Daily Strategy for Investors on August 19, 2020

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

 

Investment Ideas:

Investment Overview Today – AWS expects that today (18 Aug) the SET Index will recover from the economic stimulus measures that became clear and the banking sector that is interesting which is likely to resume dividend payments before the end of 2020, However, foreign risk factors remain to be monitored over concerns about the conflict between the U.S. and China and the COVID-19 situation that is still highly uncertain.

 

The oil prices stabilized while waiting for the oil reserve report and the JMMC meeting of OPEC+ tonight – The issues following the JMMC meeting of OPEC+ which AWS believes nothing will be a new issue to support crude oil prices and a crude oil reserve report from the U.S. Energy Information Administration (EIA), while S&P Global Platts survey expects the U.S. crude reserves to drop 3.8mn barrels from last week (on 14 August)

 

The Ministry of Finance approves the amount of Bt114.1bn to help SMEs further – The Cabinet approves the cabinet resolution review and proposes additional measures to aid SMEs as proposed by the Ministry of Finance which to increase liquidity for SMEs in 3 groups, total credit limit of Bt114.1bn, including (1) The general SMEs through the Government Savings Bank and the Small Industry Credit Guarantee Corporation (TCG) in the amount of Bt87.0bn (2) SMEs travel group with the amount of Bt14.6bn via Government Savings Bank and SME bank and (3) small SMEs and the public through the Government Savings Bank and TCG, the amount of Bt12.5bn. From this point, AWS has a positive view for the consumer group and tourism group so AWS selects AOT, MINT, ERW, CENTEL, CPALL and CRC as a beneficiary of government stimulus measures.

 

The banking sector will return to pay dividends – The BoT is awaiting the results of the stress test in October. However, if considering commercial banks’ capital in 2020 is high, with 2Q20, the capital to risk-weighted assets (BIS) at 19.2%, it is possible for the banking sector to return to pay dividends.

 

The key economic data which scheduled to report today – Japan will report the Trade Balance Report for July (expected to deficit JPY776.0bn), the Exports in July (expected to decline 21.0%YoY) and the Imports in July (expected to decrease 22.8%YoY) / UK will report the Consumer Price Index (CPI) for July (expected to rise 0.7%YoY but down 0.1%MoM) and the core CPI for July (expected to increase 1.3%YoY but down 0.1%MoM), the EU will report the consumer price index (CPI) for July (expected to increase 0.4%YoY but down 0.3%MoM), the core CPI (expected to rise 1.2%YoY, but down 0.2%MoM) and the current account balance in June), and the U.S. will disclose the crude oil Inventories weekly report

 

The U.S. Economic report – The U.S. Department of Commerce reported the homebuilding transaction rose 22.6% to 1.496 million units in July, up from 1.22 million units in June, better than expected, while building permits in July rose 18.8% to 1.495 million units.

 

Technical View – Today, AWS expects the SET Index to move between 1,324 – 1,342 points. (Support at 1,328 1,324 and 1,318 points and resistance at 1,333 1,336 and 1,342 points). The recommended stocks are GLOBAL, CRC, AEONTS, SPALI and BH.

 

Theme Investment

1) Benefit from the stimulus package – CPALL, HMPRO, BJC, OSP, CBG, TTW and MTC (Phase 1 stimulus package), AOT, AAV, BA, ERW and MINT (Tourism stimulus package), CK, BEM, STEC, SEAFCO, PYLON and TASCO (disbursement of government budget)

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

3) Dividend Play – KKP, TISCO, QH, LH, ORI, NOBLE, DIF, INTUCH, HANA, EASTW, TTW, EGCO and RATCH

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