Brokerages recommend stocks in the tourism and healthcare sectors, which are expected to benefit the most from the new government's short-term economic stimulus, as policies to lift the tourism sector can be implemented immediately without waiting for the fiscal 2024 budget.
Analysts expect the first cabinet meeting on Sept 12 to introduce measures to drive economic growth in the short term. Among the measures could be a visa-free policy for Chinese tourists, lowering electricity tariffs and petrol prices, and suspending agricultural debts.
Suchot Thirawannarat, research director of KGI Securities (Thailand), said policies to expand tourism can be introduced immediately because they do not require a large amount of money. Policies that require a larger budget are expected to be gradually introduced early next year.
"Chinese tourist arrivals have fallen short of forecasts and eliminating the visa requirement is likely to boost their numbers significantly," Mr Suchot said.
The brokerage projects stocks in the tourism and airline industries to outperform the stock market overall. It recommends investors opt for Airports of Thailand (AOT) and Bangkok Aviation Fuel Services.
Asia Plus Securities (ASPS) shares this view, noting the coalition government's planned cash handout may not begin until the second quarter of 2024.
"The government is expected to push forward economic stimulus measures for the rest of 2023. These measures will have a positive sentiment for the Stock Exchange of Thailand [SET] index, leading to a rally and testing the 1,570-point resistance range," the brokerage said in a research note. "Free visas for Chinese tourists could take effect on Oct 1, which is the start of Golden Week in China, as arrivals from the mainland are less than 50% of pre-Covid levels."
This should have positive sentiment on tourism plays including Minor International, Central Plaza Hotel and Erawan Group, while transport picks include Asia Aviation, Bangkok Expressway and Metro, and AOT, said ASPS.
Lowering fuel and other energy prices should create positive sentiment for many firms, benefiting commerce stocks such as Berli Jucker, CP All, CP Extra, Central Retail Corporation, Ngern Tid Lor (TIDLOR), and Muangthai Capital (MTC), said the brokerage. The debt moratorium for farmers has improved sentiment on leasing plays such as TIDLOR and MTC.
"As the SET index fell, we recommend accumulating stocks with solid fundamentals and good growth potential for the rest of 2023: SCG Packaging, PTT Exploration and Production, PTT Global Chemical, Charoen Pokphand Food, Advanced Info Service, and True Corporation," said ASPS.
The brokerage CGS CIMB (Thailand) said a reduced electricity tariff may affect small power producers, so it underweighted stocks in this group, including Global Power Synergy.