Transport, industrial stocks may gain if Trump wins US election

Transport and industrial estate stocks are poised for gains if Donald Trump secures victory in the US presidential election, according to Asia Plus Securities (ASPS). Conversely, manufacturers of petrochemicals, electrical equipment, steel products, and auto parts may face stiffer competition from Chinese exports.

With the US presidential election just weeks away, the race between Democrat Kamala Harris and Republican Trump remains tight. ASPS noted in a research report that Trump appears to be leading in some polls, indicating a potential win for the former president.

“Protectionism against China is one of Trump’s flagship policies.”

They highlighted that a Bank of Thailand study found an increase in US exports during Trump’s previous term from 2017 to 2020, as higher tariffs on Chinese products boosted demand for machinery, communication equipment, and computers from other countries, including Thailand. ASPS revealed that Thailand’s exports may be faced with fierce competition.

“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.”

Shipping firms like Regional Container Lines (RCL), Precious Shipping (PSL), and Thoresen Thai Agencies (TTA) are expected to benefit from a Trump win, as shipping orders are likely to surge ahead of any potential tariff hikes.

Industrial estates to gain

Additionally, ASPS predicts that more international companies will establish factories outside China to circumvent tax barriers. This shift is anticipated to benefit industrial estate operators such as Amata Corporation (AMATA) and WHA Corporation (WHA).

Maybank Securities (Thailand) also weighed in on the potential implications of the US election, projecting a positive sentiment for the Thai government to stimulate the economy by creating a favourable investment climate for foreign manufacturers.

“The US election is a positive factor boosting the SET, regardless of the outcome. However, the Thai stock market would respond more positively if Harris wins, as the party’s trade and foreign policy are not as aggressive as Trump’s.”

Maybank forecasts that the Stock Exchange of Thailand (SET) index could accelerate towards the end of the year, potentially closing at 1,520 points.

The brokerage stressed that the key driver for the Thai stock market during a US election year is the prevailing investment trend.

“For this year, the key trend is the downward interest rate cycle and the recovery of the domestic economy.”

Based on these themes, Maybank highlighted stocks in the tourism, banking, construction materials, power plants, and industrial estate sectors as particularly interesting. They recommend three stocks: Asset World Corp (AWC), Global Power Synergy (GPSC), and WHA, as reported by Bangkok Post.

The outcome of the US presidential election could have significant ramifications for various sectors in Thailand, with transport and industrial estate stocks potentially emerging as winners, while certain manufacturers may face increased competition from Chinese exports.