Daily Strategy: SCBS Recommends Laggard Stocks to Take Profit amid Downside Risks

SCB Securities saw downside risks in near future, recommending profit taking on laggard stocks such as IVL, TNP, BLA and ERW.

Major stock markets in Asia traded mostly higher on Monday as Japan and Hong Kong led the gain amid rising oil prices in the morning of Asia trading hours.


On October 11, 2021, Thailand’s SET Index opened at 1,644.68 points, increased 5.27 points or 0.32%.

As of 10:15 local time in Thailand, Nikkei rose 1.57%, Shanghai Composite gained 0.44%, Hang Seng Index jumped 2.01%, Australia ASX200 slipped 0.58%, while Indonesia IDX Composite dropped 0.13%.


Oil prices continued to edge higher on Monday as Brent crude gained 0.96% to trade at $83.18 per barrel, while West Texas Intermediate (WTI) rose 1.46% to $80.51 per share.


Mr. Ekpawin Suntarapichard, investment strategists of the Siam Commercial Bank Securities (SCBS), through “Kaohoon Jor Talad Program” on October 11, 2021, stated that the energy sector could lead the market higher to test the 1,650 resistance level, following a rise in oil prices. Mr. Suntarapichard cautioned on the profit taking as the market is closing the gap to its previous high.

Meanwhile, the analyst advised investors to monitor overseas factors such as the economic slowdown in China, Fed’s upcoming QE tapering, the lower-than-expected U.S. job creations in September and inflation. As for domestic factors, the higher cost in the energy sector could result in a downside to a negative surprise for a lower-than-expected 3Q earnings.

In addition, Mr. Suntarapichard stated that the recovery in Japan or Hong Kong was due to an earlier plummet, while Thailand’s SET Index has had that recovery in recent days.

Looking in the near future, the analyst saw negative factors rather than positive, thus, recommended profit taking when reaching near 1,650 points.

As for stocks to focus, Mr. Suntarapichard recommended laggard stocks such as; 1) IVL expects 3Q growth YoY and QoQ (TP Bt49-50), 2) BLA on Fed’s QE tapering and rising bond yield (TP Bt33-36), 3) TNP on lower PE and positive outlook in 2021-22 (TP Bt7) and 4) ERW expects to look past 3Q earnings to a recovery in 4Q (TP Bt3.40-3.50).

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