InnovestX Sees Short-Term SET Volatility, Recommends Buy on Dip Strategy via 3 Trading Themes

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2▲13 ▼0Impact / 5
Summary · why it matters

Natwarin Triphopsakul, Senior Director of the Equity Strategy Team at InnovestX Securities, or InnovestX, assesses that the Thai stock market will remain volatile in the short term due to a lack of new catalysts, amid an investment climate pressured by factors on all sides. These include the Fed's hawkish stance, which is keeping bond yields elevated at multi-year highs, causing fund flows to continue flowing out. This is compounded by energy prices that remain high due to prolonged geopolitical problems, and concerns over domestic flooding, which, although the impact on the economy is expected to be limited, remains an overhang factor creating negative sentiment toward the market. InnovestX therefore recommends a Selective Buy strategy, focusing on Buy on Dip through 3 trading themes with their own specific positive factors. These are: the Domestic Play theme, based on domestic consumption, comprising the commerce group CPALL, CPN, and CRC, the medical group BCH and PR9, and the communications group TRUE; the Flood Defensive & Recovery Plays theme, which benefits from stockpiling of essential goods during emergencies, comprising the commerce group CPALL, BJC, and CRC, extending to demand for home repairs after the waters recede, namely HMPRO and GLOBAL, and the construction materials group DCC; and the Tourism & Mega-Event Play theme, which is expected to benefit from the high season for tourism in the fourth quarter of 2026, supported by factors ranging from China's Golden Week from October 1 to 7 and world-class events such as the World Bank-IMF meetings from October 12 to 18, comprising the tourism group ERW, CENTEL, and AOT, and the retail group CPALL, CPN, and CRC. On external factors, the United States reported August PCE and Core PCE at 3.4% and 3.0% year on year, respectively, unchanged from the previous month and below market expectations, while real consumption expanded 0.6% from the previous month and ADP employment for September rose by 90,000 positions from 36,000 positions, reflecting that the economy remains strong but price pressures have not yet broadened, opening the door for the Fed to wait and assess more data. The market has reduced the odds of an October rate hike to about 35% from 70% last Monday. InnovestX still expects the Fed to raise rates in December and once more in early next year, but September NFP, CPI, and PPI must be monitored to assess the risk that the Fed may accelerate the pace of rate hikes. In China, the PBOC cut the PSL rate used to lend to state policy banks by 25 basis points to 1.50%, while increasing funding support for targeted economic sectors, and the government is subsidizing interest on first-home loans by 1% per year for no more than 5 years. However, the measures still focus on supporting the economy, while falling home prices continue to pressure purchasing power. InnovestX therefore maintains its forecast for China's 2026 GDP at 4.6% and views that the property sector may take at least another year to reach its bottom. Next week, attention will be on Thailand's September inflation, which InnovestX expects to accelerate from 2.53% year on year in the previous month, tracking higher oil and fresh food prices, as well as the final September services PMI for the United States, the eurozone, and Japan. Preliminary PMI readings reflect that the United States and the eurozone are accelerating, while Japan is slowing but still expanding. Also awaited is the report of the September FOMC meeting after the Fed raised rates by 25 basis points to 3.75–4.00%, with a focus on details of discussions about inflation risks, the strength of the economy, and the conditions that would lead to the next rate hike.

Impact on assets 13

Consumer Discretionary▲ · 5 stocks
Industrials▲ · 2 stocks
Airports Of Thailand PCL
AOT
▲ PositiveDemandrelevance

Named in the Tourism & Mega-Event Play theme, expected to benefit from Q4 2026 high season, China's Golden Week, and World Bank-IMF meetings.

Health Care▲ · 2 stocks
Real Estate▲ · 1 stocks
Central Pattana Public Company Limited
CPN
▲ PositiveDemandrelevance

Named in InnovestX's Domestic Play and Tourism & Mega-Event themes, expected to benefit from domestic consumption and Q4 2026 tourism high season.

Digital Finance & Tokenization▲ · 1 stocks
CP ALL Public Company Limited
CPALL
▲ PositiveDemandrelevance

Named across all three trading themes (Domestic Play, Flood Defensive, Tourism & Mega-Event), each citing its own positive demand factors.

Cloud & Digital Infrastructure▲ · 1 stocks
Consumer Staples▲ · 1 stocks
Berli Jucker PCL
BJC
▲ PositiveDemandrelevance

Named in the Flood Defensive & Recovery Plays theme, benefiting from stockpiling of essential goods during emergencies.

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