Brokerages pick local stocks based on election

Transport and industrial estate stocks are expected to benefit if Donald Trump wins the US presidential election, while manufacturers of petrochemicals, electrical equipment, steel products and auto parts could see competition intensify from Chinese exports, says Asia Plus Securities (ASPS).
With less than a month before the US vote on Nov 5, Democrat Kamala Harris and Republican Mr Trump are in a neck-and-neck race.
There are signals that former president Mr Trump may win the election, as he leads Ms Harris in some polls, ASPS said in a research note.
“Protectionism against China is one of Mr Trump’s flagship policies,” the brokerage noted, adding a Bank of Thailand study found exports to the US increased during Mr Trump’s presidency from 2017-20, replacing Chinese products that faced higher tariffs, especially for machinery, communication equipment and computers.
“However, Thailand’s exports to other countries may be affected by fiercer competition with China, especially for export of goods subject to US protectionist policies, such as petrochemicals, electric appliances, steel products and auto parts,” according to ASPS.
Shipping companies, such as Regional Container Lines (RCL), Precious Shipping (PSL) and Thoresen Thai Agencies (TTA), will benefit from this move as shipping orders would spike before a tariff hike takes effect, noted the brokerage.
In addition, more international firms will open factories outside China to avoid tax barriers, benefiting industrial estate operators including Amata Corporation (AMATA) and WHA Corporation (WHA), ASPS added.
Maybank Securities (Thailand) expects the US election will create positive sentiment for the Thai government to drive the economy by providing a relaxed investment atmosphere to attract manufacturers from abroad.
Maybank estimates the Stock Exchange of Thailand (SET) index has a chance to accelerate towards the end of the year, finishing at 1,520 points by year-end.
“The US election is a positive factor boosting the SET, regardless of the outcome. However, the Thai stock market would respond more positively if Ms Harris wins, as the party’s trade and foreign policy are not as aggressive as Mr Trump,” noted Maybank.
According to the brokerage, statistics show the most important factor driving the Thai stock market during a US election year is the main investment trend in that year.
“For this year, the key trend is the downward interest rate cycle and the recovery of the domestic economy,” noted Maybank.
“Based on these themes, interesting stocks are companies in the tourism, banking, construction materials, power plants and industrial estate sectors.”
Maybank recommends three stocks, comprising Asset World Corp (AWC), Global Power Synergy (GPSC) and WHA.