Daily Strategy for Investors on March 13, 2019

Krungsri Securities has made an analysis of the trading session of March 12, 2019, stating that SET Index moved narrowly and ended up 0.2 points (+0.01%) at 1,627 points in THB 37 billion turnover. Foreign investors continued to see Thai stocks leading up to the election. They were net sellers of Thai stocks for a 12th day at THB 1,066 million and sold net THB 553 million worth of Thai bonds.

Krungsri rates the market neutral today, expecting the benchmark SET Index to move sideways between 1,625 points and 1,630 points. Investors might stay sidelined pending the Brexit vote today. The worst-case scenario would be a No-deal Brexit. A better outcome would be the UK extending the Brexit deadline past 29 March.

 

Today’s Highlights
(Negative) Theresa May’s Brexit deal (391-242 votes) failed in a second defeat. Krungsri believes the UK to extend the deadline: The UK parliament rejected May’s Brexit deal at 391-242 votes. Today, they will vote again on No-deal Brexit, which Krungsri expects to be rejected again and there will be a vote on Thursday to extend the deadline. If the extension is rejected, the UK will leave the EU on 29 March without a deal.

(Positive) No concerns over US inflation; expect FOMC to keep interest rate at 2.5% at 20 Mar meeting: The US reported the CPI rose 0.2% mom in February, the slowest rise in 2.5 years, and dropped to 1.5% yoy vs 1.6% yoy in January. Core inflation fell to 2.1% from 2.2% in January. The steady low inflation would pressure the Fed to maintain rate at the 20 Mar FOMC meeting, which could attract funds into emerging markets, including Thailand.

(Positive) CCI rise for second straight month in February to 82, benefiting commerce stocks: The Thai Chamber of Commerce reported the CCI rose to 82 from 80.7 in January, supported by confidence in domestic politics and tourism sector amid rising Chinese tourist arrivals. This should boost spending, which would benefit our top picks CPALL and ROBINS.

(Positive) FTSE to reshuffle Thai stocks in March (based on 15 Mar closing price): Weighting of Thai stocks in FTSE All World Asia-Pacific Index will be increased from 1.83% to 1.87%, which could attract more than Bt5bn into the SET. For FTSE Large Cap Index, HMPRO, GULF, EA, MINT, MAKRO, BEM, DIF will be added. For FTSE Mid-Cap Index, MTC and GPSC will be added.