Thai Bev: Bank of Thailand (BOT) had maintained its policy rate at 1.5% for the second successive month, after having made two rate cuts in Mar and Apr this year. While Thailand saw a slowdown in its economy during the first four months, BOT expects a gradual improvement to growth over 2015, driven by increased disbursement of public investment as well as tourism. They have also deemed the risk of deflation to be low at the moment.
Recently, speculation about an imminent coup arose, but OCBC previously commented that Thai Bev's spirits business have shown to be broadly resilient despite the political uncertainties in Thailand. The outlook for alcoholic segments also remains positive, thus house continues to believe that the spirits and beer segments will help drive Thai Bev’s topline and bottomline performance.
As there is still sufficient upside at current price levels, OCBC maintains its BUY rating with TP of $0.83.
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