• Global equity sell-off continues on Brexit fears: Global equity markets continued last Fri’s sell-off on Mon after many polls gave a lead to the ‘leave’ camp in the upcoming Brexit vote on Jun 23. In our view, Thai stocks would continue to dance to the rhythm of external factors for a while. Even though the Brexit appears to have no significant direct impact on the Thai economy, it may bring volatility to the market in the near term as it has raised the collective level of anxiety among stock investors. The EC and ECB will meet today to discuss the economic impact from the Brexit vote.
• WTI crude extends losses: The recent oil rally pushed US drilling rig count higher and in turn exerted pressure on crude oil prices for the time being. We believe oil prices are unlikely to move further higher from current levels. The oil price slide would also be negative for shares of energy companies, a factor that may possibly put Thai stocks into correction mode after the recent market rally was mainly led by the energy sector.
• Correction on the cards amid external uncertainties: Uncertainties over the outcome of the US Fed’s policy meeting, Brexit vote and oil prices would add more volatility to Thai stocks this time around. The trading range for the SET index is seen at 1400, 1412-1430 points today.
• Short-term investment strategy: Any big dips should be taken as buying opportunities.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Selective play: Hold onto TK shares and short positions on THAI shares after taking profits on CHG shares following a strong run.
Source: poems.in.th / settrade.com
