• External factors largely unchanged: US equities traded in range on Thu while WTI crude oil prices settled 1% higher at US$46.7/barrel overnight but pulled back slightly in today’s early trading. Today US retail sales data will be in the spotlight after disappointing earnings results from retail-heavy consumer staples sector fanned fears about consumption recovery.
• Upside seen limited: In the absence of fresh positive catalysts, the room for further upside may be quite limited in Thai stocks from now on after the SETI on Thu bounced back from 1380-point support level towards a key psychological level of 1400 points. The trading range is expected to be between 1385-1410 points today. First-quarter earnings season, which will wind down next Mon, would remain a shortterm catalyst for the market but after the end of the earnings season, the market’s attention may likely shift back towards macro data again.
• MSCI’s semi-annual review results: ROBINS and EGCO will be added to MSCI Global Standard Indexes but no Thai securities will be deleted from the indexes. For MSCI Global Small Cap Indexes, there will be three additions: DNA, GL and S to and six deletions: EFORL, SAMTEL, SAT, SRICHA, TIPCO and TTCL from the indexes. All changes will be implemented as of the close of May 31, 2016.
• Short-term strategy: It seems to us that selective trading strategy looks appropriate in current market conditions. Equity exposure should also be capped at 40%-60% of the portfolio.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Earnings play: Hold onto LH and AAV shares after strong 1QFY16 results.
(3) Selective play: Hold onto MAJOR shares.
Source: poems.in.th / settrade.com
