AWS Expects SET to Move Sideway-Down, Advising to Focus on Global-Play Strategy

Asia Wealth Securities (AWS) expected the SET today to move in a range of 1,560-1,595 points from (1) Inflation concerns (follow the U.S. CPI report on 12 May), the U.S. bond yield recovered from 1.4% to 1.625%. (2) The latest situation of COVID-19 in India has been announced to raise the severity of COVID-19 of Indian species while conducting the Thai vaccination still being delayed and below target; and (3) Selling force in the sell-on-fact manner after earnings results release.

AWS estimated that the risk of inflation will be short-term pressure. The security company also believed that in 2021, the Fed will not change its QE policy and maintain interest rates because rising inflation is only for the short-term (1-3 months) and still does not meet the average annual inflation target that the Fed has set a target of 2%. AWS continued to focus on investing in global play (speculation), a portfolio of 40% (originally 60%).

 

Follow the U.S. Consumer Price Index (CPI) report today (12 May). However, if the CPI increases, the dollar will appreciate and the yield on the U.S. Treasury bonds increased (the latest US Bond Yield rose to 1.625%), as well as concerns about the Fed slowing down the monetary policy easing which may reduce the amount of the bond purchase program under the quantitative easing (QE) to the impact of inflation. AWS estimated that the short-term increase in inflation will be caused by the U.S. Issuing economic stimulus measures with a record maximum limit.

Moreover, commodity prices rose when compared with the same period of the previous year with a low base from the COVID-19 crisis so inflation has a chance to increase during May – June.

However, the main variant of the Fed that there will be a decision to reduce the QE limit or to raise the policy rate which the average annual inflation rate is 2% (CPI is expected to be 2.3%YoY) and the long-term target unemployment rate is 3.5% -4.7% (Apr unemployment rate is: 6.1%)

 

Core Investment

1) For foreigners to hold a property in the country (Short-term trading 2 weeks) – NOBLE, ORI and SC

2) Stocks which benefit from the COVID-19 situation (Short-term trading 2 weeks) – BCH, BDMS, COM7, III, STA and STGT

3) Global Play (Trading within 1-2 weeks) – PTTGC PTTEP TOP SPRC CPF KCE HANA and SAT

4) Stocks which obtained benefit from EV CAR Thailand 2035 (Short-term trading 1-2 months) – BPP, GPSC, BCPG, EA, NEX, CHO and KCE

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

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