Daily Strategy for Investors on April 17, 2019

Maybank Kim Eng Securities has made an analysis for the trading session on April 17, 2019, stating SET on Friday, April 12,2019, moved in a narrow range with a thin trading value. Strong buying pressure was seen on BTS and mid caps like WORK, RS, TASCO and ORI.

The index closed at 1,660.4 points (+1.3 points) with a trading value of THB 33 billion, (THB 40 billion the previous day). Foreign investors switched to net sell Thai shares by THB 1.1 billion, institutional investors net bought by THB 972 million. There were net short on SET50 index future by 3,945 contracts.

 

Investment Theme: Global plays stocks to benefit from trade talks outcomes, eyes on oil prices
The G20 Summit held last weekend saw many leaders expressing concerns over the global economic slowdown. They prepare several measures to help maintain the economic growth this year both monetary and fiscal policies. However, the US-China trade talks have seen some positive developments. Maybank expects Trump and Xi Jinping should meet in the next few months to put an end or ease the impact of the trade war.

If that is the case, Maybank believes the global plays stocks are likely to recover (throughout the past six months, the energy, electronics, petchem sectors have plummeted by 10-16%, while domestic plays like electric train, power plant and retail sectors outperform the market.) For the energy and petrochemical sectors, Maybank has a positive view on the crude oil prices on the supply side supported by the OPEC cut production to four years’ lowest, especially Saudi Arabia and Venezuela.

Maybank recommends investing in PTTEP (target price ฿150.0/share, +฿8.00 from upside from Murphy’s project) and speculate PTTGC (target price ฿83.00, low PER19 of 8.5x, with positive sentiment from delay of the opening operation of RAPID project in Malaysia. More information in full research this morning.)

 

April Investment Theme
The SET in April should swing in the uptrend channel with a range of 1,630-1,680 points. Recommend investors holding cash not less than 40%. BUY global palys stocks like PTTEP and HOLD BEM and BJC.

Big Issue
IMF cuts global growth outlook from 3.5% to 3.3%.

 

Stock Pick & Trading Idea
The property stocks prices gained 4.2% YTD with AP, ORI, GOLD, ANAN, LPN and SPALI gained more than 13-30%. LH remains the sector’s laggard as Maybank believes it is one of the property companies with well risk diversified, in terms of segment and sector. It also has limited impact from the new LTV measures, low D/E, dividend of no less than 7%. It has a chance to record extra gain from assets sales in the end of the year. TRADING BUY with a target price of ฿11.40/share.

 

Technical View
Swings in 1655-1675 range, speculate for a short term: The index moves sideways in a narrow range driven by strong buying pressure on transport, property and conmat sectors. Selling pressure was seen on banking and retail sectors. As a result, the index remains moving around the EMA200Day line at 1655. In the near term, it is moving in a range of 1655-1675. So if it weakens and dips below 1655 or gains to test the neckline 1675, take profit and wait to buy back again.

 

Investment Strategy
1) Investors with stocks, let profit runs until it reaches resistance 1675. If it fails to breakout, gradually take profit for a short term. But if it dips below 1655, lock profit.
2) Without stocks, gradually buy stocks if weakens intraday to support 1655 for a rebound trading at 1665, 1675.

 

Maybank sets a support line at 1640 points and 1655 points, while setting a resistance line at  1665 points and 1675 points.

 

Keep an Eye on
1) OPEC meeting Apr 17-18.
2) China reports GDP growth.
3) The Constitutional Court to rule on formula to calculate party-list MP.