• The US Federal Reserve’s policy decision on interest rates will be in the market’s spotlight today. Even though no rate hike is expected from the US central bank at this policy meeting, its tightening clues for the rest of the year however seem to have garnered much of the market’s attention. We see the odds of at least another rate hike from the Federal Reserve this year. The policy decision from the Bank of England (BOE) will be next in line tomorrow.
• In Thailand, foreign investors turned heavy net sellers of Thai shares for the first time on Tue after the emergence of an overbought signal. Thai stocks are now no longer cheap after the SET Index’s FY16 forward P/E is near 15x, in our view. However, there is scope for institutional investors to renew their buying activity in Thai stocks if the main index pulls back towards 1340-1365 points. In this context, we expect more sideways trading in Thai stocks today with trading range expected to be between 1365-1395 points.
• Short-term strategy:
To beat a sideways market, the ‘sell the rallies, buy the dips’ strategy seems to be working well. We advise investors to sell into strength around 1400+/- points. and buy back on weakness at 1365+/- points. Equity exposure should be capped at 80% of the portfolio with the following key investing themes in play today:
(1) Tourism recovery play: Hold onto AOT shares.
(2) 4Q earnings play:Hold onto short sell positions in TTA.
(3) Selective play: Hold onto ADVANC shares.
(1) Tourism recovery play: Hold onto AOT shares.
(2) 4Q earnings play:Hold onto short sell positions in TTA.
(3) Selective play: Hold onto ADVANC shares.
Source: poems.in.th / settrade.com
