Oil woke up to the downside over Thailand’s long weekend (started on Thursday night) and is now -12%. This naturally has a negative impact for the Thai market given the weighting in the index on oil names.

The agri sector, especially those driven by pork prices – well it seems done for now, I wouldn’t be surprised to see chicken names be the next story.

For the banks…worst performing sector/industry. Could the next 1-3 months be time to accumulate….the worst will be past….valuations are “cheap” and part of me still thinks that the inflation story will pick up more next year => interest rates increasing => NIMs improving. But Thailand does have a secular issue with the aging population => retail loan growth i.e. mortgages are gone.

  1. peter satrapa-binder

    are you sure that the worst for the banks is past already? for example i’d expect NPL to rise in 2H20 as many tourism business-related operators who have held out until now might be able to close or suspend their businesses if there won’t be end-of-the-year business…

    • Yes and I’d say it’s probably quite well-priced in atm.
      Without a doubt their numbers will look $hit for 2020. But if the expectation is that 2H2021 vs 2Y2020 will look better, then at what level would banks be priced?

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