Daily Strategy for Investors on June 12, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on June 12, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview Today – Negative external factors pressure  the investment overview further after the number of people infected and the number of deaths in the U.S. did not decrease, causing the market to return to worry about the said situation. The movement of investments in the form of risk off is becoming more apparent by reducing the proportion of risky assets. (Stock market and oil), reflecting the continuous increase in the Vix index, including the rising gold price, although economic statistics that were gradually announced in May began to recover regardless. AWS still has the same view and believes that regional stock markets, including Thai markets, will continue to be a downward direction, especially the rising concerns from foreign factors and high market valuation.

 

Confidence in the economy has decreased due to the number of people infected with non-stop increase in the U.S. – For the latest update of the COVID-19 situation in the U.S., the number of infected people increased 23,225 cases with the total number of people infected of 2,089,626 cases, representing 28% of the total number of people infected worldwide. Meanwhile, the number of deaths increased by 899, with cumulative death of 116,029, representing 27% of the cumulative deaths worldwide. The U.S. stock market last night was reflecting concerns about such a situation, which leads to reduced confidence in the return of economic growth after easing the lockdown measures and the increased risk of the 2nd epidemic.

 

A clear risk off – The latest Vix index has increased by over 48% during  the overnight to 40.79 points, reflecting investor concerns, especially the relaxation of the U.S. lockdown measures during the situation of the COVID-19 that still has an increasing number of people infected. Moreover, the Fed’s GDP forecast for 2020 which is still negative at 6.5% returned to create concerns and less confidence in the overall economy.

 

AWS has not seen any signs of recovery of the crude oil price in the short-term – WTI crude oil prices last night fell by more than 8%. AWS still maintains the same view of the negative factors of unrealistic real demand and supply which will oversupply, while concerns over the overall economy from the unresolved COVID-19 situation will be another fundamental factor that will weaken demand and negatively affect crude oil prices.

 

The U.S. economic data for May recovering – the important information about the U.S. economy disclosed last night which are (1) the number of initial jobless claims as reported by the U.S. Department of Labor last week at 1.54 million, slightly lower than expected and (2) Producer Price Index (PPI) in May rising 0.4%MoM after declining for 3 consecutive months. Also, the U.S. economic data that is still waiting to be announced today are the import and export prices for May and the initial consumer confidence in June from the University of Michigan.   

 

Technical View – Today, AWS expects the SET index to move in a range of  1,365 – 1,417 points (with support at 1,381, 1,365 and 1,344 points and resistance levels at 1,400, 1,417 and 1,437 points). The recommended stocks are SUPER, PSL, DELTA, RS and PRM.

 

Theme Investment

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

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

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

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

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