SET Struggles for Direction as Investors Weigh on Re-Opening Theme and Fed’s Rate Hike

SET Index struggled for direction at the open in a volatile session as investors weighed on the negative sentiment of the U.S. rising inflation and Fed’s faster-than-expected rate hike, while Domestic Plays could support the market with the announcement from the Thai government of the fully opening Thailand within 120 days.

 

As of 10:20 local time in Thailand on June 17, 2021, SET Index fell 1.20 points or 0.07% to 1,623.59 points with a trading value of 13.6 billion baht.

 

Asia Wealth Securities (AWS) expected the SET today to move in a range of 1,615-1,635 points, giving a chance of a negative response to the Fed’s results although the Fed maintained interest rate and QE measures as expected. The dot-plot report shows the Fed will raise interest rates in 2023 faster than expected of 2024. The Fed will begin signaling at the Jackson Hole meeting in late August, cut QE starting 1Q22, and raise the policy rate in 4Q22 to a three-month faster than previously expected.

However, there are still positive sentiments on the Core Investment in the Re-opening (Domestic Play) segment after the Prime Minister plans to open the country within 120 days (14 Oct) is a limiting downside of the market.

The volatility of the SET will occur in the short-term. The investment strategy also weighs stocks in the Laggard and Re-opening (Domestic Play) groups to reduce market volatility.

 

Meanwhile, SET announced stocks in and out for the calculation of the SET50 and SET100 index, reweighted 30 Jun, effective 2H21 – SET50 incoming shares are IRPC, KCE, STA and STGT, and outgoing stocks are AWC, BAM, TOA and VGI.

SET100 shares incoming shares are AAV, ICHI, NRF, PSL, PTL, SINGER, STGT, SYNEX and TKN, and outgoing shares are AWC, BPP, EPG, GFPT, MBK, TOA, TPIPP, TTW and WHAUP with weight adjustment as of 30 Jun 2021.

 

Core Investment

1) Laggard Play (Trading within 1-2 months) – ADVANC, CPF, KBANK, BBL, MTC, EGCO, SPALI, LH, WHA, BDMS, BEM and BJC

2) Domestic Play / Re-Opening (Trading within 1-3 months) – BDMS, BEM, BAM, MINT, ERW, AOT, AAV, CPALL, CPN, CRC, BJC, AU and M

3) Stocks expected good performance in 2Q21 (Trading 1-3 months) – BCH, CHG, HMPRO, GPSC, BPP, PTTGC, IVL, PTTEP, PTG, SONIC, KWM, ORI, SPALI, KKP, KBANK and MTC

4) Dividend Play (Middle-term trading 6-12 months) – LH, QH, ORI, SPALI, ADVANC, KKP, TISCO, STA, STGT, TMT, TVO and STI

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