Daily Strategy for Investors on May 20, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on May 20, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment overview today – AWS expects the market to have a chance to rest after rising more than 23.4 points (+1.82%) yesterday. The market is still waiting for new positive factors to support investment. AWS expects the SET to move in a side-way up pattern with positive factors supporting the market from rising crude oil prices. However, the share price in the energy and petrochemical sectors are close to fully valued such as TOP, PTTGC, and PTTEP. AWS recommend to gradually sell some profit and choose to invest in stocks with high upside such as BCP (Upside 17.9%), SPRC (Upside 19.7%), and IRPC (Upside 10.3%) and positive sentiments to the COVID-19 situation in a well-controlled country.

 

The Fed president believes the emergency loan project might not be delayed -However, the Fed has not showed a clear timeframe of an emergency loan progress but they has no worries about the expansion of the Fed’s debts. Meanwhile, the Ministry of Finance still has positive view on the recovery of U.S. economic that will occur in 2H20 but it still have a negative view on the 2Q20. The emergency loan program for the U.S. business sector that opened since 23 March causes the Congress to worry that the project might be delayed. To note that, the project will offer a 4-year loan to companies with no more than 15,000 employees and annual incomes of not more than USD5bn per year.

 

U.S. economic numbers; there is still a picture of declining purchasing power – For U.S. economic data that recently disclosed by the Ministry of Commerce, the number of housing starts dropped by 30.2% in April to 891,000 units (March 2020 stood at 1.276 million units), while the number of house construction permits dropped by 20.8% to 1.074 million units in April.

 

Crude oil prices continue to increase – Concerns over oversupply began to decline after Baker Hughes reported that the number of oil and gas rigs in the U.S. was at 339, down 35 in the past week.

 

Domestic issues to watch – The MPC meeting today (20 May), AWS’s analysts estimate that the BoT is likely to maintain the policy interest rate unchanged at 0.75%, including the same FY2020 GDP forecast reported by BoT at the negative level of 5.3%.

      

Technical View – AWS expects the SET index to move today in a range of 1,298 – 1,324 points (with support at 1,304 1,298 and 1,291 points and resistance at 1,317, 1,324 and 1,330 points). The recommended stocks today are KKP, TQM, GPSC, SCC, and AMATA. (Please follow details in Technical Express)

 

Theme Investment

1)Stocks which obtain the benefit from relaxing lock down phase 2 – AWC, CRC, CPN, BTS, BEM, HMPRO, GLOBAL, DOHOME, M, AU, and COM7

2)Recovery of crude oil price – PTTEP, PTT, TOP, BCP, SPRC, and PTTGC

3)Stocks that benefit from entering rainy season – BCPG, BGRIM, CKP, GPSC, and EASTW

4)Stocks that benefit from government measure – ADVANC, BTS, BEM, CPF, CPALL, BJC, CRC, CPN, PLANB, HMPRO, OSP, and CBG

5)Long-term cumulative shares (DCA) – ADVANC, AOT, BDMS, BEM, and DIF

6)SSFx target stocks – PTT, PTTEP, BJC, CPALL, AOT, GULF, EGCO, INTUCH, ADVANC, BAM, and BDMS