Asia Stocks Edge Higher amid Fed’s Maintaining Rates and Upgrading GDP Forecast

Stocks in Asia traded mostly higher on Thursday after the Fed voted to maintain policy rates near zero and expected no hikes through 2023.

 

As of 9:23 local time in Thailand on Thursday, Nikkei rose 1.54%, SSEC increased 0.52%, HSI hiked 1.53%, Kospi advanced 1.37%. Meanwhile, ASX 200 slipped 0.30%.

Last night, Wall Street closed higher as investors digested the prospect of a brighter economic outlook in 2021 from the Fed. Dow Jones closed 0.58% higher, while S&P 500 and Nasdaq rose 0.29% and 0.40%, respectively.

Yesterday, SET Index closed at 1,568.28 points, increased 4.25 points or 0.27% with a trading value of 86.4 billion baht.

 

The U.S. Federal Reserve’s committee, last night, voted to keep interest rates at 0-0.25%, in line with economist forecasts. Meanwhile, the central bank revised up the inflation rate to 2.4% in 2021, higher than the previous expectation of 1.8%.

As the U.S. economy started to recover from the vaccine rollout and the returning of economic activities, the Fed upgraded real gross domestic product to 6.5% this year, compared to the 4.2% estimation late last year. The committee also increased 2022 GDP forecast to 3.3% from the previous forecast of 3.2% as well.

 

Asia Wealth Securities (AWS) expected the SET today to move in a range of 1,548-1,578 points and show strong buying back according to the results of the FOMC meeting, there were no negative signs.

The stock market reflected negative factors from bond yield increases, inflation concerns and the COVID-19 situation, pressured overall investment at the end of last week continued to the beginning of this week. However, the market outlook for the rest of the week to next week will continue to fluctuate from (1) FTSE Rebalance, which has reduced the weight of Thai stocks from 2.3% to 2.25% starting tomorrow (19 Mar). (2) Bond yield still above 1.6% reflects market concerns over inflation (3) Operate vaccination, especially in Europe and (4) Lower crude oil prices.

For investment strategy, in the short-term, AWS recommended only speculation on stocks with specific positive factors While investing in the medium to long term, recommend a gradual accumulation of stocks resulting from the FTSE Rebalance effect with a 50% cash weight in the portfolio. AWS remained wary of risk factors. This will also give the market a chance to fluctuate during the rest of March and April.

 

Core Investment

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

2) Obtained benefit from the decreasing in bond yield (Trading within 3-6 months) – GPSC, EGCO, GULF, BGRIm, BPP, BCPG and ACE

3) Expectations for the vaccine and increased stimulus measures (Trading for 3-6 months) – CPALL, AOT, AAV, ERW, BDMS, CHG, AMATA and WHA.

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

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