Daily Strategy for Investors on July 3, 2020

Maybank Kim Eng (Maybank) released an analysis for the trading session on July 3, 2020, indicating the essential events in the stock market as follows:

 

Market Summary

The SET yesterday continued rallying in response to positive expectations on the global economic recovery that continues gradually. The SET index closed at 1,374.13 (+24.69 points) with a trading value of THB84b (THB53b the previous day).  

 

Foreign investors net sold Thai shares by THB614m. Institutional investors net bought by THB6.818b. There were net Long on SET50 Index Futures by 5,612 contracts.

 

Stock Picks & Trading Idea

JMT (Strategically TP THB25): It saw limited impact from COVID-19 in 2Q20 while 3Q20 outlook is forecast to strongly grow, driven by cash collection that is expected to accelerate.

 

Investment Theme

US Labour Sector Expands, Reflecting Better Economy: Yesterday the US reported non-farm payrolls for June with an increase to 4.8 million, accelerating from May that expanded 2.5 million. The number is better than the market expected of 3.2 million. This indicates that the US economic activity is continuing to progress, which is a key factor to help support the recovery of the US economy in the next period. However, what remains to be closely watched is the number of new virus infected Americans in many states which is likely to accelerate. This is considered that the situation is quite difficult to control because the public health prevention is not good enough. But we believe that the US economic activity should continue to move forward alongside with the numbers of virus infected cases. Therefore, in terms of economic picture, the impact is quite limited. And the speculation in the risky asset market should prevail.

 

Investment Strategy: Today, the SET is expected to move upwards in a range of the support at 1,360 and resistance at 1,385 points. Focus on stocks with earnings recovery. Today’s ATO top pick stocks are “JMT, PTTGC, AP”.

 

Big Issue

1) US non-farm jobs gain of 4.8 million in June, beating forecasts of 3.2 million.

2) US unemployment rate fell to 11.1% from 13.3%, beating the forecast of 12.5%.

 

Eyes on

2 July: US trade balance (May), Non-farm employment change (June)  

Eyes on Covid-19 situation

 

Technical View

SET     Support : 1365/1350      Resistance : 1380/1400