Maybank Kim Eng Securities has made an analysis for the trading session on May 16, 2019, stating the SET Wednesday narrowly moved with a thin trading value. It was driven by buying pressure on BEM and hospitals BCH and BDMS. However, electronics stocks were continued sold HANA and KCE.
The index closed at 1,621.27 points (-12.57 points) with a trading value of THB 49.8 billion, (THB 53.9 billion the previous day). Foreign investors net sold Thai shares by THB 847 million, institutional investors net sold by THB 623 million. There were net Short on SET50 index future by 19,158 contracts.
Investment Theme: Unbiased view on domestic politics
His Majesty the King will preside over the opening of the new parliament on May 24th. A Royal Decree has been issued for parliament to convene starting on May 22nd after a Royal Command endorsed 250 new senators. Once the Senate and House speakers are elected, their names will be submitted to HM the King for Royal assent, after which the House speaker, who is also the president of the parliament, will call a joint meeting of the two houses to vote for the Prime Minister from among the candidates.
Initially, Maybank has a neutral perspective on such factors. However, the important factor is that although the market and Maybank hasa consistent view, that is, even though there is a high chance that the Pracharat party and alliances to form the government but the MPs vote in the council that is close to the level 245-255, votes and / or administration with more than 15-20 parties is considered a mild risk. Keep an eye on the Democrat party stance after Jurin was elected as the leader of the Democrat Party. If part of the Democrat MPs turn to support the opposition, it may cause additional risk to the administration in the medium term for legislative and no confidence vote. Thus Maybank estimates that the sectors related to public and private investment such as (I, G) may be affected.
This week, SET should swing in a range of 1,620-1,655 points. For high-risk takers, trading buy on PTTEP, CPALL, GPSC (capital increase).
Jurin wins Democrat leadership contest in landslide.
Stock Pick & Trading Idea
Given the aforementioned foreign factors pressuring the investment sentiment, low-risk takers should halt your investment to wait for the clarity.
For high-risk takers, accumulate PTTEP, (THB 150+8 from Murphy). 2Q19 earnings are forecast to improve QoQ alongside the Dubai crude oil price QTD rising 11% QoQ while gas price steady QoQ. Sales volume should increase by 3-4% QoQ, mainly from South Bongkot project readies to resume operation after maintenance shutdown.
If dips below 1620, reversal double top pattern confirmed: The index dipped below the low 1629 driven by selling pressure on energy, retailer and electronics sectors. The index is likely to move downward to test the support at the neckline of 1620. If it dips through such level, the index will form a reversal double top pattern leading to more downside. The long term downtrend target is set at 1560 points, with supports at 1600 and 1580 along the way.
1) Investors with stocks, if dips below 1629, stop loss. Use the neckline 1620 as a stop loss spot.
2) Without stocks, wait and see until the trend is clear or strong rebound.
Maybank sets a support line at 1600 points and 1620 points while setting a resistance line at 1630 points and 1638 points
Keep an Eye On
Bhumjaithai party to announce its stance on May 20.