What's interesting about speculating on stocks inside and outside the SET50-100? – Bangkok Insight

What's interesting about speculating on stocks inside and outside the SET50-100?

Stock Exchange of Thailand The list of stocks entering and exiting the SET50 and SET100 indexes will be updated twice a year, and the next final round will be announced in mid-June 2024 and will take effect from July 1 onwards.

This makes this time suitable for investors who want to create an opportunity to speculate on stocks that are expected to be selected for inclusion in the SET50 and SET100 indices in advance by accumulating stocks before the official results announcement date.

Due to past statistics over 70% of all stocks selected for the SET50 on average typically rise about 6.97% before they are actually entered into the calculation. In contrast, the stocks that were removed declined. Data from 2004 to 2022 found that stocks selected for the SET50 would have an average return of 6.97% one month before entering the index, while stocks selected for the SET50 would fall on average -2.8% over the same period.

While stocks selected for inclusion in the SET100 tend to move within a narrow range during the 45-day period prior to the effective date, stocks excluded tend to decline. This is expected to be a result of the NAV of passive funds using the SET100 index being relatively low. Therefore, the impact of the rebalancing indicator is limited compared to the SET50.

Expect stocks to enter and exit from SET50 – SET100

In this regard, Krungsri Securities analysis predicts that 4 companies will be imported into the SET50 in this round:

1. BJC or Berli Jucker Public Limited, 100% chance

2. BCP or Bangchak Corporation Public Company Limited, 90% chance

3. TIDLOR or Ngern Tid Lor Public Company Limited, 90% chance

4. ITC or I-Tel Corporation Public Limited, 90% chance

As for the stocks that are expected to withdraw from the SET50 in this round, there are 4 companies: BANPU (90% chance), SAWAD (90% chance), KCE (100% chance) and COM7 (100% chance).

In addition, the stocks that are expected to be imported into the SET100 are 9 companies: BJC, BA, MBK, CKP, JAS, QH, SKY, PRM, TIPH and the stocks that are expected to be dropped from the SET100 this time are AURA, BY DE, FORTH, MOSHI, NEX, ORI, SNNP, THGH, TKN

How to modify your investment strategy?

Analysts at Krungsri Securities unveiled the SET50/100 Play strategy by recommending speculation on BJC, BCP and ITC stocks as they are groups that have a high chance of being included in the SET50 index this round, along with speculation on stocks that are expected to continue. Enter SET100 as BA and CKP

In addition, investors are advised to avoid investing in stocks that are expected to fall from the SET50 and SET100 due to the risks of underweighting from domestic and international index funds.

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