• Oil dives further on renewed glut worries: WTI crude oil prices fell further to the US$42-US$43/barrel level on Tue. In our view, sliding oil prices may put a further damper on shares of Thai energy companies today.
• Investors await Fed meeting & BOJ policy decision: Much of the market’s spotlight will now turn to the BOJ’s policy meeting on Thu rather than the Fed’s Jul 26-27 policy meeting to see if it will expand the size of its QE scheme as the market widely expects. Even though no policy action is expected from the Fed at this meeting, it seems as if hopes of a more dovish tone on its monetary policy remain alive.
• Fund flows slow down further: The value of net purchases by foreign investors dwindled further but we believe a more dovish stance on monetary policy from the Fed and a larger than expected expansion of QE from BOJ or any other measures beyond market expectations should be the catalyst to trigger renewal of fund inflows going forward.
• Energy earnings season starts to kick in: Oil refiners are expected to report better operating results for 2QFY16 on the back of crude inventory gains. In this sense, it remains to be seen whether energy earnings could surprise to the upside to keep the momentum rolling after bank earnings slightly beat market forecasts.Resistance remains pegged at 1515 points and support at 1495 points today while the topside target for the current leg up is seen at 1530 points.
• 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 book profits in MAJOR at short-term target price.
(3) Upside momentum play: Hold onto ERW, BCH and SCN.
Source: poems.in.th / settrade.com
