• Global shares down on Brexit bloodbath: Global stock markets got slaughtered by panic selling in Brexit aftershocks as future uncertainties stemming from surprise Brexit vote triggered a capital flight to safe haven assets. US dollar and Japanese yen regained strength and gold jumped sharply after Brexit bombshell.
• Risks still abound for Thai stocks: Even though Thailand seems to be unaffected directly by Brexit, it may however feel an indirect impact from a lack of buying support from foreign investors against the backdrop of subdued risk appetite and firmer US dollar while institutional investors have been on a selling binge before and after Brexit vote.
• More swings in store: In our view, more market volatility could be on the way as which direction Thai stocks will be heading from here largely depends on what will be going on in Europe but there still remains room for short-term trading opportunities in selective plays as long as the SET index could hold above 1395 points. Cut loss if the SET index breaks below this level. For long-term investment, any correction should be used as a buying opportunity with 14.6x forward P/E or ~ 1360 points – the level that normally triggers renewal of institutional buying – as a good entry point. Support for the SET index is seen at 1380, 1400 points and resistance at 1420 points today.
• Short-term investment strategy: Any correction should be taken as a buying opportunity.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Defensive play: BCH and VIBHA look to be good trading bets as shares of hospital operators are viewed as a safe haven during times of an extremely volatile market environment and weaker baht should also support medical tourism theme.
(3) Selective play: Hold onto PTTGC shares. More new short positions on THAI shares were added to the portfolio last Fri afternoon with any dips seen as profit-taking opportunities and we also added TWPC and ERW shares to the portfolio as upside momentum plays.
Source: poems.in.th / settrade.com
