Asian Stocks Open Higher, Analyst Expects Limited Upside for SET on Fund Outflow Concerns

Stocks in Asia traded higher on Friday after S&P 500 closed at a record high last night as jobless claims fell by 7,000 to record at 411,000.

 

As of 9:15 local time in Thailand on June 25, 2021, Nikkei rose 0.61%, SSEC gained 0.27%, HSI hiked 0.48%, ASX 200 increased 0.24% and Kospi advanced 0.79%.

Last night, Dow Jones closed at 34,196.82 points, increased 0.95%, S&P 500 rose 0.58% to close at a record high at 4,266.49 points, and Nasdaq extended its gain by 0.69% to another record at 14,369.71 points.

Yesterday, SET Index closed at 1,585.72 points, decreased 6.36 points or 0.40% with a trading value of 83 billion baht.

 

The U.S. Labor Department reported on Thursday that fewer Americans filed new claims for unemployment benefits last week, representing a drop of 7,000 claims to 411,000 as the country is recovering from the Covid-19 outbreak.

 

Asia Wealth Securities (AWS) expected the SET Index today to move in a range of 1,565-1,600 points, looking for a technical rebound after the SET has dropped 47.3 points (-2.9%) over the past 9 trading days.

This echoes concern over the FOMC dot plot signaling a faster rate hike than Consensus had estimated. However, the statement of Fed Chairman to the Congress, including the results of the BoE meeting that signaled no accelerating interest rates, including continuing to implement a monetary easing policy.

AWS believed that in the short term, the market will ease concerns over such issues. However, the SET’s recovery this round will not be strong as the fund flow tends to continue to out. Foreign investors continued to sell net in June, totaling more than Bt4bn (foreign investors accumulated Bt70bn in sales), causing the baht in June 2021 to weaken 2.1%, including the situation of COVID-19 in the country and concerns about the health system in the country.

AWS’ investment strategy also focused on stocks with unique positive factors and the share price is still Laggard, for short-term, hospital stocks, stocks that benefit from working from home and stocks in export groups that benefit from the depreciation of the baht.

 

Core Investment

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

2) Countdown 120 Days Re-Opening (Trading within 3 months) – BAM, BA, BEM, BDMS, BJC, BTS, CPALL, ERW, CENTEL, CRC, SPA, HMPRO, WHA. 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