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October 19, 2020
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Brokers decide “Thai stocks” this week, falling further. Internal political concerns, “Yuan Ta”, indicate that if violence occurs, the index reaches 1,150-1,180 points. “Kasikornbank” assesses the continuous outflows of foreign money. Thai
The situation of the Popular Party of 2020 becomes more heated after the great meeting of last October 14. Causing the government to declare a serious emergency in Bangkok In the early morning of October 15, the Thai stock index fell for 3 consecutive days, nearly 40 points to close on Friday, October 16 at 1,233.68 points, the market closing level. before the market. There was an incident where the government broke up a demonstration at the Pathumwan intersection on Friday night.
Mr. Nattaphon Khamthakrua The Director of the Securities Analysis Division of Yuanta Securities (Thailand) revealed that The direction of the Thai stock market this week (October 19-23) will depend on internal political factors. And the announcement of the financial performance of the commercial banking group It is unlikely that external factors will affect much as the US elections are close.
The company gives weight to “Foreign political factors” It’s mainly because it’s hotter and hotter now. Because the government went ahead with the law to condone the protesters Even though the number of protesters who protested against it did not decrease Making the political risks greater
Regarding the adPerformance of the banking group It might help strengthen the index a bit, but don’t expect a high. Because if there is a Violent collision Thai stock indices are under pressure to offset other positive factors. Regarding the economic stimulus measures He believes that no new additions will be launched during this time We will have to wait for the political factors to be more stable Because if it comes out, it will not help to support the investment climate.
- If the “prolonged mafia” is entitled to lose 1200 points
Therefore he evaluates that the index is likely to fall to 1,200 points, not much less. Because currently, Thai equities have fallen more than (Underperforming) 8% of the regional stock market, in line with the Hong Kong protests in the middle of last year. Hong Kong stock markets also underperform, but there are some factors supporting Asian stock markets, such as the announcement of Chinese economic figures. If it’s GDP Industrial Production AND retail sales will be announced today (Oct 19), which, if good, will support Asian equity markets. And the Thai stock market did not fall much due to internal political factors.
The company estimates that If the rally continues, the index will swing in the 1,200 to 1,300 range. The pressure on the index fell, it tested 1,150-1,180 points. That estimates the disadvantage not much That if it goes down to the test, there will be a buying force Because if violence occurs Showing that the assembly is almost finished It will be an opportunity to buy But if there is a disintegration of the rally and not so much violence The leaders of the rally were arrested. The number of protesters decreased. The index has a possibility to test the 1,280 to 1,300 level, in which case, personally, it is more difficult to see.
“This round has a great opportunity. But the government does not want it to be prolonged. Because the economy needs to stimulate We estimate that each round will take 6 months, if we count the rallies that started from mid-July to October for 3 months, then we estimate that there is the possibility of the rallies going on. 2 months later, after that it will relax. Which is like a Hong Kong rally, it will also cook for 6 months “
- Recommend keeping communication secure
As for the direction of foreign investment, in the past it continued to sell Thai shares. But when internal political factors emerge, it is believed that the output is unlikely to increase much. Because foreigners do not own a high proportion of Thai shares But on the other hand, foreign investors can use this moment to exchange shares to invest by selling profitable shares and then buying other shares.
However, investing in this period recommends investors focus on buying defensive stocks. Communication group Benefited from the rally range, automotive segment That has benefited from the recovery of the European and Chinese markets. And actions with unique positive factors
- “Kasikornbank” noting that foreigners still sell
Mr. Soraphon Weerameteekul Senior director of securities analysis, Kasikorn Securities, said the outlook for the Thai stock market this week is not yet bright. Pressured by domestic and foreign factors Especially domestic political issues, which will determine the future fate of the Thai stock market.
At this time, it is not possible to predict how the 2020 Citizen Assembly will end. Initially assessed that Yes the assembly continues, but no violent incidents have occurred. Thai equities unlikely to break key support at 1,200 points, butIf this happens the rally has risen to pressure Thai stocks to drop 1,200 immediately. Support is estimated at 1,140 points.
On the other hand, if there is an announcement to end a protest or the National Assembly urges to amend the constitution as requested by the protesters. Considered a positive factor supporting the Rebounds index to test the resistance at 1,240 points.
To know this week’s cash flow trends Foreign investors are expected to sell their network against the historical average of 17 billion Bt in the 30 days of political demonstrations. And in addition to domestic political issues We still have to wait for the US presidential elections to be held in early November, which investors around the world have been waiting to see if In the end, what will the outcome be like? Between President Donald Trump and Democratic challenger Joe Biden. Which are led by surveys in various schools
- Suggest delay investment, reduce risk
The investment strategy this week For investors who do not dare to take risks We recommend delaying investment to wait and first see the political situation in the country. As for risk takers, we recommend two investment groups: food and vehicles. Due to statistics from the last 30 years that caused political unrest in Thailand, both groups rose better than the index.
Introduce shares of Thai Union Group Public Company Limited or TU and Charoen Pokphand Foods Public Company Limited (CPF) as the dominant shares in the food sector, and the automotive sector presents shares of Somboon Advance Technology Public Company Limited or STA.
- Fund to delay the purchase of Thai shares
Mr. Win Phromphaet Chief investment officer Principal Asset Management (Asset Management) Limited said the political rally at this time. It is an additional risk factor that worries investors. With the same risk factors, including the economic slowdown of the global COVID-19 epidemic and the US presidential elections.
Therefore, from the concerns of political factors in the country more and more As a result, our investment strategy has slowed the weight gain in Thai stocks. From before, prepare to increase the weight of Thai stocks at the support level at 1,200 points.
Is The images of the political rallies were quite sharp and without violence. If this continues to drag on AND try to find a solution along with cause and effect. He considered that it would not have any additional effect on the investment climate because this political rally had very little direct impact on the economy. Compared with the situation of the political assembly in the past. Because nowadays, in terms of foreign tourists it is almost non-existent AND people can adapt to work at home after the epidemic of “COVID-19”.
But if the situation worsens, the Thai stock index still has a chance of falling 1,200 support points.
“We still hope that the situation of this political rally is not violent. And there are additional positive factors after the US presidential election. It has the opportunity to once again increase the weight of investment in Thai stocks. “
- Thai baht fluctuates between 31-31.50 baht
Mr. Jitipon Pruksa Metanan Senior Director, Chief Investment Office, Siam Commercial Securities He said that the baht mark this week will swing in a narrow range of 31.00 to 31.50 baht per dollar. The beginning of the week may vary from the Chinese economy. It is expected to grow 5.3% in the third quarter.
As for the flow of capital, it is believed that it will be low as it approaches the US elections. Investors try to reduce their exposure to risky assets. Therefore, there should be capital coming out of the shares. But the bond market must keep an eye on the American brand. If the decline is rapid, it can encourage capital flows to stay in Bond Thai.
