Daily Strategy for Investors on June 16, 2020

Maybank Kim Eng (Maybank) released an analysis for the trading session on June 16, 2020, indicating the essential events in the stock market as follows:

 

Market Summary

The SET yesterday plunged on mounting fears of a second wave of Covid-19 outbreak in many countries. The SET index closed at 1,341.99 (-40.57 points) with a trading value of THB83b (THB86b the previous day).  

 

Foreign investors net sold Thai shares by THB4.014b. Institutional investors net sold by THB1.241b. There were net Short on SET50 Index Futures by 4,311 contracts.

 

Stock Picks & Trading Idea

SAWAD (TP THB62): SAWAD gains benefit from a low interest rate environment, which is positive to its capital, and reopening of economic activities would help ease concerns over the NPLs to some extent.  

 

Investment Theme

FED set to boost liquidity, easing concerns: The global stock markets in the short term still highly fluctuate. Looking at the Thai bourse, the SET index rose in the first week of June to a new high of 1454 points and corrected the following week to 1341, the same level as the SET closed in May. The factors that cause negative psychology for the market to correct in this round are concerns about the second wave of COVID-19 outbreak in the world’s major countries. This is what we must closely monitor whether each country can control the situation or not. However, the high level of global liquidity remains a supportive factor for the market. Recently, FED announced last night that it will purchase more private corporate bonds, which is considered to help increase the liquidity in the system even more. This is expected to help support Asian stock markets this morning. As for the domestic factors, today, follow-up the Cabinet meeting which is expected to introduce measures to stimulate domestic tourism. This is considered as part of the stimulation of the Thai economy that has been heavily affected by COVID-19.

 

Investment Strategy: Today, the SET is expected to rebound in a range of the support at 1,323 and resistance at 1,380 points. We recommend focus on stocks benefiting from low interest rates. Today’s ATO top pick stocks are “SAWAD, JMT, CK”.

 

Big Issue

1) US Empire Manufacturing was -0.2 points in June, better than market forecast at -29.6 points.

 

Eyes on

1) Domestic tourism promotion measures

2) 16 June: US retail sales (May), US Industrial Production (May), BOJ meeting

3) 17 June: Eurozone CPI (May)

4) 18 June: US weekly jobless claims, BOE meeting

5) 19 June : FTSE rebalancing (market may highly fluctuate at the end of session)

 

Technical View

SET Support : 1323/1300 – Resistance : 1360/1380