Daily Strategy for Investors on June 19, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on June 19, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview Today – The SET index still has a chance to fluctuate from the risk of the COVID-19 pandemic in foreign countries, while AWS is starting to see increased foreign investor sales in the SET index, reflecting the slowing Foreign Fund Inflow and the resume of Thai baht depreciation during last week. Moreover, the measures of the Bank of Thailand to help customers (credit cards and personal loans) pressure on the overall image of the banking sector, both bank and non-bank. Investment strategy during the market is highly volatile, AWS still chooses to invest in defensive stocks in DCA and SSFx of theme investment and those with positive factors, especially for BTS, BEM, and CPALL.

 

Crude oil prices recovered, AWS sees it as only a short-term – Crude oil prices adjusted, partly due to positive response to the IEA report, which has revised demand for crude oil in 2020 to 91.7 million barrels per day, including the crude oil supply in May which decreased by 12 million barrels per day according to the resolution to reduce production capacity of OPEC+. However, the uncertainty of the COVID-19 situation still pressures the economic recovery, including the demand for oil, while stock prices in the energy and petrochemical sectors increased to be fully valued and exceed the target price. However, the recovery of oil prices in the short-term makes us choose to invest in short-term speculation, only stocks with upside such as BCP, SPRC, and PTTGC.

 

The COVID-19 situation has resumed to impact international trade – Most recently, China suspended importing pork from the Toennies Group (a leading company in the German meat industry) after meeting up 657 COVID-19 infected workers. Previously, the market began to outweigh the risk of the return of the COVID-19 round 2, especially in China. Meanwhile, there are still more people infected in the U.S., especially California and Texas, which are the two most populous states in the U.S. after easing the lockdown measures, including the number of new cases in Beijing, China, resulting in the government sector to have travel control measures again. However, the latest WHO report believes that about 200 million doses of COVID-19 vaccines will be produced by the end of 2020.

 

The IMF is preparing to reveal an economic report on 24 June – The spokesman for the International Monetary Fund (IMF) said that the IMF will release the World Economic Outlook (WEO), which will provide detailed economic statistics for various countries. The April report said that the U.S. economy in 2020 will be negative by 5.9% and will return to grow by 4.7% in 2020, as the Chinese economy that is expected to grow by 1.2% in 2020 and expand at the rate of 9.2% in 2021. AWS expects that there will be no change.

 

Important economic statistics for the U.S. – The Conference Board revealed the Leading Economic Index (LEI) increased by 2.8% to 99.8 in May after falling 7.5% and 6.1% in March and April, respectively, which was the largest decrease in the 60 years that the numbers have been reported. Besides, the Federal Reserve (Fed) of Philadelphia Branch revealed the Business Conditions Index in the Mid-Atlantic region rose to 27.5 points in June compared with -43.1 in May (-56.6 in April) due to the impact of the COVID-19.

 

Technical View – Today, AWS expects the SET Index to move in a range of 1,362 – 1,388 points (support at 1,370 1,362 and 1,351 points and resistance at 1,380 1,388 and 1,400 points). The recommended stocks are BCP, SGP, GFPT, PTTGC and SPRC.

 

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