Daily Strategy for Investors on July 21, 2020

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

 

Market Summary

1) The SET yesterday moved sideways, driven by selling pressure on banking stocks after weaker than expected 2Q20 earnings results report. The SET index closed at 1,358.29 (-1.29 points) with a trading value of THB52b (THB41b the previous day).  

2) Foreign investors net sold Thai shares by THB266m. Institutional investors net sold by THB888m. There were net Short on SET50 Index Futures by 4,060 contracts.

 

Investment Theme

Vaccine developments progress: Pfizer-BioNTech potential coronavirus vaccine shows promise in additional data. German biotech firm BioNTech and US drugmaker Pfizer reported additional data from their experimental Covid-19 vaccine that showed it was safe and induced an immune response in patients. The companies said the data also demonstrated an induction of a high level of T-cell responses against the novel coronavirus.

 

In addition, AstraZeneca, a British pharmaceutical company, in collaboration with the University of Oxford, also showed reports of vaccines capable of immunizing the COVID-19 virus in the first phase experiment, which is expected to ultimately be used within this year. If it succeeds, this is regarded as good news that the world has been waiting for. Certainly, this will be a positive motivation for investing in risky assets as well. In the short-term, the market is expected to keep an eye on the report of the performance of listed companies. Yesterday, many banks reported lower-than-expected results from high provisions. Therefore, there may be signs of further downward revisions for the banking sector’s estimates. In the short-term, Maybank still recommends waiting for the market to revise projections and let the burning selling pressure cool down first before preparing to set investment strategies for this sector in the next phase.

 

Investment Strategy: Today, the SET is expected to swing upward in a range of the support at 1,340 and resistance at 1,365 points. Focus on stocks with positive catalysts. Today’s ATO top pick stocks are “BAM, PTTGC, DELTA”.

 

Big Issue

A coronavirus vaccine developed by the University of Oxford and AstraZeneca is safe and induces an immune response.

 

Eyes on

SET-listed companies’ 2Q20 earnings results preview and report

22 July: Thailand’s exports (June), Thailand Trade balance (June)

22 July: US existing home sales (June), US weekly crude oil inventories

23 July: US weekly jobless claims  :

      

Technical View

SET      Support : 1350/1343      Resistance : 1365/1380