Daily Strategy for Investors on May 14, 2020

Krungsri Securities (KSS) released an analysis for the trading session on May 14, 2020, indicating the essential events in the stock market as follows:

 

The SET Index closed 5 points lower (-0.4%) at 1,294 in Bt62b turnover, in-line with regional markets, pressured by concerns over a second outbreak if the lockdown is lifted too soon. SET valuation was tight and could not breach 1,300-point resistance level. There was heavy selling in ENERG, FOOD and COMM sectors. Foreign investors were net sellers of Thai shares at Bt4,029m, net long TFEX SET50 at 3,120 contracts, and bought net Bt6,009m worth of bonds.  

 

Market Outlook

KSS is negative on the market today, expecting the SET Index to test 1,280 – 1,285 support after the Fed’s Powell warned the economic outlook remains “highly uncertain and subject to significant downside risks”. There are also lingering fears of a second wave of infection if the lockdown is lifted too soon. The SET will also be pressured by sell-on-fact activity near the end of 1Q20 results season. However, there might be support as Thailand continues to ease lockdown measures amid reports of zero new Covid-19 infections and deaths.

 

Investment Strategy: Selective Buy

1) Energy (PTT, PTTEP, TOP, PTTGC, SPRC) – Saudi Arabia agreed to cut oil output further

2) Retailers (CRC, CPN, HMPRO, GLOBAL, COM7, DOHOME) – to benefit from continued easing of lockdown measures

3) Stocks added to MSCI Thailand Index: AWC, BAM and KTC (May 29)