Negative factors to hinder SET recovery
The decline in the Thai stock market continued last week, dropping below the major resistance level of 1,600 points amid concerns of a global economic slowdown and the 13-per-cent fall in crude prices.
At the same time, bid results for the Bongkot and Erawan fields came worse than expected, pressuring energy stocks down.
The Monetary Policy Committee (MPC) raised the interest rate to 1.75 per cent on Thursday but revised down growth estimates of key economic sectors, including export and tourism.
The 0.9percent contraction in Thai exports last month will weigh on the bourse’s recovery. The MPC is not expected to again raise its policy rate next year. We now see the new resistance at 1,580 points and if the SET Index rises above 1,600, it will be testing 1,630.
Lower daily turnover is expected from the last week of this year to early next year.
Longterm and Retirement Mutual Funds will face less selling pressure and the SET could rise in the short term.
Our stock picks: CK, for its subsidiary being given a concession extension longer than expected; and CP Group for offering the highest bid price for the highspeed railway project. CK’s technical fair price is Bt27.
We hold BJC and BTS (positive from window dressing) and WHA (in SET50).