Oil slides: WTI oil prices settled almost 5% lower from the session’s high on Mon after failure to hold above US$45/barrel. Limited gains followed by heavy selloff reflected weakening short-term drivers of the recent oil price rally. Oil rallied by as much as 70% from its bottom of US$26.05/barrel in mid-Feb 2016 while Canadian wildfires gave only a short-lived boost to oil prices on Mon. For this reason, watch out for a possible bout of volatility and selling in energy counters today.
Net foreign selling for first time after long holiday: Foreign investors switched to net sellers of Thai shares for the first time on Mon after the long weekend holiday.
More earnings on tap: Telecom counters may face selling pressure after ADVANC reported grim quarterly results in line with market expectations on Mon. Other bellwethers due to release results later this week include PTTGC and THCOM, both of which are expected to report y-y earnings drop.
Watch out for possible selloff: In our view, the risk seems to be skewed to the downside rather than the upside for Thai stocks as a lack of strong positive catalysts and a possible selling pressure from big-cap ENERG and ICT counters may keep the SET index volatile near a key psychological level of 1400 points but it is unlikely to break through this barrier. The trading range for the SET index is expected to be between 1380-1400 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 and CPALL shares.
(2) Earnings play: Hold onto LH and AAV shares on expectations of strong 1QFY16 results.
(3) Selective play: Hold onto MAJOR shares.
(1) Tourism recovery play: Hold onto AOT and CPALL shares.
(2) Earnings play: Hold onto LH and AAV shares on expectations of strong 1QFY16 results.
(3) Selective play: Hold onto MAJOR shares.
Source: poems.in.th / settrade.com
