Daily Strategy for Investors on May 12, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on May 12, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview – AWS sees that the SET Index today (12 May) has a chance to relax after yesterday (11 May) increasing by 21.28 points (+1.68%), especially in selling shares in the energy sector after crude oil prices began to decline and there is a side-way down movement. In foreign markets and commodities prices, it reflected concerns about the fact that many countries were opening the economy too quickly, COVID-19 could be spread again in the second round, while Thailand prepares to propose a second phase of the relief plans, expected to be approved on 15 May, with the number of infected people increasing at a low level per day, which was not anxious, but it still needs to be monitored closely. 

 

Concerns about the fact that many countries have opened up the economy too quickly may cause COVID-19 to return to the second round, especially Japan, England, and New Zealand, may declare the cancellation of emergency and easing the lockdown measures this week, while England proposed plans to open the economy. However, it needs to monitor the number of people infected in the countries started to gradually relax measures that the number of people infected will increase as in China, South Korea and Germany, where the number of people reported increased after the easing measures.

 

AWS recommends short-term speculative trading with an interest from the expectations that the government will announce the relaxation of the city lockdown phase 2 (expected to be considered and approved officially on 15 May 2020). AWS chooses CPALL, CRC, PLANB, HMRPO, GLOBAL, and DOHOME. 

 

The 1Q20 earnings report is not as bad as the market concerned – Despite the declining overall results from the weak economy overview, it was not considered as a negative surprise to the market, especially yesterday. PTT (TP Bt40.00) reported a 1Q20 earnings turnaround to a loss of Bt1.55bn from the recognition of large stock losses in the oil business and in petrochemicals and refining businesses. However, in the fundamentals, AWS still recommends “BUY” as AWS believes that 1Q20 earnings will be the lowest in 2020. 

 

This week, also have to follow up (1) trade negotiations between the US and China (2) the number of people infected with COVID-19 after many countries began to relax the city lockdown measures (3) the new investment weight adjustment of the MSCI Index announcement today (12 May) which are KTC, AWC and TOA, and (4) reporting the performance of listed companies which will be the last week.   

 

Technical View – AWS expects the SET index to move today in a range of 1,279 – 1,302 points (with support at 1,286 1,279 and 1,269 points and resistance at 1,294, 1,302 and 1,311 points). The recommended stocks today are CPF, GPSC, SCC, GULF, and COM7. (Please follow details in Technical Express)

 

Theme Investment

1) Recovery of crude oil price – PTTEP, PTT, TOP, BCP, SPRC and PTTGC 

2) Stocks that benefit from entering rainy season – BCPG,BGRIM, CKP, GPSC and EASTW 

3) Stocks that benefit from government measure – ADVANC, BTS,BEM, CPF, CPALL, BJC, CRC, CPN, PLANB, HMPRO, OSP and CBG 

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

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