Daily Strategy: FSS Expects Sideways-up Trends with 1,700pts Target

Major stock markets in Asia traded higher on Friday as China returned to business with a rise in the service sector and the easing concerns over the U.S. debt ceiling after the Senate approved a temporary bill.

 

On October 8, 2021, Thailand’s SET Index opened at 1,641.23 points, increased 7.51 points or 0.46%.

As of 10:05 local time in Thailand, Nikkei rose 2.16%, Shanghai Composite gained 0.60%, Hang Seng Index increased 0.21%, Australia ASX200 hiked 0.79% and Indonesia IDX Composite edged 1.09% higher.

The Senate approved a temporary bill to raise the debt ceiling by $480 billion until December 3, 2021, to avoid a default in the upcoming week. 11 Republicans joined all 50 Democrats in the much needed vote to get the 60 minimum.

Meanwhile, China’s Caixin/Markit services Purchasing Managers’ Index (PMI) in September rose to 53.4 from 46.7 in August as the services industry returned to activity growth while the major COVID-19 outbreak in the eastern province of Jiangsu cooled down.

 

Mr. Kantara Ladawan na Ayutthaya, executive director of Finansia Syrus Securities (FSS), through “Kaohoon Jor Talad Program” on October 8, 2021, stated that the SET Index could move in sideways-up trend and could go up to 1,670 points in near term. Meanwhile, the target of 1,700 points is also achievable in a longer term.

As for the banking sector that is still trading at a lower level, Mr. Ladawan noted that banking stocks still have rooms to play with an upside around 10-20%, but needed to be cautious when investing.

As for upside risks, Mr. Ladawan recommended to monitor Fed’s QE tapering and policy rate as well as the reopening that could weigh sentiment down due to fear of uncertainty after a sudden reopening and also a risk of Saudi Arabia prompting an output hike.