Daily Strategy for Investors on September 13, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on September 13, 2019, pointing out some of the must-know events in the equity market as follows:

 

Thai Stock Market Today

1) ECB cut the interest rate on commercial bank deposited with the ECB by 0.10% and announced to retrieve the bond-buying project according to an easing QE measure in November. The ECB will buy bond worth EUR20.0bn /month with no project deadline.

2) Trade situation between the US and China gives a short-term positive signal after President Donald Trump announced to delay tariff hike on imported goods from China worth USD250bn from 1 October to 15 October 2019, while the Chinese government announced the list of 16 US products to be exempted from import tariff. The effective date will be postponed for 1 year until 16 September 2020.

3) NOBLE (AWS TP Bt26.50) announced an interim dividend of Bt5.20 which was more than expected. It will be XD on 25 September 2019 and is a positive factor driving the share price up.

 

Investment Ideas:

1) It is rather difficult for the stock market to stand at 1,680 points.

2) Foreign investors returned to perform a net sell yesterday at Bt1bn, while net purchase TYD by foreign investors was left only Bt1.6bn. For domestic institutions, a net purchase was only Bt37bn.

3) Stocks that may shift out of the SET50 is KKP and is expected to be replaced by AWC.

4) Stocks that may be cut out from the SET100 are BEAUTY, ANAN and PSL, while we expect they will be replaced by promising stocks like ILM (Bt11bn) and DOHOME (Bt18bn).

5) Today’s index range is expected to be 1,645-1,670 points. Recommended stocks are TCAP, AMATA and XO

 

Stock & Comment

TCAP – TP ฿61.00/share

AMATA – TP ฿29.00/share

XO – TP ฿6.50/share (short trading not exceeding the target price.)

 

Pick of the day: TCAP (BUY; AWS TP Bt61.00)

1) Wait to receive a special interim dividend of Bt4.00 per share resulting in the 2019 TCAP dividend rate of 11.6%

2) Expected the 2H19 performance to continue growing driven by an additional release of loan especially hire purchase market which accounts for 57% of the company’s total loan portfolio. We estimate total loan growth at 5%, while expenses are expected to remain stable at a low level. We expect the cost of provisioning to revise down in line with better bad debt quality management.

3) After the merge of TMB and TBANK, TCAP is expected to benefit from the synergy of the merge of 2 banks. It is expected that the new bank will have a loan growth of 126% by TCAP will hold approximately 20% of the new bank. A bigger business of TMB+TBANK will result in the greater performance of TACP and bigger market cap.

4) TCAP is still the uptrend from Daily and Monthly Buy Signal. If TCAP can close above Bt56.50 today which is considered as a weekly market closure, it will enable TCAP to resume a new Weekly Buy Signal and allow TCAP to return to a full uptrend once again. When considering TCAP, a primary target is at Bt63.75. The short-term stop-loss point for TCAP is at Bt55.50 (Resistance: 56.50, 57.00, 57.75; Support: 55.75, 55.25, 54.50).