THE SET Index struggled to test the resistance level at 1,710 points last week but failed to break through due mainly to low volume.
The average daily trading turnover was below Bt40 billion or a market turnover of 56 per cent of total market cap. It's very low, compared to the 10-year average of 83.5 per cent (peak-101 per cent in 2010 and low-73 per cent in 2008, 2015 & 2017). To reach its 10-year low at 73 per cent, the daily trade at market cap of Bt17.59 trillion, must not be less than Bt52 billion- a level considered sufficient to drive the SET Index to above 1,700 points.
Local institutional investors were the main players with no signs of return of foreign capital. It's hard for the SET Index to stay above 1,710 points if there are no positive movements in the market turnover and foreign capital.
As a positive news, the Thai general election is said to take place as soon as Feburary 24, 2019 or May 5 the latest.
US-China trade war continues to be a concern. We are waiting for the release of the US trade balance data for July on August 28 to find out its impacts on global and Thai trade Possible impacts on Thai export are expected from the fourth quarter onwards.
Investment strategy: Focus on selective buy. We pick CPF (FV@Bt30) for higher prices of swine and chicken, DCC (FV@Bt2.90) for its adjusted distribution channels and dividend yield of nearly 6 per cent.
Therdsak Thaveeteeratham, Executive Vice President,
Research, Asia Plus Securities