SET likely to shrug off corporate results and surpass 1,600 points

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MARKET VIEW
SET likely to shrug off corporate results and surpass 1,600 points
Tisco Securities

BANGKOK: -- The Stock Exchange of Thailand appears to have broken out of its recent trading range and looks ready to break past the 1,600-point barrier despite the absence of any major positive catalysts.

Helping offset lacklustre corporate earnings and weak macro data are seasonal LTF/ RMF (long-term equity fund/retirement mutual fund) inflows, year-end window-dressing and a rise in global liquidity supported by China's recent surprise decision to cut the policy interest rate.

Sentiment has also been boosted by news last Wednesday that Customs-cleared exports rose 4 per cent year on year to a 21-month high of US$20.1 million, beating consensus estimates of 0.6-per-cent growth. Also encouraging was that growth was broad-based with rebounds in manufactured exports (up 5.4 per cent year on year versus negative-0.4 per cent previously) and auto and parts (+7.4 per cent vs -12.1 per cent previously) leading the way.

Note that loan growth by banks under our coverage edged up by 0.2 per cent in October (vs a 0.5-per-cent decline in September) on seasonality but the overall trend remained weak. Our banking analyst continues to forecast a mild to modest industry recovery in 2015 (as benefits from the government's infrastructure projects begin to manifest midway through the year) and more substantial, attractive growth in 2016. As SCB (Siam Commercial Bank), KTB (Krungthai Bank) and BBL (Bangkok Bank) have now caught up with peers in terms of share price, our analyst has switched her preference back to KBANK (Kasikornbank) and TMB for their superior/more-secure earnings growth from this quarter through 2015 (4Q14-2015F).

Elsewhere we see investment opportunities in contractors (STEC - Sino-Thai Engineering and Construction - and CK [Ch Karnchang]), residential property (AP), media (VGI) and consumer plays (CPN [Central Pattana], HMPRO [Home Product Centre] and ROBINS [Robinson Department Store]).

Research Department

Trinity Securities

The biggest issue last week was that the Organisation of the Petroleum Exporting Countries (Opec) maintained its ceiling for daily crude-oil production at 30 million barrels, which has taken crude prices across the world to four-year-record lows.

This issue had a negative impact on energy stocks, including those in oil exploration and production, and refineries, which are tending to report stock losses in the fourth quarter. However, those benefiting from the issue are airlines, which will see lower fuel costs. Our picks are THAI (Thai Airways International) and AAV (Asia Aviation), as these two com-panies gain positive performance momentum.

Other groups likely benefiting from the issue are power plants (EGCO [Electricity Generating], RATCH [Ratchaburi Electricity Generating Holding], GLOW) and construction-material firms (TASCO [Tipco Asphalt]).

In Thailand, there appear good signs of fund flows. Foreign investors continued net long in the market throughout last week, closing their short status and opening some new status.

The December 4 meeting of the European Central Bank meeting is not expected to see any key developments as it may wait for the results of the second round of TLTRO (targeted longer-term refinancing operations) on December 11. Our view is similar to ECB president Mario Draghi's recent statement that it may take some time to see positive impacts from the measures.

Investors may position themselves in December by switching their money from

small caps to those in SET50 and SET100. Our studies have found that in December of every year, big caps (SET50) and medium caps (SET100) usually see satisfactory movement.

The reasons include the facts that, first, big caps mostly see purchases from LTFs/RMFs (long-term equity funds/retirement mutual funds) in the country and, second, medium caps included in SET50 usually gain positive sentiment from the Stock Exchange of Thailand's announcement in the middle of the month.

The SET Index is expected to gain its base and stay above 1,600 points this week, given LTF/RMF purchases and improved signs of fund flows.

Source: http://www.nationmultimedia.com/business/SET-likely-to-shrug-off-corporate-results-and-surp-30248876.html


-- The Nation 2014-12-01

[Suriya4]

Thanks Prayuth. Under your leadership, the stock market has raise like a phoenix. All thai investors are so grateful of you. May you rule us forever. We all love you.

[khwaibah]

SET down 3.3 at open.

[elgordo38]

Its new different than most stock markets in the world they are all up up and away no logic to it. Always remember what goes up must come down. Markets cannot defy the laws of gravity forever. If you really dig beneath the fudgy numbers governments are issuing you will see the sea of debt the we are floating on. We are also entering an era of escalating global conflict. Japan the EU are papering their countries with QE currency. They say the American consumer was MIA during Black Friday. Banks are tightening up their lending practices in anticipation of a contraction. Margin lending rules for buying stocks on credit are also tightening especially here in Thailand. When the excrement hits the fan be ready.

[VegasVic]

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Its new different than most stock markets in the world they are all up up and away no logic to it. Always remember what goes up must come down. Markets cannot defy the laws of gravity forever. If you really dig beneath the fudgy numbers governments are issuing you will see the sea of debt the we are floating on. We are also entering an era of escalating global conflict. Japan the EU are papering their countries with QE currency. They say the American consumer was MIA during Black Friday. Banks are tightening up their lending practices in anticipation of a contraction. Margin lending rules for buying stocks on credit are also tightening especially here in Thailand. When the excrement hits the fan be ready.

ElGordo shame on you for raining on their parade, why I am certain that we will also see a massive increase in "quality" tourists this season as a matter of fact I think that the TAT is penning a press release as we speak stating that tourist arrivals will be up 15% this season OK back to reality, yes what goes up (too fast) will come down, the good news is when the SET has its major correction it will prompt foreign investors/funds to repatriate their liquidated baht back into Dollars, Yen and Euros ect. thereby causing the Thai baht to weaken considerably and this will make Thai exports more attractive. The shot in the arm to the Thai export sector will be very much needed as the situation in China continues to erode, and the ripples of a slowing Chinese economy will have substantial repercussions for all of the ASEAN nations ( not too mention other major exporters to China like Brazil and Australia)

[Naam]

Its new different than most stock markets in the world they are all up up and away no logic to it. Always remember what goes up must come down. Markets cannot defy the laws of gravity forever. If you really dig beneath the fudgy numbers governments are issuing you will see the sea of debt the we are floating on. We are also entering an era of escalating global conflict. Japan the EU are papering their countries with QE currency. They say the American consumer was MIA during Black Friday. Banks are tightening up their lending practices in anticipation of a contraction. Margin lending rules for buying stocks on credit are also tightening especially here in Thailand. When the excrement hits the fan be ready.

not to forget the skies will be falling any day from now