FOREIGN INVESTORS EXPECTED TO STAY IN ASEAN MARKETS
Foreign investors continued to buy Asean stocks in the first two weeks of April with the exception of Malaysian equities.
Year-to-date, foreign investors have bought US$1.1 billion (Bt35 billion) net of Indonesian stocks, followed by $728 million of Philippine stocks and $161 million in Vietnam equities. On the other hand, they sold $244 million of Thai shares and $434 million of Malaysian stocks.
Meanwhile, in the Asean bond markets, foreign investors bought a hefty $4.6 billion of Indonesian bonds and $1.1 billion of Malaysian bonds year-to-date. In contrast, they sold $729 million of Thai bonds during the same period.
We believe Indonesia, Philippines, and Vietnam will continue to be the sweet spots for foreign investors due to their superior economic growth. Malaysian stocks could face further outflows in the near-term as its economy is growing at a decelerating pace with negative inflation during the last two months.
Thai stocks are expected to remain sluggish over the next 1-2 months as investors wait for a clearer picture in politics.
Thanawat Patchimkul
Head of Research
DBS Vickers Securities (Thailand)
HIGHER TURNOVER MAY
TAKE INDEX TO 1,800 PTS
The SET Index moved sideways with more active turnover. We expect a range of 1,600-1,800 points this week. Strategically, we prefer to buy on weakness and sell on strength in line with support and resistance.
Support factors
Monetary easing of central banks worldwide. Starting with the Fed reducing the QT this May, which could lead to global liquidity improvement.
Inclusion of NVDRs in MSCI EM, which could prompt at least Bt60 billion in foreign capital into Thai stocks towards the end of May.
High crude prices to support the energy group and the SET.
Key pressures
Consistent rise in Thai bourse’s PE in light of cuts in this year’s estimated EPS as a result of more provision for employee protection.
Unclear local political developments, which could lead to a new government with insufficient stability.
Higher risks to the Thai economy from Thai export contraction on the back of the US-China trade war and local political uncertainties.
We recommend big caps with high dividend, low valuations and laggard prices.
1) Refiners: TOP
2) Property: QH
3) Bank: BBL
Research Department
Trinity Securities
