Positive signs from Chinese economic data: China’s official manufacturing PMI came in at 50.1 in Apr in line with analysts’ estimates and above the 50 mark that divides growth from contraction. In our view, speculation on more stimulus from China may dissipate after a recent series of upbeat economic reports.
Oil down sharply: Crude oil prices on the NYMEX tumbled 2.5% to settle at US$44.78/barrel on Mon after a Reuters survey showed OPEC’s oil output rose in Apr to close to the highest level in recent history.
Earnings still in spotlight: For the meantime, market attention will likely remain fixated on earnings, especially in the energy and ICT sectors as both represent a big share of the market’s total capitalization but earnings are expected to be grim.
Trading seen subdued, further upside difficult to achieve: Trading volume is expected to be light in a holiday-shortened trading week while the room for upside looks limited for Thai stocks as no signs of a return of both institutional and foreign fund inflows are yet in sight and energy counters may come under pressure today after a slide in global oil prices. The trading range for the SET index is expected to be between 1390-1415 points today.
Short-term strategy: Selective play will continue to do well in current market conditions. Equity exposure should also be kept at 60% of the portfolio.
(1) Tourism recovery play: Hold onto AOT, CPALL and SPA shares and take long positions on ERW at Bt4.30 on bullish tourism outlook and expectations of upbeat 1QFY16 earnings which are forecast to grow 17% y-y and 67% q-q.
(2) Selective play: Let profits run on MAJOR.
(1) Tourism recovery play: Hold onto AOT, CPALL and SPA shares and take long positions on ERW at Bt4.30 on bullish tourism outlook and expectations of upbeat 1QFY16 earnings which are forecast to grow 17% y-y and 67% q-q.
(2) Selective play: Let profits run on MAJOR.
Source: poems.in.th / settrade.com
