• Global equity selloff continues in Brexit aftermath: Stock markets around the world remained battered by Brexit aftershocks amid concerns over economic uncertainty in Europe. Fed chief Janet Yellen and BOE governor Mark Carney also pulled out of a central bank summit on Mon to focus on soothing market jitters at home after Britain voted to leave the EU, a move that further added to investors’ anxiety.
• Possible window-dressing: Institutional investors held more than 20,000 net long positions in futures over the last two trading days and turned to net buyers of Thai shares for the first time on Mon. As things stand, we see scope for some quarterend window-dressing to come into play but it may not be heavy given that the overall Thai stock market performance has not been that bad compared to the previous quarter and the downside risks still abound amid global risk-off sentiment.
• Downside risk for Thai stocks intact: PSR’s F-G Index slipped back below 0, suggesting that the market retreated from bullish territory though the SET index managed to stage a rebound on Mon. In this sense, it seems to us that the room for further upside looks quite limited while the risks to the downside seem greater than those to the upside. However, there remains room for selective trading opportunities as long as the SET index can hold above 1395 points. Cut loss if the main index breaks below this support level. The trading range for the SET index is expected to be between 1400, 1412-1430 points today.
• Key investment themes:
(1) Tourism recovery play: Hold onto AOT.
(2) Defensive play: Hold onto BCH and VIBHA (S/T TP raised to Bt3.10).
(3) Selective play: Hold onto PTTGC and short positions on THAI.
(4) Upside momentum play: Hold onto TWPC, ERW.
Source: poems.in.th / settrade.com
