Daily Strategy for Investors on May 18, 2020

Krungsri Securities (KSS) released an analysis for the trading session on May 18, 2020, indicating the essential events in the stock market as follows:

 

Market Recap

The SET Index moved narrowly and closed 0.4 point higher (+0.03%) at 1,280 in Bt50b turnover. Although oil prices jumped after the US reported a drop in oil inventories and Thailand plans to ease lockdown further, there was heavy selling in PROP, TOURISM and TRANS sectors following disappointing 1Q results. Foreign investors were net sellers of Thai shares at Bt2,651m and bonds at Bt1,606m, and net SHORT TFEX SET50 at 6,790 contracts.  

 

Market Outlook

KSS is neutral-positive on the market today, expecting the SET Index to rise to test 1,290 before pulling back. The SET will be supported by a rally in the ENERG sector and rising oil prices (to above US$30/Barrel) on the back of recovering demand when the world starts to exit from lockdown, as well as OPEC+ agrees to cut oil output. Furthermore, the reopening of shopping malls will support Commerce counters. However, the SET will be pressured by renewed US-China trade tension after the US moved to block global chip supplies to Huawei, and sell-on-fact activity following 1Q results.

 

Investment Strategy: Selective Buy

1) Energy (PTT, PTTEP, TOP, PTTGC, SPRC) – benefit from recovering oil prices after Saudi Arabia agreed to cut oil output further

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

3) Stocks that are expected to report better earnings in 2Q20: CKP, TASCO, EPG