The Nation - - BUSINESS -

The SET in­dex rose by 1.8 per cent in the first two weeks of the year on the back of pos­i­tive devel­op­ments in two key is­sues – the US-China trade talks show­ing signs of a com­pro­mise, and the Fed’s dovish tone on fur­ther rate hikes and its in­ten­tion for a grad­ual re­duc­tion of its bal­ance sheet.

Last week, cor­rec­tions were made in the prices of two sec­tors that came un­der pres­sure. Hos­pi­tals were con­fronted with a state plan to con­trol prices of drugs, med­i­cal prod­ucts and ser­vices while ICT stocks took a dip after DTAC agreed to pay CAT Tele­com com­pen­sa­tion to end all claims re­lated to a con­ces­sion dis­pute. The move spilled over to some com­mer­cial banks, its cred­i­tors.

This week, volatil­ity of the SET In­dex is ex­pected to con­tinue with 1,600 points as the ma­jor re­sis­tance level. Sup­port is set at 1,570 points where the mar­ket price to earn­ings ra­tio is 14 times.

Is­sues loom­ing over the Thai ex­change this week in­clude the US gov­ern­ment shut­down, Brexit and the na­tional elec­tion sched­ule. The amount of new cap­i­tal will not be suf­fi­cient to sup­port a rise in the SET In­dex, which is not ex­pected to pass 1,610 points.

We do not rec­om­mend short-term trad­ing, given the high volatil­ity in prices. How­ever, if the SET In­dex rises to 1,600 points, it will be a good chance to ac­cu­mu­late stocks with sound fun­da­men­tals for long-term in­vest­ment. Our theme is do­mes­tic play and our picks for the week are KBANK, CPALL, STEC, HANA and PLANB. – Therd­sak Thavee­teeratham, ex­ec­u­tive vice pres­i­dent /Re­search, Asia Plus Se­cu­ri­ties

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