Daily Strategy for Investors on May 7, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on May 7, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

1) Thai stock market today still has an opportunity to fluctuate due to negative factors in foreign countries and the risk of valuation with limited upside. However, AWS believes that the decrease in the stock market will not be much. This is due to the repurchase of stocks in the oil and refinery sectors from a positive view of the overall demand in May which is expected to recover and reduce concerns for the overall supply. These factors will be positive for PTTEP, BCP, SPRC, and TOP.

 

2) Foreign factors from world trade and questionable ECB’s QE pressures on investment overview – the latest situation, the German Constitutional Court has decision for the ECB to report on measures to buy assets that the ECB implemented under the Public Sector Purchase Program (PSPP) will not have a negative impact on the economy and finance (within 3 months), including the attitude of the US to start using the measure to increase import duties, pressuring trade with China in a new round.

 

3) Positive views on crude oil prices and short-term GRM – The latest data from the EIA reported that US crude oil volume rose 4.6 million barrels last week which was an increase at a reduced rate and lower than the analysts had expected. AWS has a short-term positive view on crude oil prices from positive supply data as follows: (1) floating storage oil reserves decreased 5.2%WoW which decreased for the first time in 5 weeks. (2) oil rigs in the US decreased 7 weeks continuously. (3) Short-term futures contract fell significantly last month and (4) the US increased its SPR during low crude oil prices while the GRM trend has a chance to recover due to the demand for crude oil that has bottomed out during the March-April period, AWS chooses PTTEP, BCP, SPRC, and TOP.  

 

Key foreign economic numbers – Today, follow the BoE meeting and US economic data on US non-farm payroll number, number of weekly jobless claims and inventory reserves for the wholesale sector in March

      

Technical View – AWS expects the SET index to move today in a range of 1,272 – 1,292 points (with support at 1,276 1,272 and 1,265 points and has resistance at 1,282, 1,285 and 1,292 points). The recommended stocks today are PTTGC, ESSO, CKP, BCP, and AEONTS. (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