Daily Strategy for Investors on April 21, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on April 21, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

– Investment Overview – AWS expects the Thai stock market to have a chance to rest after rising by 5.5% in the past 2 days due to strong institutional trading, as well as responding to positive factors in the country, both from the Emergency Decree of Bt1.9tn loans that came out faster than expected and expectations of easing the city lockdown measures, which will be considered within this week. AWS looks at limited valuation will be a factor to pressure the recovery of the SET. Although the negative WTI crude price last night will not have a direct impact on fundamentals in the energy sector, the downtrend of global crude oil prices is still a reflection of the weak fundamentals.

 

1) WTI crude oil price in May delivery was negative. AWS maintains the view. – WTI crude oil price closed at USD-37.6 per barrel which was a contract for the price of crude oil for delivery in May, which will be traded today (21 April) as the last day with a large quantity of oil contract, resulting in sales at all prices before May delivery contract ends today. While crude oil contracts for the next month since June are still moving in the positive territory and still have the characteristics of Contango, which is the price in the long-term contract is higher than the price of the short-term contract. Brent crude oil contract moves within the range of USD25 per barrel and still tends to decrease due to weak fundamentals.

2) Strong fundamental stocks with positive factors to support investment. AWS chooses BEM (BUY, TP Bt11.80) – BEM is requesting the government to remedy the effects of COVID-19. AWS believes that it will receive a good response from the government. Currently, BEM provides full service of the Blue Line Project. In normal conditions, AWS expects that there will be an average of not less than 500,000 passengers per day (Work day). In the event of a dispute with the Expressway Authority, it was recently terminated with the contract to extend the concession to year 2035. For future plans, BEM is ready to bid for the Orange Line, Bang Khun Non – Min Buri (Suwinthawong) section, which will allow the private sector to participate in the construction and operation of the entire line, worth Bt120bn. It is expected that MRTA will open the auction in May 2020, which is a positive factor for BEM in the long-term.

 

– Technical view – AWS expects the SET Index today in the frame of 1,245 – 1,280 points (with support at 1,259, 1,245 and 1,223 points and resistance at 1,280, 1,294 and 1,316 points. The recommended stocks today are GUNKUL, CKP, TPIPP, KKP and BDMS (follow in Technical Analysis).

 

Theme Investment: 

1) Easing lock-down measures. AWS chooses ADVANC, BTS, BEM, CRC, CPN, PLANB, and HMPRO. 

2) Loan Act of Bt1.9tn. AWS chooses KBANK, SCB, KTB, BBL, KTC, and SAWAD. 

3) Stocks that slightly affected by COVID-19, AWS chooses CPF, CPALL, BJC, BAM, ADVANC, and TRUE. 

4) Limited down-side, the company has strong cash flow. AWS chooses BGRIM, EGCO, GULF, GPSC, and RATCH. 

5) Long-term accumulative shares (DCA), AWS selects ADVANC, AOT, BDMS, BEM, and DIF.

6) SSFx target stocks, AWS selects PTT, PTTEP, BJC, CPALL, AOT, GULF, EGCO, INTUCH, ADVANC, BAM, and BDMS .