• BOJ’s policy decision in focus today: The BOJ will make its policy decision today. Any positive surprise on the policy front could be the catalyst to spur more short-term fund inflows and may in turn fuel speculation over additional monetary easing measures from BOE and ECB at their Sep policy meetings.
• Bank rally driven by fund flows: Bank shares rallied sharply on Thu due partly to the rotation from energy sector which came under pressure from falling oil prices in the near term and the speculation over BOJ’s policy decision due out today. Net foreign buying of Thai shares topped Bt4bn on Thu, taking YTD net foreign inflows to around Bt80bn. By our estimate, we expect around Bt90bn inflow of foreign funds will flow into Thai stocks this year. That means there remains room for around Bt10bn inflow of foreign funds to flow in, which would likely boost the SET index by another 10 points. Note that BOJ’s policy decision today has not yet been factored into the above fund flow forecast.
• SETI inching closer towards short-term topside target of 1530 points, investor sentiment back to ‘greed’ mode: In the current leg up, the topside target for the SET index is seen at 1530 points. As PSR’s Fear & Greed Index, a gauge of investor sentiment has now swung back to ‘greed’ mode, there is no compelling reasons to buy shares at current high prices, except for letting the profits run. The trading range for the SET index is seen at 1512-1530 points today.
• Investment strategy: Selective short-term play looks best for the meantime.
(1) Tourism recovery play: Hold onto AOT.
(2) Selective play: Hold onto CMR and CPF.
(3) Upside momentum play: Hold onto ERW and SCN.
Source: poems.in.th / settrade.com
