• Energy shares may come under pressure today amid a renewed rout in global oil prices after a meeting of major oil producers that gathered in the Qatari capital of Doha failed to produce an agreement to put a lid on oil output. Despite upbeat Chinese economic data, the prospect of weak earnings season for Thai banks could keep the upside that Thai stocks could play catch-up with overseas market gains following the long Songkran holidays in check. The trading range for the SET index is expected to be between 1370-1400 points today.
• Overall Chinese economic data released during the Thai stock market’s close for Songkran came in better than market expectations. Chinese trade data beat forecasts while 1Q GDP numbers were in line with expectations.
• The meeting of major oil exporting nations including non-OPEC Russia fell apart on Sun without an output freeze deal after Iran did not join in. A lack of a freeze deal would be negative for crude oil prices and energy shares.
• In Thailand, the first-quarter earnings season for Thai banks is slated to kick off this week. Any earnings miss could result in another round of analyst earnings downgrades which may put a further cap on the market’s upside.
• In the near term, we advise investors to follow the strategy of buying the dips and selling the rallies within the above trading range. The focus should be largely on shares of companies that stand to benefit from the government’s policies i.e. tax cheer for Songkran and mega-investment projects. Equity holdings should be maintained at 40%-60% of the portfolio.
(1) Tourism recovery play: Let profits run on long positions in AOT, CPALL and SPA as the overall outlook for tourism remains favorable.
(2) Momentum trade: Hold onto CK after booking profits in JAS at short-term target.
Source: poems.in.th / settrade.com
