Daily Strategy for Investors on May 5, 2020

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

 

Investment Ideas:

Investment overview today – AWS still has a positive view on SET today, but the trading volume may not be large as it is still in the period of the long holiday. AWS looks at the positive factor from the city lockdown easing measure which is a factor supporting investment overview but must closely monitor the report of the number of new infected people after mitigated measures. Stocks that have recovered and supported the market in April such as PTT, GULF, AWC, CPALL, BEM, and AOT continue to support the market in May, as the share price is still laggard and has a high valuation upside.

 

AWS estimates that Sell in May in 2020 is not as strong as in the past years – The downside limiting factors for SET in May are from (1) global stimulus measures, resulting in very high liquidity in the market. (2) the SSFx funds’ investment is not much. (3) expectations of a short-term recovery of crude oil prices, including closing May delivery oil contracts for US oil funds will make crude oil prices not very volatile as in the past 1 month. (4) measures to relax the city lockdown in May of many countries, including Thailand, are factors to stimulate the economy and investment overview. As a result, the risk of SET is only a matter of valuation, as SET has increased by 15.6% in the past 1 month and increased by 27% from the lowest point in March, causing the market to become more concerned about the limited upside.

 

Resumed crude oil price in the short-term is a factor supporting energy sector – Concerns over the overall short-term supply and demand as a result of the relaxation of the lockdown measures in many cities around the world is an economic stimulus factor and reduces concerns about the expansion of oil demand, while the measure to reduce production capacity in accordance with the resolution of OPEC+ and G20 from 1 May, including reducing the production capacity of independent oil producers in the US which faster than expected will be a factor to reduce worries about global crude oil reserves.  

 

Today, following the important economic data – The US will have a trade balance report in March which the consensus estimates will be loss USD38.0bn (February loss of USD40.0bn) / UK PMI sector report which the consensus is estimated at 44 points (March is 39.3 points) / Thailand, Consumer Price Index (Core CPI) in April which the consensus is expected to grow 0.5% (March growth 0.54%).

 

Technical view – AWS estimates the SET frame this week (5-8 May) at 1,273 – 1,330 points. AWS expects the SET index to move today in a range of 1,291 – 1,313 points (with support at 1,299 1,296 and 1,291 points and has resistance at 1,304, 1,307 and 1,313 points). The recommended stocks today are STA, SPRC, PTT, PSH, and TU. (Please follow details in Technical Express)  

 

Theme Investment

1) Domestic airlines return to operate on 1 May – AOT, AAV, BA,  and BAFS

2) Low crude oil prices – TASCO, EPG, GPSC, BGRIM, GULF, OSP, CPALL, and BJC

3) Easing lockdown measures – ADVANC, BTS, BEM, CPF, CPALL, BJC, CRC, CPN, PLANB, HMPRO, OSP and CBG

4) Limited downside, the company has strong cash flow – BGRIM, EGCO, GULF, GPSC, and RATCH  

5) Long-term cumulative shares (DCA) – ADVANC, AOT, BDMS, BEM, and DIF

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