Thailand’s stock market saw a slight dip yesterday amid heavy selling of Delta Electronics (Thailand) Plc (DELTA).
DELTA which had a market capitalization of 948 billion baht, saw its capitalization fall by 14% to 813 billion baht on Monday.
Meanwhile the SET Index ended at 1,633.76 points down 1.59 points. The market saw retail investors as net sellers (-1.77 billion baht) and local institutions as net buyers (+989 million baht). Foreign investors were net buyers of (+515 million baht).
Stocks that were the most active on Monday were
Issues to Watch Out – Politics and Economy
- Domestically the usual political bickering and speculation about the future of the present coalition government is hogging the press. It is good fodder for the people bored in the semi lockdown, yet no impact on the investor sentiment.
- Thai Baht was the second-best performing currency in last month, rising 1.34%, just below Malaysian Ringgit’s 2.1%. Bank of Ayutthaya analysts feels it will strengthen further. Median forecast by economists for 4Q this year is 32.50 baht to the US Dollar.
- This will help foreign inflows to Thailand. A snapshot of select countries inflows in US million dollars this month is below.
- Japan’s Nikkei has been trading at the highest level since 1990 when the country’s economy was in a ‘bubble’ phase.
- Nikkei 225 was trading at above 30,626 points.
- Crude oil inventories are at historic low level, shrinking to the lowest level in 20 months from the global rebounding in economic activity.
- US stockpiles are at 2-year low level and China has the smallest reserve since September 2020. Even the inventories at the African, Saldanha Bat, are the lowest level since April according to Bloomberg.
- All this points to increase in oil price when the economic activity picks up in Asia.
Here are some of the key stocks to look out for today
- DELTA – Finally the stock price corrected. Since it is mostly a retail investor favorite, net sale by foreigners was just U$1.5 million. It also saw net sale of NVDRs worth U$9 million, and U$6 million worth was sold short as DELTA-R.
This is still very expensive stock as does not represent Thailand economy that limits large institutions to exclude from the portfolio. If you are looking to short the stock, Buy a ‘PUT’ option.
- SAWAD – At the Opportunity Day yesterday, it said it was confident loans portfolio will rise 20% this year. Non-performing Loans (NPLs) may rise a bit to 4-5%, with current 4.23%.
This is a repeat of information provided to analyst last month, following which consensus downgraded earnings by 5%. It has 13 Buys, 1 Sell and investors have been shorting its competitor MTC more aggressively than SAWAD last 10 days.
- AOT – A big uptick in with 2.0% rise in share price came perhaps from net foreign buying of 255 million baht of NVDRs. This is huge given it is almost 27% of turnover yesterday. With talks of quarantine free entry for foreigners to few provinces, sentiment is positive on AOT.
- JMART-W5 – Speculation that is trading at 19.20 baht may suddenly collapse. With exercise price of Baht 70 to buy a share of JMART that trades on 43.75, it an out of money trade. Even if JMART price rises to baht 70 during the next 4 years, life of the warrant, JMART-W5 is hugely overpriced.
How do you short it if you do not own it, for that Equinstock will revert tomorrow.
- BEM – Another reopening play. It is stuck in a trading channel. Thanchart just issued a BUY note with upside of at least 14%. Rising in traffic and potential win of the West Orange Line (perhaps in late 2022) concession as a long-term trigger are key reasons to buy.
For Equinstock it is just a trade. Look at the trading pattern in chart below.
- PTTEP – Rising oil price and absence of hedging loss in 3Q to prompt earnings beat
- TTA – A laggard shipping play
- MINT – A laggard with limited upside (what kind of recommendation is this, Mr. S broker)
- BEM – A reopening play
- JMT – It was up 5% yesterday as a catch-up play. Chartist feel the rally has legs