Thailand strategy: Correction reaches tactical target; near-term consolidation likely

As the SET Index has reached our tactical target for correction at 13x consensus PE band, we
change our near-term view from negative to neutral and expect the market to consolidate
until there are new global moves on key dates like June 6 (ECB meeting), June 7 (US Fed
Chairman Bernanke’s testimony) and most importantly June 17 (Greece’s election). For now,
the market is unlikely to bid into commodity plays despite their rock bottom valuations. We
believe the right near-term strategies are sticking with consumers and property shares
(Robinson Department Store (ROBI.BK/ROBINS TB)*, Sansiri (SIRI.BK/SIRI TB)) and adding
some positions in bombed down banks and materials (KASIKORNBANK (KBAN.BK/KBANK
TB)*, Siam Cement (SCC.BK/SCC TB)*).