Daily Strategy for Investors on March 5, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on March 5, 2020, indicating the essential events in the stock market as follows: 

 

Investment Ideas:

1) Dow Jones rose 1,173.45 points (+4.53%), while crude oil price dropped 40 cents (-0.9%) and gold price fell USD1.4 (-0.09%).

2) Fund Flow has been returning with the figure of foreign net buy of Bt1,246mn yesterday. This was a positive signal for the SET.

3) Thai Baht – It is likely to return to appreciate at Bt31.3 per USD this morning, appreciated for 6 consecutive days, while Thai baht in 2020YTD was at Bt30.8 per USD, appreciated from the year 2019 at Bt31.1 per USD.  

AWS anticipates the SET today might be in the range of 1,373 to 1,394 points (with support at 1,373 1,365 and 1,351 points and the resistance at 1,386 1,394 and 1,408 points).

4) The situation of the COVID-19 outbreak outside China is still worrisome and needs to be manipulated closely, especially Italy and US, while the main US economic figures like the PMI service sector in Feb 20 was at 49.4 points, down from Jan 20 at 53.4 points.

5) IMF announces aid measures by approving USD50bn emergency budget to assist member countries affected by the outbreak of the COVID-19 virus, while the IMF estimates that the situation will affect World GDP in 2020 which currently, the IMF expects world GDP in 2020 to be less than 2.9% in 2019. This is a decrease from the previous forecast. (Report Jan 20, IMF expects World GDP to grow by 3.3%)

6) ORI – Although we have lowered our target price to Bt9.00 due to pressure on real estate business which continued from 2019 to early 2020, but the company’s business plan still reduces the risk by expanding the project just horizontally and increase the proportion of Recurring Income, while the existing backlog has helped secure 75% of the transfers, we still recommend “BUY”  

 

Theme Investment: 

1) Accelerate the disbursement of the government budget in 2020. AWS chooses CK (TP Bt22.00), SEAFCO (TP Bt7.30), WHA (TP Bt4.40), and KKP (TP Bt80.00). 

2) Government stimulus measure, AWS favours AOT (TP Bt79.00), CPALL (TP Bt85.00), BEM (TP Bt12.50) and HMPRO (TP Bt19.00). 

3) Global trade has eased and Thai baht depreciates. AWS chooses HANA (TP Bt39.00), TU (TP Bt18.40), and CPF (TP Bt33.00). 

4) Interest rates cut. AWS chooses ORI (TP Bt10.00), SPALI (TP Bt20.00), MTC (TP Bt73.00), KKP (TP Bt80.00), and TISCO (TP Bt112.00).

5) High Dividend, AWS chooses KKP (Div.Yld.8.7%), TISCO (Div.Yld.7.8%), INTUCH (Div.Yld.5.7%) and RATCH (Div.Yld.4.1%).