THAI ELECTION, BANK EARNINGS IN SPOTLIGHT

Thai shares gained on the first trading day of the year, but soon lost steam as a hefty selloff in shares of Delta Electronics via big lots at below-market prices pressured overall sentiment.

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Investors also dumped finance plays (MTC, SAWAD and TIDLOR) following worse than expected earnings reported by AEONTS, which reflected lending business risks connected with economic fundamentals.

Key external factors include the US capture of Venezuela's president and subsequent actions related to oil sales, the American withdrawal from dozens of international agencies, and President Donald Trump's continued threats to seize Greenland.

Developments related to Greenland in particular underline geopolitical risk going forward and affect cyclical commodity plays (energy, oil, refineries, petrochemicals and food exporters).

We now see a clearer trend of sector rotation rather than the scattered investment approaches that drove gains in selected stocks last year.

On the domestic front, campaigns are in full throttle for the Feb 8 election, with competition intensifying along with speculation about possible coalition scenarios.

The market has diverse views on the election as opinion polls show the outcomes for the three main parties — People’s Party, Bhumjaithai and Pheu Thai — might not differ very much. Hence, anything is possible until the results become clear.