Daily Strategy for Investors on May 8, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on May 8, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

AWS expects the SET to fluctuate, reflected from the volatile commodities, especially crude oil prices. However, the price of gold increased despite having a positive signal to the overall economic recovery but the recovery is still limited by the expectation that global GDP will hit its lowest point during 2Q20, especially in the US. Nevertheless, AWS believes that the SET reflects the risk of valuation that has been partially limited in the last 2 business days, while strong economic statistics bring the market back. There is hope to see the Chinese economic recovery. AWS strategy for investing is to buy shares with specific positive factors.

 

1) Crude oil prices have increased from global production that has started to decline and the demand has started to recover. – AWS outweighs the theme investment, especially stocks that benefit from the recovery of crude oil prices. AWS chooses PTTEP, PTT, TOP, BCP, SPRC and PTTGC. In the long run, it will be good for KCE, EA, and GGC, but it will be a negative factor for stocks in the transportation sector, such as airlines (AAV, BA, NOK, and THAI) and logistics (WICE and JWC).

2) Stocks that benefit from seasonal factors will be the dominant theme in the next phase – AWS believes that through the middle of May, it will be the end of the summer and enter into the rainy season. AWS starts to look back at the electricity stocks with Underperform during 1Q20, but 2Q20 earnings are expected to recover from the rainy season. AWS chooses BCPG, BGRIM, CKP, and GPSC as well as EASTW.

3) Economic statistics show good signs – The Chinese General Administration of Customs (GAC) reported April exports up by 3.5%YoY, while Chinese factories were now resuming operations. In the US, the initial jobless claims last week increased at a reduced rate of 3.2 million people, resulting in the cumulative over the past 6 weeks to 33 million people, accounting for 20% of the total, lower than previously expected.

4) The COVID-19 crisis began offset by positive factors after Japan prepares to approve the use of Favipiravir and Avigan in patients with severe symptoms, regarded as the second country after the US.

     

Technical view – AWS expects the SET index to move today in a range of 1,248-1,272 points (with support at 1,248 1,238 and 1,223 points and has resistance at 1,262, 1,272 and 1,287 points). The recommended stocks today are DELTA, SUPER, CPALL, KCE, and TOP. (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 – PTTEP, PTT, TOP, BCP, SPRC and PTTGC

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

SET is still volatile according to overseas factors