Daily Strategy for Investors on August 19, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on August 19, 2019, pointing out some of the must-know events in the equity market as follows:

Thai Stock Market Today:
1) Last week, the cabinet announced the economic stimulation measure of THB 316 billion.

2) 19 Aug, NESDB will announce the 2Q19 GDP. The market expects growth of only 2.5%YoY, resulting in a hope that the 3.5% economic growth this year may be further far away from possibility.

3) 20-21 Aug, there will be an announcement of Thai international trade figures which are expected to not come out brightly, resulting from a heavy appreciation of the baht.

4) Net profit of the listed company in 2Q19 was THB 220 billion, down 16%YoY and 15%QoQ, which was lower than AWS estimate of 4% at THB 230 billion.

5) The “Inverted Yield Curve” situation has lessened after the 10-year US bond yield was up to 1.56%, while the 2-year bond yield was up to 1.49%. This helped investors to lessen their concern on the recession.

6) On 28-30 Aug, there will be Thailand Focus 2019 Fair which is expected to post a positive sentiment to Thai stock market if there is a briefing on the direction of innovation of the industrial sector. There should have newer topics than last year which is based only on the EEC.

7) This week index range is expected to be 1,600-1,650 points. Recommended stocks are WHA, WHAUP, EPG, TASCO, PSL, and ORI.

8) Today index range is expected to be 1,615-1,650 points. Recommended stocks are SPALI, WHA, WHAUP, TASCO, and EPG.

Pick of the day: SPALI closed on 17 August at ฿20.00/share. AWS recommended  “BUY” SPALI share with the AWS target price at ฿24.10/share.
AWS has a positive view of SPALI after BOT has lessened the LTV measure for co-borrowers. It is expected that SPALI will be one of the most beneficiaries in the industry from this issue. AWS expect that this measure will help drive sales at an affordable project or at a price level of less than THB 3 million. The project at that price level of SPALI is approximately 36% of the overall project. In addition,
AWS expects presales and transfers in the 2H19 will stand out more than in the 1H19 from the launch of 21 projects worth over THB 20 billion. In addition, there are projects that will be completed and ready for transfer in the said period of time such as Supalai Veranda Rama 9, which is the THB 4.2 billion project (sold out) coupled with the sale of stock of an existing project. SPALI announced to pay an interim dividend of ฿0.40 per share and XD on 27 Aug 2019.
SPALI still has the main trend in the uptrend from the occurrence of Monthly Buy Signal. However, SPALI remains weak in both short and medium terms from Daily & Weekly Sell Signal with the main target price at ฿26.50/share. AWS sets a resistance line at ฿20.70, ฿20.90, and ฿21.30 while setting a support line at ฿20.40, ฿20.20, and ฿19.80.

Foreign Market:
1) The U.S. stock market: Dow was up 306.62 points or +1.20%, while S&P500 was up 41.08 points or +1.44% and the NASDAQ was up 129.38 points or +1.67%, driven by the 10-year US bond yields climbed up to 1.56%, while the 2-year bond yields revised up to 1.49%. This helped investors to lessen their concerns on the recession. Moreover, investors adjusted themselves with the disclosure of uncertain economic data. Retail sales revised up, while the US consumer confidence fell to 92.1 in August which was the lowest level in seven months.   
2) European stock market: closed up driven bank stocks that surged amid the hope that the German government may issue fiscal stimulus measures.
3) London stock market: closed up driven by Chinese economic stimulus plan and the increased confidence that England will be able to avoid Brexit without any agreement.

Commodities:
1) Crude oil price: WTI for September delivery was up 40 cents, or 0.7%, to close at USD54.87/barrel; Brent for October delivery was up 41 cents, or 0.7%, to close at USD58.64/barrel. The Organization of Petroleum Exporting Countries (OPEC) lowered its global demand for oil this year by 40,000 barrels per day to 1.1 million barrels YoY, while global demand for oil in 2020 is expected to expand by 1.14 million barrels per day as expected last month. OPEC stated that such estimate depends on the downside risk caused by uncertainty in global economic development.
2) Gold price: The COMEX (Commodity Exchange) market for December delivery dropped USD7.60, or 0.5%, to close at USD1,523.60/ounce. The BDI freight index closed on the latest business day at 2,088.00 which was up by 41.00 points or +2.00%.
3) The BDI Freight Index closed on the latest business day at 2,047.00 points which were up by 97.00 points or +4.97%.