Daily Strategy: SCBS Expects Limited Downside as Investors Look Forward to Reopening

Stocks in Asia traded mostly lower on Monday as Hang Seng Index led to fall by more than 3% from the selloff in Evergrande Group.

 

Thailand’s SET Index opened at 1,618.34 points, decreased 7.31 points or 0.45%.

As of 10:05 local time in Thailand, Hang Seng Index fell 3.46%, Australia ASX 200 dropped 1.78% and Indonesia IDX Composite slipped 0.63%.

Markets in China, Japan and South Korea are closed on Monday for holidays.

 

Chinese property developer Evergrande Group is facing its own financial crisis with $300 billion in liabilities and some of them will soon default and will possibly send shockwaves through the Chinese property sector.

 

Mr. Ekpawin Suntarapichard, investment strategists of the Siam Commercial Bank Securities (SCBS), through “Kaohoon Jor Talad Program” on September 20, 2021, stated that the Thai market received negative sentiment from overseas as Dow Jones Future dropped more than 300 points and Hang Seng Index fell more than 3%, coupled with concerns in the rising corporate tax rate in the U.S.

However, Thailand still has its own domestic sentiment on the reopening, which limited downside to a support level at 1,610-1,614 points, while the resistance level is at 1,630-1,640 points.

Mr. Suntarapichard recommended mid and small-cap stocks with positive factors of its own, focusing on positive 3Q earnings, reopening and exports themes such as  TU, TNP, BEM and GFPT.

As for RBF, Mr. Suntarapichard stated that the company could have short-term negativity from the discount of the share acquisition by TU, but if the stocks could stand its ground around 18-19 baht in today’s session, the share price could recover again.