Daily Strategy for Investors on June 15, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on June 15, 2020, indicating the essential events in the stock market as follows:

Investment Ideas:

Today’s Investment Overview – AWS expects the SET to move Sideways to Sideways Down due to concerns over the possibility of a second round of COVID-19. Although AWS believes it will not affect the overall Thai investment much, the situation of the increasing numbers in many countries, like China and the U.S., will be a factor to pressure their confidence in the global economy, including oil demand and the risks from Valuation and Financial Preview in 2Q20. Overall, AWS expects the performance to drop on YoY and QoQ. On the fundamentals, stocks that benefit from easing the phase 4 lockdown measures are still prominent. Meanwhile, interesting international issues that need to keep an eye on are the Fed President’s statement to the Senate (16 June) and the House of Representatives (17 June). Local factors should follow the announcement of the list of stocks in and out SET50/SET100 from the Stock Exchange of Thailand.

 

The stock market will announce the name of stock in and out of SET50/SET100 next week – AWS expects KKP and TTW will be in the SET50, while DELTA and BANPU will be out. Also, ACE, DOHOME, RBF, WHAUP and SISB might be in the SET100 and DELTA MBK, PSL, THG and THAI may be out.

 

Phase 4 relaxation starting 15 June – There are easing of 3 business activities in the red group category with a high risk of the spread of COVID-19. In addition, the curfew is cancelled, but it still controls measures to enter the country, including land, water and air. AWS sees it might not post positive much for the market as the share price has responded to positive factors from a gradual easing of measures in the past 6 weeks. However, AWS chooses stocks that benefit but is laggard which are BTS, BEM, VGI, PLANB, IMPACT and SISB.

 

Concerns about the second wave of pandemic pressured the overall investment – The situation in foreign countries began to be worried after the Chinese government ordered a lockdown in Beijing immediately after the number of people infected 54 people in one day, in Beijing 45 people. Even though the numbers are not very high, Beijing has not found an infection for more than 55 days, which is considered one of the cities that has good control measures. While the U.S. has reported an average of 22,000 people infected a day in the past month, particularly the number of new infected people increasing in Arizona, South Carolina, and Texas after beginning to relax the lockdown measures.

 

Issues to monitor this week – The half-year statement of the Fed regarding monetary policy and economic conditions to the Senate Banking Commission (16 June) and the Council of Financial Services Commission (17 June). Normally, issues that should be followed are indicating economic conditions, inflation, U.S. interest rate direction, and the impact of the COVID-19 on the U.S. economy. AWS believes that this should not be different from the recent FOMC meeting, especially the Fed’s attitude to use all the available tools to stimulate the labor market to return to normal.

 

Technical View – AWS expects the SET index this week to move within the range of 1,340 – 1,440 points. AWS expects the SET index today to be at 1,362 – 1,406 points (with support at 1,375, 1,362, and 1,342 points and resistance at 1,394, 1,406 and 1,427 points. The recommended stocks are COM7, TKN, CBG, PTTEP, and MINT.

 

Theme Investment   

1) Accelerate the disbursement of government investment budget- CK, STEC, SEAFCO, PYLON, and TASCO

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, CPALL, DIF, and HMPRO

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