• Sell on fact type of outcome: Thai stocks took a heavy beating on Thu hit by a sell-onfact type of outcome after the end of the Fed’s policy meeting and concerns over ‘Prompt Pay’ that could cut into banks’ profits.
• More pressure from oil after 3.8% slide: Crude oil prices tumbled on Thu on rising supply following the restart of oil production in Canada after a wildfire and negotiations between the Nigerian government and rebels. In our view, falling oil prices would put pressure back on energy shares today.
• Key players set to stay sidelined: Looking ahead into next week, volatility will likely remain the order of the day until the Brexit referendum. In our view, insitutional and foreign investors may be reluctant to take positions ahead of the Brexit vote as reflected by their trades over the last five trading days as there were no inflows from both institutional and foreign investors and combined net institutional selling also exceeded Bt10bn.
• Possible test of 1400-point support: Investors should watch out for risk aversion selling ahead of the Brexit vote while there remains scope for the SET index to test the initial psychological support of 1400 points given that (i) the recent market rally was largely driven by S/T speculative trading, (ii) Thai stocks are now no longer cheap at 15.17x forward P/E and (iii) there remain unpredictable factors lying ahead. The trading range for the SET index is seen at 1390, 1400-1420 points today.
• Short-term investment strategy: Any rallies are seen as an opportunity to take profits and any correction should be used as a buying opportunity.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Selective play: Hold onto long positions in TK and short positions in THAI after we took on more short bets on THAI on Thu afternoon. Today we will add long positions in PTTGC to our short-term portfolio as an upside momentum play after Bloomberg consensus target price upgrades.
Source: poems.in.th / settrade.com
