, while the BDI gained 2% week-on-week to 3,432 points and Supramax rose 2% to 1,779 points. The World Container Index fell 1% week-on-week to 4,468 points. It also recommends switching from refinery stocks into petrochemicals, choosing IVL and PTTGC, while maintaining an equal weight in the energy group versus the market, an overweight in the petrochemical group, and an underweight in the shipping group.

Impact on assets 4

Energy Transition & Power Demand▲ · 2 stocks
Global Power Synergy PCL
GPSC
▲ PositiveMonetaryrelevance

Bualuang added GPSC to its portfolio as a power producer that moves inversely to bond yields, which it expects to correct after peaking.

Critical Materials & Supply Chain▲ · 1 stocks
Indorama Ventures PCL
IVL
▲ PositivePricingrelevance

Petrochemical spreads recovered sharply across all products (HDPE, PP, ethylene, propylene), improving IVL's product margins.

Materials▲ · 1 stocks
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