• Fund flows likely to slow down: In our view, we see scope for a slowdown in fund flows as investors may be looking for clues on whether the US Fed is likely to make a rate move in Sep as it is expected to stand pat on policy at this month’s meeting. In Asia, hopes of more stimulus measures from BOJ which is due to meet later this week are fading after BOJ Governor Harukiko Kuroda ruled out the idea of using ‘helicopter money’ to combat deflation in addition to existing QE and NIRP in a media interview last week. However, any move by BOJ to expand its QE and NIRP may help keep the momentum of fund flows and Thai stocks going.
• Energy sector next on deck to release results after banks: Overall bank results slightly beat market forecasts by around 4%, which boosted consensus market EPS forecasts for FY16 by about 1% though big banks like BBL and KBANK reported earnings misses. Following the winding down of bank earnings season, energy companies will be next in line to hand in their quarterly earnings prints which are expected to be strong. Any positive earnings surprises may further buoy sentiment in the near term.
• Selective earnings play in focus: Despite the prospect of a slowdown in fund flows, we believe no fund outflows may be in sight for the meantime as earnings and dividend season shifts into higher gear. The trading range for the SET index is seen at 1495-1515 points today. The topside target for the current leg up is seen at 1530 points based on FY16 consensus market EPS forecasts of Bt90/share before the end of 2QFY16 earnings season.
• Investment strategy: Selective S/T play looks best for the meantime.
(1) Tourism recovery play: Hold onto AOT.
(2) Selective play: Hold onto MAJOR and CMR.
(3) Upside momentum play: Hold onto ERW, BCH and SCN.
Source: poems.in.th / settrade.com
