Daily Strategy for Investors on July 15 , 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on July 15, 2019, stating that the SET Index on Monday, the regional stock markets are not bright, except the US.

Thai Stock Market Today:
– The performance of the listed companies in 2Q19 is expected to not be impressive due to the fact that (1) expected to record employee benefits expense. (2) Trade War affect to thee export businesses, especially in electronic products, motor vehicles, and banks. (3) AWS expects that energy and petrochemical industry performance will drop because of oil price fluctuations and weal spreads from the huge supply.

– Expects China GDP in 2Q19 will grow only 6.2%, while in 1Q19 grow 6.4%.

– The US stock market is still bright as it was seen from the 4% drop in VIX to hit the low of 12.39 points.

– The minimum wages is preparing to beat THB400, up 25%YoY, affected several businesses, especially the construction services sector, and exporters.

– Today, investment strategy is Selective Buy, focusing on the outstanding storied stocks at a low price.

– AWS Top Pick stock for July are NABLE, SQ, and SSP.

– The SET range is anticipated to be around 1,720-1,740 points with recommending stocks of KKP, SQ, and SSP.

The Stock Comments
KKP        Pick of the day

SQ         (AWS sets the target price at THB5.10)

SSP       (AWS sets the target price at THB11.00)

Pick of the day: KKP (THB71.25; BUY; AWS sets the target price at THB80.00)
AWS has a positive view of KKP’s performance in 2019. AWS expects 2Q19 net profit to be THB1.67billion, increasing 8%YoY, 36%QoQ.
Good profits are expected to be generated from 1. Good growth in revenue in credit business 2. The expectation in better performance from capital market business as the stock market has improved.
Profit from Phatra Securities is expected to increase QoQ and YoY. In addition, financial advisory business is expected to generate revenue from the merger of TMB and TCAP and the merger of GPSC and GLOW which will significantly come in at 2Q19 and 3Q19.
KKP is strong both in the short and medium term from Daily & Weekly Buy Signal. KKP will be able to switch back to the uptrend successfully when it could close at least THB70.50 at monthly market. This is because it will be a new Monthly Buy Signal. KKP has the next target of THB81.00 and THB100.00, respectively with a short-term stop loss point of THB67.50 AWS sets a resistance line at THB71.75, THB72.25 and THB72.75, and support line at THB71.00, THB70.50, and THB70.00)

Foreign Market: US stock market
– Dow was +243.95 points or +0.90%, while S&P500 was +13.86 points or +0.46%, and NASDAQ was +48.10 points or +0.59%, driven by expectations that the Federal Reserve (Fed) will cut interest rate this month and from the disclosure of producer price index (PPI) that indicates that inflation in the US is still at a low level.
Meanwhile, investors will keep an eye on the disclosure of performance of US listed companies which will begin next week.

Commodities:
– Crude oil prices: WTI for August delivery edged up 1 cent to USD60.21/barrel. Brent for delivery in September edged up 20 cents, or 0.3%, to close at USD66.72/barrel due to the ongoing tension in the Middle East which helps driving the market. However, concern on excess crude oil around the world has blocked the rise in oil price.
– Gold price: The COMEX (Commodity Exchange) market for August delivery increased by USD5.50, or 0.39%, to close at USD1,412.20/ounce due to the depreciation of the USD compared to other currencies. This is because investors expect that there is a possibility that the Federal Reserve (Fed) will cut interest rates this month.