• US stocks down modestly in tight-range trading on Mon amid rate hike uncertainty: On the data front, a preliminary reading from the US Markit flash manufacturing PMI came in at 50.5 below market expectations of 51.0. For the Fedspeak, St. Louis Fed President James Bullard said Brexit vote will not impact on Fed decision-making while San Francisco Fed President John Williams said the view of two to three rate hikes this year outlined by the FOMC in its Mar Summary of Economic Projections is about right.
• Foreign fund flows dependent on Fed’s policy decision, institutions still on selling spree: Heightened fears of an imminent Fed rate hike put a damper on foreign fund flows into Asia. Notwithstanding that the pace of net foreign sell-offs in Thai shares of late dissipated, foreign selling spree in the bond market however continued unabated, the baht remained on the weak side and net short futures positions held by foreign investors swelled to more than 10,000 contracts over the latest two trading days. Institutional investors also remained on a selling spree in Thai stocks.
• Correction still looming: At current levels of 15x FY16 forward P/E, we believe the room for upside is limited in Thai stocks while a correction is still looming. The trading range for the SET index is expected to be between 1370-1390 points today.
• Short-term strategy: Any dips may provide buying opportunities. The 1360-1340 point level is seen as an attractive buy-in point.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Earnings play: Look for opportunities to exit positions on LH shares after firstquarter results announcement passed off.
(3) Selective play: Hold onto LOXLEY shares on upbeat profit outlook and consensus target price upgrades.
(2) Earnings play: Look for opportunities to exit positions on LH shares after firstquarter results announcement passed off.
(3) Selective play: Hold onto LOXLEY shares on upbeat profit outlook and consensus target price upgrades.
Source: poems.in.th / settrade.com
