Analyst Expects Further Plummet for SET as Concerns over Domestic Covid Outbreak Remains

Stocks in Asia traded in a mix session on Thursday morning after the Federal Reserve stated that it would keep the accommodative policy in place and would only be changed once outcomes are achieved.

 

As of 9:16 local time in Thailand on Thursday, April 8, 2021, Nikkei fell 0.40%, SSEC dropped 0.25%, HSI rose 0.32%, ASX 200 jumped 1.04% and Kospi increased 0.05%.

Overnight, S&P 500 rose 0.15% to close at 4,079.95 points, a record high. Dow Jones inched 0.05% higher, while Nasdaq dipped 0.07%.

Yesterday, SET Index closed at 1,556.56 points, decreased 23.10 points or 1.46% with a trading value of 107 billion baht.

 

On Wednesday, the Federal Reserve released minutes from its March meeting, stating that it would take some time before the Fed starts tapering its asset purchases after asset purchases since last March had materially eased financial conditions and were providing substantial support to the economy.

 

Asia Wealth Securities (AWS) expected the SET Index today to move in the range of 1,540-1,575 points with a chance to go down to test the support level at 1,540 points. SET dropped more than 40 points this week (-2.5%) even though the Prime Minister did not announce a lockdown, but not wrong from expected.

While concerns over the epidemic situation exist, including concerns about the long holiday next week and delayed vaccination operations will raise concerns and slow down the overall economic recovery. There are negative factors in the next phase. This was reflected by the selling pressure of foreign investors yesterday. (Foreign investors net buy of Bt2.7bn, including big lot transactions, TPIPL shares of Bt2.9bn). AWS advised on continuing to focus on cash holdings of more than 50%, with the new buy-round support at 1,540 points.

Investment is still focused on speculative stocks with a unique positive factor, positive of the IMF on Global GDP, stocks in the electricity group which is less volatile than the market, stocks that benefit from the return of the COVID-19 are STGT and COM7, while AWS recommended avoiding tourism-related stocks.

 

Core Investment

1) Stocks which obtained the benefit from Thai Baht depreciation (Trading within 3-6 months) – HANA, KCE, TU, ASIAN, GFPT, CPF, STA, STGT, SAT, EPG, SMPC and MEGA

2) Stocks which obtained benefit from EV CAR Thailand 2035 (Trading within 1-2 months) – BPP, GPSC, BCPG and EA

3) Dividend Play (Middle-term trading 6-12 months) – SC, LH, QH, KKP, TISCO, RATCH, DIF, INTUCH, EASTW and TTW

4) Long term accumulative stocks (DCA) (Long-term trading over 1 year) – AOT, BEM, ADVANC, WHA, LH, CPALL, CPF, BDMS, HMPRO, BBL and KTB