Daily Strategy for Invstors on June 17, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on June 17, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview Today – AWS expects the SET index to fluctuate, but can be increased continuously in the short-term from positive factors regarding the economic stimulus measures both the U.S. and Thailand, including the recovery of crude oil prices and the progress of the COVID-19 vaccine trial. Meanwhile, the Fed’s outlook on the U.S. economy last night was still in line with the FOMC meeting. Despite the negative view, AWS believes that the stock markets have already known. Risk factors from unrest in the Korean peninsula, AWS believes that it will not affect the overall investment today. AWS estimates today’s market resistance at 1,383 points.

 

The Fed president’s statement was in line with the content of the FOMC meeting – The Fed Chairman announced to the Senate Banking Committee on past monetary policy which views on economic trends and monetary policy to the Senate Banking Committee was still in line with the FOMC meeting statement and the Monetary Policy report last week by assessing that the economy is still highly uncertain and there are still limiting factors for recovery in the future and still need a longer time to recover from this effect. If it is unable to assess when the pandemic will calm down, it is difficult for the economy to fully recover. According to the Fed’s president’s statement, the plan will continue to fully implement monetary policy to achieve the highest employment goals and price stability, including to maintain the working mechanism in the financial market.

 

However, it is still supported by economic stimulus measures – The US government is preparing to propose an investment plan of approximately USD1tn to stimulate the economy further through The FAST Act, which is a law of transportation funding for a period of 5 years worth USD305bn (ending September 2020). The U.S. Department of Transport prepared a draft investment plan for the infrastructure construction projects, including investment in 5G technology networks and rural broadband additionally from the previously announced by the Fed to buy private bonds of USD750bn to increase liquidity in the market and provide loans to large companies affected by COVID-19.

 

The EXAT prepares measures to support the return of international flights in September 2020 – The Expressway Authority of Thailand (EXAT) estimates that in September 2020, airlines will return to provide international flight services after starting to announce the open airspace due to entering the high season of tourism (October 2020 – March 2021). However, for the specified date for the international flight permit, the EXAT is still unable to specify that the government will issue a permit to fly on 1 July 2020 or not, because it depends on the consideration of the Ministry of Public Health and negotiations for matching countries first. The consideration of the opening of an international flight is depending on (1) considering that each country is safe to travel and is it open for Thais to travel and whether or not (2) considers travel groups that are necessary and with minimal risk.

 

Technical View – Today, AWS expects the SET index to move in a range of 1,361 – 1,383 points (support at 1,361 1,355 and 1,347 points and resistance at 1,368 1,375 and 1,383 points). The recommended stocks are TCAP, BCP, PTTEP, GFPT, and PTTGC.

 

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