CIMB Research (Thailand) upgraded the country's energy and petrochemical sectors to 'trading buy' from 'neutral', saying the launch of QE3 by the U.S. Federal Reserve should increase risk appetite, boding well for high beta, cyclical stocks.
"Thailand's petrochemical and energy sectors are likely to outperform domestic sectors, a repeat of the pattern during QE1 and 2 when they outperformed the market and domestic-driven sectors by 2.5-3 times," the broker said in a report.
The likely winners were companies with more sustainable growth driven by internal strengths, limited downside and no overhang, with PTT Global Chemical Pcl, Indorama Ventures Pcl and Siam Cement Pcl among top picks, it said.
Reflecting the oil price slide and weak earnings in the first half, the energy subindex eked out a modest 3.4 percent gain so far this year, underperforming a 24.7 percent gain of the broader SET index.
Reporting by Viparat Jantraprap in Bangkok; email@example.com