Daily Strategy for Investors on February 20, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on February 20, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

1) The Fed released its monetary policy meeting report (28-29 Jan), stating that the US economy had stronger-than-expected and the current monetary policy is appropriate to support the economy for sustainable growth.

2) China will announce a loan prime rate (LPR) today. The market expects to see a 10bps cut to 4.05%. The central bank uses the LPR interest rate as a new determining floating loan rates, which is a measure to help reduce borrowing costs and supporting economic growth.

3) Crude oil prices are recovering from the expectation of cooperation between OPEC and its partners in reducing oil production at the OPEC meeting on 5 – 6 March as previously, the Joint Technical Committee (JTC) of the OPEC suggests the OPEC to cut production by another 600,000 barrels per day to reduce the impact of the spread of the  COVID-19 virus. As a result, the Theme Investment on oil price tends to recover. The Down-side is still interesting.  

4) The Thai Baht this morning stood at Bt31.205 per USD, remained stable for 4 working days.

5) The theme Investment regarding the acceleration of disbursement of government budget are also interesting after the shares in those groups are still stronger than the market. AWS expects that the FY2020 budget act will be able to present to His Majesty next week and disbursement of statements might begin on March 20.

6) PTT announced 4Q19 financial statements today (20 Feb) in the evening. AWS expects the company to have a net profit of Bt17bn, down 15.5%QoQ and down 12.4%YoY, resulting in the FY2019, the company will have a net profit of Bt92.6bn, down 22.6%YoY. For dividends of 2H19, AWS estimates to be at Bt1.10 to provide a total dividend yield of 2.5% (total dividend in 2019 is Bt2.00).

Interesting 4Q19 and 2019 financial statements announcement today: BANPU PTT CBG BCP EGCO and CPF.

Today’s analysis – Company Update: TASCO and AOT / Earnings Preview: ANAN / Earnings Results: CPALL and SC.

AWS expects the SET to be within the range of 1,489 – 1,518 points (with support at 1,497 1,489 and 1,476 points and resistance levels at 1,510 1,518 and 1,532 points).

 

Theme Investment: 

1) The tendency of oil prices to recover, posting low downside. AWS chooses PTTEP (TP Bt147.00) and PTT (TP Bt52.00) 

2) Accelerate disbursement of government budget in 2020. AWS chooses CK (TP Bt22.00), SEAFCO (TP Bt7.30), WHA (TP Bt5.20), and KKP (TP Bt80.00)

3) Government stimulus measure, AWS favours AOT (TP Bt84.00), CPALL (TP Bt94.00), and HMPRO (TP Bt19.00)

4) Global trade has eased and Thai baht depreciates. AWS chooses HANA (TP Bt39.00), TU (TP Bt18.40), and CPF (TP Bt33.00)

5) Interest rates cut. AWS chooses ORI (TP Bt10.00), SPALI (TP Bt20.00), MTC (TP Bt75.00), KKP (TP Bt80.00), and TISCO (TP Bt112.00).