Daily Strategy for Investors on February 5, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on February 5, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

1) The central bank of China has injected a total of 1.7 trillion yuan to increase liquidity in the system. There is also a possibility that the Chinese central bank will cut loan prime rate (LPR) and will reduce the reserve requirement ratio of financial institutions (RRR) on 20 February.

2) Thai government economic stimulus measures boost the market to recover with 4 tax measures. We are optimistic for the stocks in our theme investment, hotel chains (ERW, MINT, and CENTEL) and aviation related businesses (AOT, BAFS, AAV, and BA).

3) AAV’s share price rose 10.38% yesterday (4 Feb). AWS believes that the firm will benefit the most in the aviation sector due to the reduction of fuel excise taxes. Also, AWS estimates that the earning in 2020 will increase Bt630-120mn. Currently IAA Consensus gives the fair value at Bt3.10/share and forecasts the earning in 2020 at Bt390-700mn (Excluding this positive factor) Technical comment: AAV in the short and medium term (Day and Week) still have buy signal with support at Bt1.94-1.83 per share, resistance at Bt2.10-2.24 per share (Stop Loss at Bt1.80/share)   

AWS suggests avoiding investing in energy stocks (Upstream) after crude oil price fell due to concerns over oil demand in 2020 so it will post negative to PTTEP and PTT.

4) In the case of the Constitutional Court considering the budget for the year 2020, it is expected to take up to 30-45 days for consideration as soon as possible (The maximum delay is 2 months).

Today (5 Feb 20), follow the MPC meeting which the Consensus expects to maintain a policy rate at 1.25%. (If the interest rate cuts, it will benefit non-bank such as MTC, SAWAD, KKP and TISCO.)

 

Theme Investment: 

1) Accelerate the disbursement of the government budget in 2020. AWS chooses CK (TP Bt22.00), SEAFCO (TP Bt7.30), CPALL (TP Bt94.00), KKP (TP Bt80.00) 

2) Government stimulus measures, AOT (TP Bt84.00), CPALL (TP Bt94.00) and HMPRO (TP Bt19.00) 

3) Global trade has eased and Thai baht depreciates. AWS chooses HANA (TP Bt39.00), TU (TP Bt18.40) and CPF (TP Bt33.00) and (4) High dividend yield and defensive stock. We choose KKP (TP Bt80.00) and GPSC (TP Bt97.00).

      

AWS expects the SET will be within the frame of 1,507-1,535 points. (Support: 1,514, 1,507 and 1,500 points/ Resistance: 1,525, 1,530 and 1,535 points)