• Global equity rout continues on Brexit uncertainty:European stocks notched their fifth consecutive session of losses on Tue amid fears of economic consequences from Brexit. From our viewpoint, the impact of Britain’s exit from the European Union on the Thai econmy appears limited but its effects on the financial markets may be inevitable as risk sentiment would take a hit. We believe wild swings in stocks will likely continue in the near term until the Brexit vote on Jun 23.
• Fed meeting outcome eyed, no rate hike expected:The US FOMC’s two-day policy meeting will end today. Even though we think the Fed may not be in a hurry to raise interest rates at this meeting, Fed Chair Janet Yellen’s comments would be parsed for clues on the health of the US economy and the trajectory of future hikes as the market has already discounted that a Jun rate move is now off the table. However, there remains a risk to the downside if Yellen’s comments turn out to be a negative surprise and the market may face a sell-on-fact reaction.
• More volatility in store for Thai stocks amid external uncertainties: Thai stocks rallied sharply of late but gains lacked strong fundamental support. In addition, the market also remains vulnerable to unpredictable external risks lying ahead as any negative surprises may shock the market into a sharp correction. The trading range for the SET index is expected to be between 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.
Source: poems.in.th / settrade.com
