Trinity Securities has set a support level of 1,580-1,600 points and recommends buying when the index reaches 1,630 points, warning of six risks affecting the Thai market movement, including high inflation, a weak baht, brokers lowering earnings forecasts for companies affected by higher energy prices, and foreign net selling following a net purchase of more than THB120 billion.
As of May 3, the SET Index has lost 10.18 points, or 0.61%, to 1,657.26, with a total trading value of THB33,969 million.
Trinity expects a rebound in markets mostly across the globe in early May, due to the absence of negative sentiment nor surprises after the FOMC meeting, and traders having already priced in the Fed’s rate hike. After that, the SET Index will experience a correction due to seasonal factors such as fund outflows and increasing diesel prices.
With this regard, Trinity recommends defensive stocks and suggests investors delaying investment until the SET index shrinks to a point where it becomes more attractive in terms of valuation, after a severe decline in the SET Index’s earning yield gap.
Stocks in the healthcare, consumer staples, and AMC sectors are recommended as defensive plays. However, given the recent gains in the healthcare and AMC sectors, Trinity advises laggard plays in particular, especially consumer staples such as CPALL, MAKRO, and BJC.
