Market View: April 9-12

Therdsak Thaveeteeratham
Executive Vice President / Research
Asia Plus Securities

The SET Index is expected to fluctuate in a range of 1,630-1,660 points. 
The investment mechanism currently consists of several elements for capital to move into the Thai bourse, ranging from the end of the interest rate’s upward trend and a possible rate cut in some countries, a higher Thai 10-year bond yield than the US 10-year bond yield, a market earnings gap which indicates a 4.3 per cent higher return in the stock market than the bond market, and a historical low foreign holding of Thai stocks at 22.6 per cent.
Yet capital has not flown back into the stock market likely due to concerns over Thailand’s political situation after the election and worries over the next government’s stability.
This week, key external factors are centred on optimism for the US-China trade war and concerns over Brexit. Britain is due to leave the European Union on April 12.
Risks may heighten in the event of a no-deal Brexit.
Also this week, the SET Index will likely fluctuate in the range of 1,630-1,660 points. We prefer stocks with low downside risks and a sufficiently high dividend yield such as PTTGC which has been pressured by an over Bt12-billion short sell (from early 2019 to now). PTTGC’s dividend yield is close to 6 per cent with a 15 per cent upside from the fair value. We also like EASTW with its stable price move, expected higher water sales in the summer, long-term gain from the EEC and a dividend yield of higher than 4 per cent, as well as DCC with sales recovery of tiles, distribution channels for rental income and a dividend yield of 5 per cent. 

Passakorn Linmaneechote
Deputy Managing Director – Research
Kasikorn Securities

The SET Index will likely swing up.
A negotiation report on the Washington trade dispute is expected to drive the stock market this week. If there’s progress without details, we could see a sell on fact. But if the negotiation progress is filed with details, the stock market is expected to continue its rise. Domestically, we expect the stock market to weigh on the political issue after announcing the formal election results on May 9. 
The SET Index this week is expected to swing up from positive trade negotiations with likely thin turnover for the long holidays. Meanwhile, we see external risks from strong US economic figures which could pressure the FOMC to raise the rate and, as a result, lead to a possible capital flee from emerging stock markets including the Thai bourse. 

Saravut Tachochavalit
Senior Vice President, Research Department
RHB Securities (Thailand)

This week, new factors that could affect the global and Thai stock markets include the ECB meeting, Brexit, the March OPEC production report, the Fed’s sudden policy shift for no rate rise this year and the cease of QT this September, China’s inflation and exports, and the IMF report that is expected to announce a downward revision of its estimates for economic growth particularly in the eurozone. 
We expect the SET Index to swing in a range of 1,630-1,667 points, given the period of 1Q19 earnings results announcement for commercial banks. Commercial banks in our coverage are forecast to see a 12- per-cent drop YoY but a 13-per-cent rise QoQ in 1Q19 net profit. We pick KBANK with a target price of Bt222 and BBL with a target price of Bt241.