Daily Strategy for Investors on April 1, 2019

Maybank Kim Eng Securities has made an analysis for the trading session on April 1, 2019, stating that SET on Friday slightly gained driven by strong buying pressure several sectors led by VGI, MAJOR, financial KTC and JMT.

The index closed at 1,638.6 points (+4.4 points) with a trading value of THB 39 billion, (THB 48 billion the previous day). Foreign investors continued to net buy Thai shares by THB 1.3 billion, institutional investors net sold by THB 348 million. There were net short on SET50 index future by 4,518 contracts.

 

Investment Theme: 1Q19 Wrap Up & 2Q19 Strategy
The SET in 1Q19 has gained 75 points, +4.7%QTD (MSCI world +11%, Emerging Market +8%). Foreign investors net sold Thai shares by THB 13 billion, institutional investors net bought by THB 32 billion. Outperformers are food, tourism, media and ICT sectors while petrochemicals dropped. Key events include 1) FED revised GDP growth forecast & no interest rate hike. 2) Thailand election outcome shows both sides have relatively close numbers of MPs. Wait for clarity on May 9. 3) OPEC cancels the meeting in April.

 

2Q19 Investment Theme
The SET this quarter should swing sideways upward with key resistances at 1,680/1,730 to wait for 3 factors; 1) US-China trade talks should not get worse, 2) Several leading central banks FED, ECB, BOJ and PBOC reduce their hawkish stance. Some banks switched to boost liquidity. 3) EPS19 was cut down, leading to the limited downside at the current level. The SET’s key supports are at 1,585 and 1,620. Maybank has a mildly positive view on the MSCI lifting weight on Thai shares by calculating NVDR. This is in line with the market forecast. However, to open awider opportunity for foreign investors to short Thai shares, it may lead to more volatility in the medium term.

 

Big Issue
New LVT measures take effect today.

 

Stock Pick & Trading Idea
Gradually accumulate stocks with 2 themes; sector expected to face limited impact from political factors led by retail BJC, TP THB65 and tourism SPA, TP THB15.80 and sectors with limited downside, recovering margin with attractive valuation led by BCP, TP THB39 and BCH TP THB20.

 

Technical View: If fails to breakout 1645, gradually take profit at resistance and buy on dip
The SET index opened with a gap and dropped in the afternoon driven by strong buying pressure on energy, retail and hospital sectors. However, selling pressure was seen on ICT, conmat and banking sectors. The index failed to maintain above 1645. So the main trend remains sideways. In the near term, if the index rises, gradually take profit at resistance 1645 or if weakens, wait to buy stocks at supports 1630-1635 for rebound trading.

 

Investment Strategy:
1) Investors with stocks, If rebounds intraday to test the resistance 1645, sell stocks for the next trading cycle. If dips below 1630, gradually lock profit.
2) Without stocks, gradually buy stocks if weakens intraday to test supports 1630-1635, only for a rebound trading.

 

Maybank sets a support line at 1615 points and 1625 points, while setting a resistance line at  1637 points and 1645 points.

 

Keep an Eye on:
China reports Manufacturing PMI today.