Daily Strategy for Investors on June 8 , 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on June 8, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview Today – The SET has resumed with more confidence from (1) the economic recovery in May, (2) a rise in crude oil prices from the recovery of global demand, thanks to the easing lockdown measures, (3) the continued strengthening of the baht, and (4) foreign fund inflows that continue to flow into the Thai and regional markets. By the first week of June, foreigners returned to net purchases of Bt6bn.

 

There is still a risk waiting – The risks to the investment overview are (1) the conflict between the U.S. and China, from the case of Hong Kong and international trade, and (2) the valuation of the increased market. However, the risk of valuation will be alleviated due to the possibility of the revised FY2020-2021 projections after the COVID-19 situation that resolved faster than expected.

 

The U.S. labor market was better-than-expected – The U.S. Department of Labor reported nonfarm payrolls increased by 2.5 million positions in May (better than analysts expected to decrease by 8.3 million positions), and (2) unemployment rate dropped to 13.3% in May (better than analysts expected to increase by 19.5%). Increased employment and better than expected results in May were due to measures from the U.S. government which began easing the lockdown measures, resulting in the business sector resuming operations and make a new employment, reflecting the overall U.S. economy passed the lowest point.

 

The OPEC+ resolution was positive, but beware of short-term profit taking – The OPEC+ meetings have good conclusions, but lower than the market expected. The OPEC+ meeting has resolved to reduce the production capacity at the rate of 9.7 million barrels per day for another 1 month, previously ending June to July (the market expects to expand for 3 – 6 months) and will reduce production at the rate of 7.7 million barrels per day until the end of 2020. / Investment strategy: AWS believes that there may be short-term sell on fact while the mediumterm (3 months), AWS believes crude oil prices are still rising due to the recovery in demand and reduced production capacity. Crude oil prices recovered faster than expected, causing AWS to increase the FY2020 crude oil price assumption to USD36 per barrel (Dubai 2020YTD crude oil price is USD41 per barrel).

 

Interesting issues in this week (8 – 12 June) – The stimulus measures for the tourism sector in Thailand and the Federal Reserve meeting (Fed). Interesting issues are the overall economy and the direction of the U.S. interest rate and the situation between the U.S. and China, both in international politics (in the case of Hong Kong) and international trade.

 

Technical View – This week, AWS expects the SET index to move in a range of 1,408 – 1,466 points and for today, AWS expects the SET index to move in a range of 1,413 – 1,460 points (with support at 1,426, 1,413 and 1,391 points and resistance levels at 1,448 1,460 and 1,483 points). The recommended stocks are BJC, SAWAD, PTTEP, INTUCH, and RS.

 

Theme Investment

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

2)Accelerate the disbursement of government investment budget- CK, STEC, SEAFCO, PYLON, and TASCO

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, CPALL, DIF, and HMPRO

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