Post by mangomoney on Sept 2, 2017 15:12:43 GMT 7
Bualuang warns of limited SET upside
Published: 2/09/2017 at 07:30 AM
Newspaper section: Business
Thai equities have a short-term underweight outlook because of the growing risk of a correction in global equity markets, says Bualuang Securities.
The firm has underweighted Thai equities for September after the Stock Exchange of Thailand index rocketed beyond 1,600 points in late August, said executive vice-president Chaiyaporn Nompitakcharoen.
“The risk of a global equity market correction is intensifying,” he said. “In such an event, the SET would almost invariably be hit. We have reduced our Thai equities stance to underweight.”
The SET index closed on Friday at 1,618.42 points, up 0.1%, in trade worth 44.76 billion baht.
Even if global markets were to remain elevated, the scope for SET upside appears limited in the absence of any new catalysts or renewed market confidence, Mr Chaiyaporn said.
“Sustained baht strength against the greenback and decent macroeconomic data may help support the Thai bourse, but sustaining the main index above 1,600 presents a challenging proposition,” he said.
Mr Chaiyaporn said expectations for SET-listed companies’ earnings in the third quarter, meanwhile, are moderately positive, with a preliminary growth forecast of 8% year-on-year and 3% quarter-to-quarter.
Despite a short-term underweight stance for Thai equities, Bualuang Securities has an overweight view of corporate bonds rated above BBB+ on expectations that the US Federal Reserve will keep its policy rate steady through year-end, while subdued inflation is likely to keep bond yields static.
“In the event of [capital] flight [towards] fixed-income assets in response to an equity market correction, bond exposure would provide good protection for portfolios,” Mr Chaiyaporn said.
Bualuang Securities also has an overweight outlook for property funds, which offer good protection in case of an equity market correction under a scenario where bond yields remain subdued during the coming months.
Geopolitical tensions, meanwhile, will continue to support demand for safe-haven assets, Mr Chaiyaporn said, adding that political turmoil in the US is likely to intensify ahead of the tabling of a new budget and raising of the public debt ceiling, two measures that must be passed by Sept 30.
“Our quantitative analysis indicates that the bullion price will move within a range of US$1,230-1,350 (40,799-44,779 baht) per troy ounce in September,” he said. “We remain neutral on the lustrous metal. Cash equivalents represent our defensive position during periods of intense risk or instability in the equity and bond markets.”
www.bangkokpost.com/business/finance/1317275/bualuang-warns-of-limited-set-upside
Published: 2/09/2017 at 07:30 AM
Newspaper section: Business
Thai equities have a short-term underweight outlook because of the growing risk of a correction in global equity markets, says Bualuang Securities.
The firm has underweighted Thai equities for September after the Stock Exchange of Thailand index rocketed beyond 1,600 points in late August, said executive vice-president Chaiyaporn Nompitakcharoen.
“The risk of a global equity market correction is intensifying,” he said. “In such an event, the SET would almost invariably be hit. We have reduced our Thai equities stance to underweight.”
The SET index closed on Friday at 1,618.42 points, up 0.1%, in trade worth 44.76 billion baht.
Even if global markets were to remain elevated, the scope for SET upside appears limited in the absence of any new catalysts or renewed market confidence, Mr Chaiyaporn said.
“Sustained baht strength against the greenback and decent macroeconomic data may help support the Thai bourse, but sustaining the main index above 1,600 presents a challenging proposition,” he said.
Mr Chaiyaporn said expectations for SET-listed companies’ earnings in the third quarter, meanwhile, are moderately positive, with a preliminary growth forecast of 8% year-on-year and 3% quarter-to-quarter.
Despite a short-term underweight stance for Thai equities, Bualuang Securities has an overweight view of corporate bonds rated above BBB+ on expectations that the US Federal Reserve will keep its policy rate steady through year-end, while subdued inflation is likely to keep bond yields static.
“In the event of [capital] flight [towards] fixed-income assets in response to an equity market correction, bond exposure would provide good protection for portfolios,” Mr Chaiyaporn said.
Bualuang Securities also has an overweight outlook for property funds, which offer good protection in case of an equity market correction under a scenario where bond yields remain subdued during the coming months.
Geopolitical tensions, meanwhile, will continue to support demand for safe-haven assets, Mr Chaiyaporn said, adding that political turmoil in the US is likely to intensify ahead of the tabling of a new budget and raising of the public debt ceiling, two measures that must be passed by Sept 30.
“Our quantitative analysis indicates that the bullion price will move within a range of US$1,230-1,350 (40,799-44,779 baht) per troy ounce in September,” he said. “We remain neutral on the lustrous metal. Cash equivalents represent our defensive position during periods of intense risk or instability in the equity and bond markets.”
www.bangkokpost.com/business/finance/1317275/bualuang-warns-of-limited-set-upside
