• Overseas stock markets gain as post-Brexit bounce continues: Global stock markets regained a semblance of calm following last week’s Brexit shock as concerns that other eurozone countries might follow in the footsteps of the UK to seek a vote for an EU exit dissipated after EU leaders made it clear to Britain that it would not enjoy the benefits of EU membership - like access to Europe’s single market. WTI crude oil prices also gained after a larger-thanexpected drawdown in US crude inventories reflected a supply deficit in the market, a factor that would be positive for Thai energy shares, which would in turn give the broader market a boost.
• SETI appears headed for a retest of previous highs: Even though the SET index could be headed for a retest of previous highs, volatility however looks set to rise with growing scope of profit-taking along the way as the market still lacks support from foreign investors and current valuation is also no longer cheap at 15.5x forward P/E.
• 2Q earnings season is approaching: Banks are the first sector to hand in their second-quarter earnings scorecards but overall earnings seem to have been under pressure from new electronic transaction service ‘Prompt Pay’ while the rally in bank shares on Wed appeared to be the result of end-of-quarter window dressing as reflected by three consecutive days of net institutional buying. As things stand, we believe the market will shift its focus back to fundamentals again after the end of window dressing next week. The trading range for the SET index is seen at 1440-1460 points today.
• Investment strategy: To play current market conditions, we advise investors to follow the strategy of ‘buying the dips and selling the rips’ in selective stocks.
(1) Tourism recovery play: Hold onto AOT.
(2) Defensive play: Take proift on VIBHA.
(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
