Daily Strategy for Investors on July 9, 2020

Maybank Kim Eng (Maybank) released an analysis for the trading session on July 9, 2020, indicating the essential events in the stock market as follows:

 

The SET yesterday pulled back due to a shortage of new catalysts to boost the market, leading to a short-term selloff. The SET index closed at 1,362.46 (-10.76 points) with a trading value of THB66b (THB82b the previous day).  

 

Foreign investors net sold Thai shares by THB1.211b. Institutional investors net sold by THB2.285b. There were net Long on SET50 Index Futures by 3,841 contracts.

 

Investment Theme

U.S. crude stockpiles rise unexpectedly, gasoline draws down sharply – EIA: Yesterday, the EIA reported weekly US crude oil stocks showed an increase of +5.6 million barrels. The market is expected to decrease by -3.1 million barrels. However, considering the gasoline stock, it fell -4.8 million barrels, which is better than expected to drop by just -210k barrels. 

 

This indicates that driving in the United States recovered well, which may reflect the continued economic activity of the US although the daily number of virus confirmed cases has accelerated continuously to surpass 60 thousand people per day already. As for Thailand’s situation, it is considered that public health development is still at a very good level. But the point that should be careful is economic data and the SET-listed companies’ earnings  results in 2Q20 which may cause each stock in this period to swing with fluctuations. 

 

Maybank recommends accumulating stocks with good 2Q20 earnings prospects or stocks with outstanding developments in the second half whose return on investment should outperform the market.

 

Investment Strategy: Today, the SET is expected to rebound in a range of the support at 1,350 and resistance at 1,380 points. Focus on stocks with a strong  earnings outlook. Today’s ATO top pick stocks are “JMT, COM7, CBG”.

 

Big Issue

US Crude inventories rose by 5.7 million barrels in the week to July 3, compared with analysts’ expectations for a decrease of 3.1 million barrels.

US Gasoline stocks fell by 4.8 million barrels, compared with analysts’ expectations for a slight decrease of -210k barrels.

 

Eyes on

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 : 1360/1340      Resistance : 1375/1390