Daily Strategy for Investors on June 29, 2020

Maybank Kim Eng (Maybank) released an analysis for the trading session on June 29, 2020, indicating the essential events in the stock market as follows:

 

Market Summary

1) The SET on Friday moved sideways. Although there are expectations of economic recovery, in the short-term, there are still negative factors due to the second wave of virus epidemic in the US.  The SET index closed at 1,330.34 (+4.46 points) with a trading value of THB47b (THB60b the previous day).  

2) Foreign investors net sold Thai shares by THB2.551b. Institutional investors net bought by THB2.132b. There were net Long on SET50 Index Futures by 10,395 contracts.

 

Investment Theme

The market keeps a close watch on the second wave of virus outbreak: Over the weekend, the number of COVID-19 confirmed cases around the world skyrocketed to surpass 10 million and deaths worldwide reached 500,000. The top 5 countries with most cases are the United States, Brazil, Russia, India and UK. Currently, there are more than 2.6 million cases in the US and numbers are accelerating significantly in some states, such as Florida, Texas, Arizona, California and Nevada. Consequently, some states began to re-enact strict measures, such as closing the bar, including adding rules for the restaurant business. At this point, it may turn into a short-term negative psychology for investment. However, Maybank believes that the United States will not return to aggressively lockdown as it did during the first outbreak. For Thailand, Maybank believes that the behavior of the Thai people who have looked after themselves greatly better than the US citizens, should not cause the spread in Thailand severe as in the US. So, when the market reflects its concerns and corrects, it presents an opportunity to accumulate stocks with a strong 2Q20 earnings outlook or positive developments in 2H20 earnings. As for domestic issues, keep an eye on the general meeting of the CCSA, where Maybank expects it to consider the renewal of the Emergency Decree, the unlocking of economic activities in Phase 5, as well as additional tourism promotion measures.

 

Investment Strategy: Today, the SET is expected to correct and create a foundation in a range of the support at 1,315 and resistance at 1,340 points. Focus on stocks with positive stories. Today’s ATO top pick stocks are “CK, CBG, SCC”.

 

Big Issue

1) US weekly oil rigs counts decreased 1 rig to 188 rigs, continued drop in 15 weeks consecutively.

 

Eyes on

29 June: CCSA meeting, expecting they consider phase 5 lockdown easing and travel bubble measures.

29 June: US  Pending Home Sales (May)

30 June: China Manufacturing and Services PMI, (June), Eurozone CPI (June), US Consumer Confidence Index (June)

 

Technical View

SET – Support:1325/1307 – Resistance:1340/1350