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Limited upside room for SET in December this year, experts say

Nov 30. 2020
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By The Nation

Brokerage firms expect the Stock Exchange of Thailand (SET) to move in a narrow range in December this year.

Yuanta Securities (Thailand) strategist Natapon Khamthakrue expected the SET to move between 1,390 and 1,450 points amid hopes of foreign funds inflows, recovery in SET-listed companies' performance, progress in developing a Covid-19 vaccine, rising oil price and the government's economic stimulus measures.

He advised investors to buy stocks in laggard groups that pay high dividends, such as KKP and BBL, stocks that benefit from the Covid-19 vaccine development such as SHR and III, and stocks that will benefit from the government's move to promote electric vehicles next year, such as CWT and NYT.

"The SET would face volatility after skyrocketing from positive news of a Covid-19 vaccine, so investors can buy stocks when the index falls to 1,370 points," he said.

"If the political situation doesn't escalate, we expect foreign funds to flow into the SET, as the index is still underperforming compared to other Asian indices."

Trinity Securities research analyst Nuttachart Mekmasin expected the SET to move between 1,350 and 1,460 points amid mass buy-ups in value stocks.

He added that there was limited upside room for the SET due to high valuation, while foreign investors would sell risk assets to hold bonds at the end of this year.

"Investors should follow international factors, such as central banks' meetings on December 15-16, as the stock market expects an additional quantitative easing programme, and the Opec+ move to not extend the cut in oil production would impact Thai stocks," he said. He added that domestic political turmoil would pressure the index periodically.

For short-term investors, he advised speculating profits from value stocks, such as PTTGC, PTTEP and IVL, while warning that they should stop loss when the stock market faces a correction.

"For long-term investors, we advise monitoring the situation because the index may fall below 1,400 points and that would be an opportunity to buy stocks in the laggard group and those that benefit from the Covid-19 outbreak, such as STGT, KCE and XO," he said.

Senior Tisco Securities strategist Apichat Poobunjirdkul expected the SET to fluctuate between 1,390 and 1,455 in December this year, as foreign investors would slow down their investment during the long holiday.

"Meanwhile, we have to follow the central banks' meeting on whether they will maintain their monetary policies or not, and news of a Covid-19 vaccine on whether it would be approved by the middle of next month or not," he said, adding that he didn't expect the domestic political situation to cause an impact on the index.

He advised investors to make selective buys of stocks in laggard groups that pay 3-4 per cent dividend annually, as well as energy stocks such as KKP, EGCO and RATCH.

"However, the index would face correction due to the tight share prices until next year, so buying stocks when the index falls below 1,400 points would be a good option as well," he added.

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