Friday, July 19, 2019

Limited upside for Index 

Jun 16. 2019
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By The Nation

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The SET index has risen about 50 points since early June, thanks to a combination of positive factors: Re-balancing of the MSCI for more weight in Thai stocks, formation of the new government and expectation of a cut in Fed rates. 

However, the Thai bourse is believed to have absorbed the positives, and the local political situation may now be a hindrance to the continuous rise of the SET index – which could lead to an exit of foreign capital from the market. 

We have cut our forecast for Thai listed companies’ EPS this year by 2.25 per cent to Bt103.32, reflecting drops in commodities including crude oil. This year’s targeted SET Index is cut to 1,699 points, indicating its limited upside. The SET Index at 1,680 points could be a strong resistance this week.

This week, we will follow up on the developments of the USChina trade war, especially the June 17 US public hearing on another round of US tariff increases on US$300 billion of Chinese imports and the FOMC’s June 1819 meeting. 

In Thailand, the new government is still under watch. We pick stocks with sound fundamentals and issues to drive prices such as RS, SCCC and BBL, as well as industrial estate firms led by AMATA and FPT.   Therdsak Thaveeteeratham, executive vice president/research, Asia Plus Securities 

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