Wall Street extends post-Brexit rebound last Fri helped by upbeat US economic data: US stocks booked a fourth straight daily gain last Fri as a better-than-expected Jun US manufacturing data with both Markit PMI and ISM readings up from May and a rise in US employment index to 50.4 in Jun from 49.2 from May, which beat economists’ expectations for 49.0 helped stoke appetite for equities. Also in focus this week will be key US jobs data due out later in the week. Any positive surprises may however bring fears of a Federal Reserve rate hike back to the fore.
Net foreign buying of Thai shares exceptionally high last Thu due to CPALL’s big-lot transactions: Even though net foreign buying of Thai shares topped Bt6bn last Fri, much of the buying was due chiefly to CPALL’s big-lot transactions worth more than Bt5bn. Stripping out CPALL’s big-lot transactions, net foreign buying was only Bt1bn in line with regional fund flows after Brexit worries faded.
For short-term trading, any rises seen as profit-taking oppportunities: In our view, we see limited upside room for Thai stocks for the time being. Based on forward P/E ratio of 16x and FY16 EPS consensus of Bt91/share, the upside target for the SET index is seen at 1460 points only. To take the market further higher, much would largely hinge on strong positive earnings surprises in the upcoming 2Q earning season. Resistance for the SET index is seen at 1452, 1460 points and support at 1433 points today.
Investment strategy: A selective strategy remains the preferred choice. Any rallies should be used as profit-taking pportunities.
(1) Tourism recovery play: Hold onto AOT.
(2) Selective play: Hold onto PTTGC and short positions on THAI.
(3) Upside momentum play: Hold onto TWPC, ERW.
(1) Tourism recovery play: Hold onto AOT.
(2) Selective play: Hold onto PTTGC and short positions on THAI.
(3) Upside momentum play: Hold onto TWPC, ERW.
Source: poems.in.th / settrade.com
