Daily Strategy for Investors on November 19, 2020

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

 

Investment Ideas:

The overall investment today – AWS expected the SET today (19 Nov) to remain volatile. The market responded to positive short-term factors yesterday after the MPC maintained interest rates as expected, including that the parliament meeting was resolved to accept draft amendments to the 1st and 2nd constitution. 

Despite positive factors from the progress in vaccine development, the market has already responded last week. In addition, domestic protests continued and the MPC prepared to consider measures to look after the baht currency after a 2.6% appreciation in November, it is a limiting factor in the recovery of the SET Index. 

For investment strategy, AWS will continue to recommend taking partial profit to reduce the risk of market fluctuations.

 

The Monetary Policy Committee (MPC) unanimously resolved to maintain the policy rate at 0.50% per annum as expected by the Market Consensus, to support the economic recovery as for the overall picture. 

For the Thai economy in 3Q20, from the MPC’s view, it improved more than expected, but still tends to recover slowly. It is expected that it will take about 2 years before overall economic activity returns to normal levels (before the pandemic) resulting in the labor market has decreased purchasing power from low income which is pressuring private consumption while government spending tends to be lower than estimated. 

In addition, the MPC is concerned about the rapid appreciation of the baht in the past, affecting the economic recovery where fundamentals remain weak and fragile. 

Therefore, it is considered appropriate to closely monitor the exchange rate market and capital flows, including considering the necessity of taking appropriate measures both the short-term and the long-term.

 

The Thai stock market rose 14.78 points (+ 1.09%) yesterday, positive response to the draft amendment to the constitution which the Parliamentary resolutions in considering all 7 draft amendments to the constitution, however, the meeting resolved to accept Principle No. 1 Draft Amendment proposed by the opposition (Establishing a Constituent Assembly, with 200 senators attending all elections to join the draft constitution within 120 days) and the 2nd edition proposed by the government (Establishing a Constituent Assembly, with 200 senators coming to elect 150 people and from different groups of 50 to join the constitutional drafting within 240 days). 

While the draft amendments to the constitution No. 3 to 7, especially the seventh (people sector) which is the issue of protesters (people’s groups), has been eliminated altogether. (Received less than 366 votes and additional conditions must have at least 82 senators) by which the meeting has appointed 45 constitutional amending commissions and it will take 15 days to amend the amendments which the first meeting will begin on 24 Nov and will use the government’s second draft constitutional amendment as the main consideration. 

AWS looked at the political factor, despite the short-term relief from the results of the draft amendments No. 1 and No. 2, the demands of the protesters (No. 7) Continued to make the overall investment face risks from the domestic protests.

 

Pfizer Inc., the largest of the U.S. pharmaceutical company, and German pharmaceutical company BioNTech announced yesterday that Final data analysis indicates that the BNT162b2 vaccine is resistant to COVID-19 which the two companies developed together 95% effective against COVID-19 in 28 days after the first vaccination, the vaccine was effective in all volunteers with a low level of side effects. 

However, AWS looked at the positive factors that will only stimulate the overall short-term investment because the market has been seeing continuous progress over the past 2 weeks.

 

OPEC+ meeting which will hold oil production policy meeting on 30 Nov- 1Dec which market consensus expects that the resolution of the meeting will postpone the plan to increase production capacity of 2 million barrels per day at least three to six months from concerns about the effects of a new round of lockdown measures in Europe to curb the spread of the COVID-19 virus. 

Previously, OPEC + decided to cut output by 7.7 million barrels per day until the end of 2020, before cutting output to 5.8 million bpd from January 2021, which would make Crude oil volume increased by 2 million barrels per day from OPEC + flowing into the world oil market.

 

Technical View – Today, AWS expected the SET Index to move between 1,344-1,380 points. The recommended stocks are BPP, TTA, BA, EA and ERW.

 

Core Investment

1) Global Play (Trading within 1 month) – PTT, SCC, PTTEP, TOP, PTTGC, IVL, CPF and TU

2) Stocks which obtained the benefit from the nearest successful of COVID-19 vaccine (Trading within 1 month) – AOT, AAV, BA, ERW, M, CRC, CENTEL, MINT, WHA and AMATA

3) Dividend Play (Middle-term trading 6-12 months) – SC, LH, QH, KKP, TISCO, RATCH, DIF, INTUCH, EASTW and TTW

4) Long term accumulative stocks (DCA) (Long-term trading over 1 year) – AOT, BEM, ADVANC, WHA, LH, CPALL, CPF, BDMS, HMPRO, BBL and KTB