Daily Strategy for Investors on May 13, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on May 13, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview – The SET is expected to stand above 1,300 points due to confidence in the better domestic COVID-19 situation including crude oil prices that have increased strongly as a supporting factor and a better-than-expected 1Q20 earnings announcement which there is no negative surprise. However, AWS believes that the SET index increase may be limited by the valuation of some stocks starting to be limited after the SET has increased by 2 days ago by more than 2.7%, close to the SET closed at the end of April.

 

The 1Q20 earnings announcement is not a negative factor to pressure Thai investment overview – Yesterday (12 April), there was the announcement of the results of many companies which were better-than-expected, especially IVL, which reported no loss in 1Q20, while refineries like BCP reported results as expected and SPRC was in line with the consensus estimates.  

 

Crude oil prices have increased strongly which support investment in the energy sector – AWs outweighs the theme of “recovering crude oil prices” during this 1-2 months. Crude oil prices will still have a positive sentiment from the recovery of demand for crude oil and lower global crude oil production from both the US and Saudi Arabia, which announced lower than scheduled production capacity with the OPEC+ group.

 

EIA lowered its oil demand forecast in 2020 by another 2.9 million barrels – As a result in 2020, EIA expects oil demand to be 92-93 million barrels per day, down  7-8% YoY and it might increase in 2021, which will bring the demand for crude oil back up to 100 million barrels per day nearly to the year 2019 (before the COVID-19 situation).

 

Investment risk factors are concerned about COVID-19’s second round of outbreaks – Even though reports of infection in Thailand are at a very good level compared to many countries in the world, AWS is confident that it will be a good sentiment for investing in the Thai stock market. However, the situation in overseas countries began to worry after the WHO warned that the cancellation of the city lockdown measures that is too fast will increase the number of people infected with COVID-19 again. Previously, many countries, including China, Germany and South Korea, the number of people infected with the second round increased after easing the city lockdown measures.

 

Technical View – AWS expects the SET index to move today in a range of 1,289 – 1,313 points (with support at 1,296 1,289 and 1,278 points and resistance at 1,306, 1,313 and 1,324 points). The recommended stocks today are BCP, STA, KCE, AMATA, and TOP. (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