2021 outlook: A rebound year

Overview

We expect Thailand to enjoy a bounce-back year in 2021. Thailand has been Asia’s worstperforming market in 2020 and is cheap relative to peers. It has some of the highest leverage to a resolution of the pandemic via its high dependence on tourism and non-tech exports. Significant EPS cuts explain its poor performance this year, but we believe that the cuts in the most important market segments will end soon. Foreigners are heavily underweight, and foreign ownership is at the lowest point on our records. We expect a sustained period of political uncertainty but do not anticipate a major drag on the market.

Sectors

Among sectors, we Overweight both cyclicals and growth and Underweight defensives. Our overweights include banks, chemicals, tourism, retail trade, healthcare, and media. We Underweight telcos, contractors, land transport, and building materials.

Top picks

Our top picks are heavy in the cyclical and growth sectors we like. Picks include AOT, BBL,BDMS, CENTEL, CHG, CPALL, CRC, IVL, KBANK, SAWAD and SPRC.