US stocks finished higher on Wed as a rebound in oil prices added to optimism sparked by a raft of earnings reports. In our view, rising oil prices should give Thai energy shares a lift today but the room for upside in Thai stocks however look limited in the near term due to a lack of strong buying interest from key investor groups while foreign funds flew out of other countries in the TIP market. To drive the market further higher, upside earnings surprises especially from the banking sector may be needed. The short-term trading range for the SET index is expected to be between 1400-1425 points.
Crude oil prices rebounded after a smaller-than-expected build in US crude inventories according to the US EIA report and the possibility of another output freeze meeting of large oil producers in Russia in May.
Institutions switched to net sellers of Thai shares after a strong market rally while no signs of strong foreign buying in Thai stocks were yet in sight. Elsewhere in Asia, foreign funds flew out of Indonesia and the Philippines but some flew into India and Taiwan.
In the near term, the chances of consensus earnings upgrades are very slim after earnings released so far by big banks looked unexciting. Bank sector profits contributed the biggest share of the market’s profits.
In our view, selective plays may outshine the broad market in the near term. Equity holdings should also be maintained at 40%-60% of the portfolio.
(1) Tourism recovery play: Hold onto AOT, CPALL and SPA shares.
(2) Selective play: Hold onto WHA and MAJOR shares.
(1) Tourism recovery play: Hold onto AOT, CPALL and SPA shares.
(2) Selective play: Hold onto WHA and MAJOR shares.
Source: poems.in.th / settrade.com
