Thailand’s SET Index opened at 1,679.82 points, increased 17.10 points or 1.03% on Friday, following a sharp reversal in Wall Street last night and positive sessions in the regional market this morning.
As of 10:11 local time in Thailand on February 25, 2022, Nikkei rose 1.47%, SSEC gained 1.06%, Hang Seng Index dipped 0.42%, ASX 200 increased 0.30% and IDX Composite advanced 0.71%.
Last night, Wall Street shook off Russian invasion fear with a sharp reversal on Thursday to close higher for a massive comeback after a decline in early session.
Dow Jones gained 0.28% at the closing. Meanwhile, S&P 500 closed 1.5% higher and Nasdaq rose 3.34%.
Asia Wealth Securities (AWS) expected the SET today to move in a frame of 1,645-1,685 points, hoping for a short-term recovery of the SET from the remarks that the attack on Ukraine will end sooner than expected, and there is a chance that Ukraine may declare its surrender and negotiate with Russia. Although in the near term the recovery is still volatile that the aforementioned event has little direct impact on Thailand, there are the indirect effects from the overall economy both the global trade activities between the SEA region and Europe, including the increase in crude oil prices. This is a factor that puts pressure on the economic recovery in the EM sector, including Thailand, and AWS saw it as a good point to buy a new round of shares.
For the investment strategy, AWS looked into two groups (1) short-term speculation that recommend stocks in the group of oil play benefiting from rising crude oil prices such as BANPU, PTTEP, TOP, BCP and PTT, which significantly increased crude oil prices in 1Q22 add weight to the adjustment of crude oil price assumptions, including adjusting the earnings forecast and the target price increases.
However, investing in such stocks is highly volatile that is not suitable for investors who are unable to bear the risk of short-term volatility and (2) accumulating declining stocks until the valuation becomes attractive and the fundamentals have not changed from the aforementioned events.
AWS also weighed stocks in the hospital sector such as BDMS and BH, as well as travel-related stocks such as AOT, MINT and ERW, domestic transportation which is BEM and DMT, and banking which is KBANK, BBL, SCB and TTB. Issues to follow this week are PCE and U.S. Core PCE Price Index on 25 Feb, which is the inflation index the Fed gives weight in determining the direction of monetary policy.
