Tuesday, February 6, 2024

Thai Stock Mastery: Seizing SGX's Lucrative Opportunities

 

Have you ever wondered how you can take a position in some of the Top Thailand companies listed on the SET, without the hassle and additional cost of buying the stocks directly there?

Since end of May 2023, it is now possible.

We can take a position in some of the Top Thailand companies like any other stocks listed on the Singapore Exchange.

We can buy what is called Singapore Depository Receipts, in short, SDRs.

SDRs are instruments representing beneficial interest in an underlying security listed on an overseas exchange and are issued for trading on the securities market of the Singapore Exchange by an intermediary, SDR Issuer, on an unsponsored basis.

It will enable SGX investors to expand investment horizons to overseas listed companies in a simple and cost-efficient manner.

So, with the launch of Thai Underlying SDR as at end May 2023, traders and investors in Singapore can now invest in such Thai companies just like any Singapore stocks listed on the SGX with the same settlement procedures and SGD traded currency.

There are 3 blue chips Thai underlying SDRs currently which is what I will be talking about in this article and how you can potentially profit from.

I will be analyzing the charts of these 3 underlying Thailand stocks before sharing how one can take a position on the SDRs listed on the SGX and the potential target price based on current price levels.

 

The 3 underlying Thai stocks listed in the SET and their codes are:

 

Underlying Thai stocks on SET

Thai SDR on SGX

Airports of Thailand

AOT.BK

TATD

PTT Exploration & Production

PTTEP.BK

TPED

CP All

CPALL.BK

TCPD

 

 

1) Airports of Thailand (AOT.BK) manages and operates airports in Thailand and is a top Blue chip on SET with the highest weightage of 8% as Thailand is focused on Tourism.

 

Over the past 2 months, we have continued to see support coming back at 58 (S$2.20) where buyers started to bargain hunt. As mentioned previously, this is a key level we have rebounded from since more than 2 years back so likely to see some buying pressure as prices approached here.

The short-term trend has also started to point up over the past few days as seen from the 20-day moving average with prices crossing back above it. May see some near-term upside towards the next resistance at 66 (S$2.50) where some profit taking can happen again.

This resistance was originally the support we broke down in Nov 2023 would be key for the reversal to continue towards 76 (S$2.90). For the longer-term trend to reverse up as well, we need to break the 66 (S$2.50) level firmly and stay above.

So how does one take a position in Airport of Thailand from the SDR listed on the SGX?

Well, you can take a position in this SDR, which is named AIRPORTS OF TH TH SDR (TATD), currently priced at S$2.36.

As mentioned, this SDR is like a normal Singapore stock where its traded currency is in SGD and settlement procedures the same.

If it does dip back to near its support again at 58 (S$2.20) and some bullish candles are spotted, an entry can be taken for a potential upside of about 13% if we rebound back to levels like 66 (S$2.50).

 

2) PTT Exploration & Production (PTTEP.BK) is a leading oil and gas exploration and production company in Thailand and is a top Blue chip on SET with the top 10 weightage.

 

PTTEP.BK currently trading at 151 (S$5.75) is still attempting to firmly break the critical 150 (S$5.70)  resistance that it has traded below for about 2 months now. Over the past month, seems like a higher support has come out at around 145 (S$5.50) as it consolidates above it now.

The 20-day moving average line which represents the short-term trend has begun to flatten out  again after pointing upwards due to the upticks seen in December 2023. Only a firm move above 150 (S$5.70) resistance can see the short-term trend turn up again. This can happen with prices closing from 152 – 156 on above average volume that can show buyers ready to take it to the next higher phase.

The upside target can be to 160 (S$6.08) first then 180 (S$6.85) which was the recent high last year. One can consider entry above 145 (S$5.50) support for a potential break of 150 (S$5.70).

Would be good to have a stop loss level at around 142 (S$5.40) to get out in case we fail to hold above 145 (S$5.50) support.

So how does one take a position in PTT Exploration & Production from the SDR listed on the SGX?

Well, you can take a position in this SDR, which is named PTTEP TH SDR (TPED), currently priced at S$5.72.

For an entry near 145 (S$5.50) to ride to 180 (S$6.85), we are looking at an 23% potential upside as per targets.

 

3) CP ALL (CPALL.BK) Operates the 7-Eleven convenience store chain in Thailand and has the most extensive convenience store network in the country.

 

CPALL.BK has continued to hold above the 50 (S$1.90) support over the past month and has staged a rebound from this key psychological level again over the past few days.

With prices crossing back above the 20-day moving average, we may start to see some short-term upside back to 60 (S$2.28). This level is now a key resistance to watch, and it was originally the support we broke in Oct last year.

The longer-term trend is still pointing down below this 60 (S$2.28) resistance as seen from the 100 day and 200 day moving averages lines which are pointing down with prices below them.

One can consider timing entry near the 50 (S$1.90) support level again if it dips which can offer much more upside.

So how does one take a position in CP ALL from the SDR listed on the SGX?

Well, you can take a position in this SDR, which is named CP ALL TH SDR (TCPD) currently priced at S$2.09. For an entry near the 50 (S$1.90) support, we are looking at a 19% potential upside as per targets to S$2.28.

 

 

Footnote: Currency conversion used from THB to SGD is 0.038.

 

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