Daily Strategy for Investors on June 25, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on June 25, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview Today – there are clear negative factors pressuring the investment overview today, especially the risk factor that AWS weighs is the COVID-19 situation, as reflected by the IMF’s WEO report that lowered the world GDP forecast to reflect the greater impact of the COVID-19. About the MPC, it also lowered GDP, but within the framework that AWS and the consensus have assessed. However, the increased risk from COVID-19 in foreign countries is a factor that pressures the commodity market, especially crude oil price which decreased from the report of increased reserves and concerns about the recovery of oil demand for the rest of 2020.

 

IMF expects world GDP in 2020 to be more negative and warn the world over fiscal discipline – The World Economic Report (WEO) yesterday (24 June) revealed that the IMF forecasts that the global economy will be negative 4.9% in 2020, which was lower than the previous estimate (Apr 2020) at negative 3% and also reduce the growth forecast of the world economy in 2021 to 5.4% (formerly 5.8%), reflecting the risk to the overall economy from the COVID-19 situation. In addition, the WEO report also warns that the financial status of each country government will be greatly affected by spending budget to stop the spread of COVID-19.

 

The situation of COVID-19 in foreign countries is still worrying, increasing uncertainty about the return to open Thai airspace – A recent World meters report (24 June) indicated that the number of people infected and the number of deaths is at 9.5 million people and 480,000 respectively. The situation is still worrisome, especially in the U.S. with the number of infected people rising yesterday to nearly 40,000 people. It is possible that the U.S. may consider using the lockdown measures again which will be even more a factor to pressure the recovery of the U.S. economy.

 

BoT revised down the GDP in 2020 to -8.1% – Yesterday, MPC had consensus to maintain the policy interest rate at 0.50% per annum (as expected) which the BoT estimates that the Thai economy in 2020 is likely to contract more than expected due to the impact of COVID-19 is more severe than expected so that the BoT revised down the forecast of Thai economic growth (GDP) in 2020 to -8.1% (previously -5.3%) which is a lowest GDP in the record (Tom Yum Kung crisis in 1997, the Thai economic growth rate was -7.6%)

 

Technical View – Today, AWS expects the SET Index to move in a range of 1,312 – 1,354 points (support at 1,323 1,312 and 1,291 points and resistance at 1,344 1,354 and 1,376 points). The recommended stocks are ORI, QH, BEC, PSH and PSL.

 

Theme Investment

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

2) Stocks that benefit from entering the 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