1) 3Q16 earnings for Bank and ICT sectors are not going to impress. Though banks did touch bottom in 2Q16, recovery in 3Q16 is unlikely to be sufficiently strong to lead the SET up. For ICT, main players like ADVANC, INTUCH, DTAC and TRUE are expected to have unimpressive 3Q16 performance, following higher costs and expenses. 2) Market volatility before the November 8 US presidential election. There is no clear leader in the latest polls. (Stock markets will respond positively to a Clinton win). The
SET may also be pressured by outflows during a US election rally. 3) Worries over the timing of the Fed’s rate hike. Markets expect this to take place in December given the signals at the September meeting. The possibility of the hike will be strengthened by beats in non-farm payrolls and advance 3Q16 GDP (October 28). We see limited upside for the SET at 1525 and 1555 with a chance of moving down. A fall below 1470 is negative; next resistance is 1440.