Global stock markets climb after Brexit rout: Crude oil prices rebounded on Tue on bargain hunting after a sharp two-day slide in Brexit aftermath. Rising oil prices would give energy shares a lift today but ECB’s action on post-Brexit measures still needs to be closely watched going forward.
Sentiment improves but caution still warranted:Thai stocks rebounded nicely over the last two trading sessions as the Brexit impact on the Thai stock market seemed only short-lived based on Tue’s closing level. PSR’s F-G Index also moved up to neutral territory after earlier slipping below 0.
Upside seen limited: If we look at the pre-Brexit valuation of the Thai stock market, Thai stocks looked a bit stretched, trading at 15.4x forward P/E. To keep the market’s rally going strong, much would largely depend on consensus EPS upgrades but challenges still lie ahead as ‘prompt pay’ service may cut into EPS of the banking sector, the first to hand in quarterly earnings scorecards given that the second-quarter earnings season is approaching. Within hindsight, we are expecting a range-bound session for Thai stocks today with limited room for further upside. The trading range for the SET index is expected to be between 1420-1444 points today.
Investment strategy: Selective trading looks appropriate in current market conditions and it is best to avoid chasing stocks.
(1) Tourism recovery play: Hold onto AOT.
(2) Defensive play: Hold onto VIBHA but raise S/T TP to Bt3.20 after momentum gains traction. Note that we took profits on BCH shares at S/T TP on Tue.
(3) Selective play: Hold onto PTTGC and short positions on THAI.
(4) Upside momentum play: Hold onto TWPC, ERW.
(1) Tourism recovery play: Hold onto AOT.
(2) Defensive play: Hold onto VIBHA but raise S/T TP to Bt3.20 after momentum gains traction. Note that we took profits on BCH shares at S/T TP on Tue.
(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
