Daily Strategy for Investors on July 7, 2020

Maybank Kim Eng (Maybank) released an analysis for the trading session on July 7, 2020, indicating the essential events in the stock market as follows:

 

Market Summary

1) The SET  on Friday moved sideways due to lacking of new catalysts to drive the market. The SET index closed at 1,372.27 (-1.86 points) with a trading value of THB71b (THB84b the previous day).  

2) Foreign investors net bought Thai shares by THB384m. Institutional investors net bought by THB1.788b. There were net Short on SET50 Index Futures by 7,124 contracts.

 

Stock Picks & Trading Idea

PTTGC (TP THB57): Benefiting from global economic recovery, reflected by accelerating economic activities worldwide, combined with crude oil supply that OPEC+ manages to maintain at a balanced level, positive to global crude oil prices while petrochemical prices increase.  

 

Investment Theme

Economic recovery encourages more investment: In the near-term, risky assets still have a positive hope for a global economic recovery. This is in line with the recent economic data such as the manufacturing sector in China, the Eurozone including the United States that increased greater than expected. And the latest numbers in the US service sector found that the service sector’s ISM in June rose to 57.1 points from 45.4 the previous month. This figure is better than the market expected at 50.2 points, which is an indicator of the positive development of the US economy even more. These are an additional factors that drive investment in the risky asset market and are expected to have a positive impact on the Thai and Asian stock markets today. For the right investment strategy, Maybank recommend investors to gradually accumulate stocks that have a positive development on business performance, including prominent stories to drive additional investment. The interesting stocks are PTTGC, PTT, PTG, ESSO, STGT, AP, SPALI, KCE, CKP, TU etc.

 

Investment Strategy 

Today, the SET is expected to move upwards in a range of the support at 1,360 and resistance at 1,400 points. Focus on stocks with strong fundamental and good story. Today’s ATO top pick stocks are “PTTGC, AP, STGT”.

 

Big Issue  

June US ISM non-manufacturing index 57.1, up from 45.4 in May vs 50.2 expected.

 

Eyes on

8 July: US weekly crude oil inventories

9 July: China CPI index (June), US weekly unemployment claims

10 July: US PPI index (June)

Eyes on Covid-19 situation

 

Technical View

SET      Support : 1365/1350      Resistance : 1380/1400