Summary · why it matters
Chaiyot Jiwangkul, Assistant Director of the Securities Analysis Department at Krungsri Securities Public Company Limited, or KSS, said on the stock news program Stock Market Insight that the current wave of foreign selling is driven mainly by US government bond yields having risen to their highest level in nearly 20 years, with the 10-year US bond yield at around 5.2%. As a result, some investors are shifting money out of risk assets into bonds, which offer higher returns, and if US bond yields do not fall significantly, foreign capital flows, or fund flows, are likely to keep flowing out of risk assets. However, KSS views the selling as a basket portfolio adjustment across regional markets rather than a targeted sell-off of the Thai stock market alone, since the Philippine, Indonesian, and Vietnamese stock markets have all weakened in the same direction. It assesses that the foreign funds that had accumulated net buying earlier are unlikely to flow out entirely, because this reflects short-term concern and risk reduction rather than a full withdrawal of investment from the Thai market. On investment strategy, KSS recommends a focus on selective buying, with the first top pick being Ch. Karnchang Public Company Limited, or CK, which stands to benefit from water management investment and government infrastructure projects. It recommends buying with a target price of 25.35 baht. The other recommended stock is Delta Electronics (Thailand) Public Company Limited, or DELTA, whose third-quarter profit for the year 2569 is estimated at around 8 billion baht, up about 33% from the same period a year earlier, with a buy recommendation and a target price of 320 baht. In addition, DELTA has a supporting factor from passive fund portfolio adjustments. KSS estimates that DELTA's current weight has fallen below 8% and that there is room to increase the weight by another roughly 2% compared with the 10% ceiling, so about 2 billion baht from passive funds could flow in. As for the flood situation, Chaiyot said that if it intensifies and causes widespread damage, the Thai stock market may initially decline before investors turn to assessing government relief and economic stimulus measures. He cited statistics from the major floods in 2554, when after about two weeks to one month the index was able to rebound and rally by another roughly 10%, but stressed that past events should not be compared directly with the current situation.
CH. Karnchang PCL
Delta Electronics (Thailand) Public Company Limited
Bank of Ayudhya PCL