• US stocks up modestly: Wall Street shares closed modestly higher on Thu after ECB left its main refinancing rate unchanged at 0% and deposit rate at -0.4% and maintained the pace of its QE purchases at 80bn euros/month in line with expectations that no additional stimulus would be announced at this policy meeting.
• No deal reached to set output ceiling: OPEC failed to agree a clear oiloutput strategy on Thu as Iran insisted on steeply raising its own production. Crude oil prices fell by more than 2% after OPEC’s meeting but later bounced back after data showing a drawdown in US crude stockpiles reflected a further decline in excess supply. Overall WTI crude oil prices held steady at around US$49/barrel after a strong rally of up to 90% over the last four months but a lack of catalysts to drive prices further higher may be negative for shares of energy companies in the intermediate term.
• Watch out for a sell-on-fact: Thai stocks remained wedged in a tight band nearly throughout the week while overall corporate profits held steady. Currently the SET index is trading at around 15.5x forward P/E. Our call remains that risks are tilted to the downside rather than the upside after a lack of fresh incentives but we believe the SET index may likely remain stuck in the same sideways trading range of 1415-1430 points today.
• Short-term strategy: To play a sideways market, selective trading looks appropriate with any big market dips seen as good buying opportunities.
(1) Tourism recovery play: We added more long positions on AOT shares to the portfolio Thu afternoon after the stock prices pulled back near 75-day EMA line while bright tourism outlook remained intact.
(2) Selective play: CHG shares are still worth holding in the portfolio.
Source: poems.in.th / settrade.com
