• US stocks closed higher on Tue after Federal Reserve Chair Janet Yellen called for caution on raising interest rates, a music to Wall Street’s ears as she remained concerned about the impact of the global slowdown on the US economy in her highly anticipated speech at the Economic Club of New York in line with the Federal Reserve’s latest policy statement. For this reason, key global economic data due out later this week will remain in focus. Of particular interest will be China’s manufacturing numbers.
• Bullish overseas sentiment should pave the way for Thai stocks to build on their gains today but we however view any rallies towards resistance levels as a profit-taking opportunity on expectations that the market will remain gripped by volatility and the room for upside looks limited after a steady streak of heavy net institutional selloffs despite return of foreign buying. Trading turnover remained on the decline to a mere Bt35bn on Tue, reflecting the market was largely dominated by short-term speculative trading activity. In this sense, it seems to us that Thai stocks may not move anywhere far from here. The trading range for the SET index is expected to be between 1385-1405 points today.
• For short-term strategy, selective and government policy plays seem to be good trading bets. Equity holdings should be capped at 60% of the portfolio with the following key investment themes to play today:
(1) Tourism recovery play: Hold onto AOT and add more positions in MINT to the portfolio on optimism over a summer tourist season and the government’s short-term stimulus measures for Songkran festival.
(2) Selective play: Hold onto CPALL.
(3) Government policy play: Take profit on LPN at short-term target to lock in a gain of 5.2%.
Source: poems.in.th / settrade.com
