Oil down slightly: WTI crude oil prices pulled back slightly after a steady gain of up to 18% from US$36.79/barrel on Apr 1. In our view, the room for further upside looks limited and investors should watch out for a possible bout of profit-taking in energy counters.
Market up on earnings speculation: Thai stocks made steady gains throughout last week on first-quarter earnings plays especially in the banking space. Overall bank earnings season came in weak in line with expectations. Note that bank sector profits contributed a significant proportion of total market earnings. Prior to the kick-off of the first-quarter earnings season, we estimated FY16 market EPS at Bt93.5/share. If we assume the market’s forward P/E ratio at 15x, the SET index should be around 1405 points. If bank earnings revision after first-quarter earnings season is factored in, FY16 market EPS forecast would be lower, thereby making the Thai stock market’s valuation no longer cheap.
Correction on cards in case of downside earnings surprises: In our view, there is a risk of a sharp correction triggered by a possible bout of profit-taking from proprietary traders if earnings from the remaining listed companies yet to release their quarterly results surprise on the downside.Cumulative purchases of Thai shares by proprietary traders, which
normally hold positions for a short period of time have been relatively high since the start of
the year at Bt15bn.
Short-term strategy: Selective trading strategy looks appropriate with equity holdings
maintained at 60% of the portfolio.
(1) Tourism recovery play: Hold onto AOT, CPALL and SPA shares.
(2) Selective play: Hold onto MAJOR on the release of the big-ticket Hollywood film Captain America 3 which is due to premiere on Apr 27 but raise short-term profit-taking target to Bt32.50 on the back of an increase in speculative momentum. For WHA, cut loss positions.
maintained at 60% of the portfolio.
(1) Tourism recovery play: Hold onto AOT, CPALL and SPA shares.
(2) Selective play: Hold onto MAJOR on the release of the big-ticket Hollywood film Captain America 3 which is due to premiere on Apr 27 but raise short-term profit-taking target to Bt32.50 on the back of an increase in speculative momentum. For WHA, cut loss positions.
Source: poems.in.th / settrade.com
