Daily Strategy for Investors on July 10, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on July 10, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview Today, SET Index today still has a chance to fluctuate due to the uncertainty about the domestic political factors and the foreign COVID-19 situation that are returning to pressure the investment overview. The market is in a period of risk from valuation, which there is still a limited upside of the market. If there are no new positive factors, the SET is difficult to pass 1,400 points in the short-term. Next week, the financial results of the domestic banking sector are gradually announced and listed companies in Europe and the U.S. which is expected to decrease as the impact of COVID-19 is a factor that pressures the market for the remainder of July. AWS adjusted the investment theme to suit the current situation which are defensive stocks and dividend play.   

 

The situation of COVID-19 is back to pressure the investment overview again – Report from Worldometer yesterday (9 July) saw an increase of 217,996 infected people and an increase of 5,246 deaths, especially in the U.S. that still has the number of people infected and death accounting for one-fourth of the total worldwide. These factors make both the European stock market (Stoxx600), the U.S. stock market (Dow Jones), and crude oil contracts decrease due to concerns over the situation of COVID-19 that may lead to the use of new measures to lock down the city which will affect the overall economy and the demand for crude oil.      

 

The crude oil prices are still fluctuating due to the weak fundamentals – the uncertainty of COVID-19 situation is a factor which puts pressure on the global economic recovery including the demand for crude oil in the future. AWS remains the same view on oil prices which believe that the fundamentals are still weak due to the lack of clear signs of oil demand, including with the high level of crude oil reserves. Lastly, the EIA’s report states that crude oil reserves have increased by 5.7 million barrels (ending 3 July). Besides, the issues which must follow are JMMC (15 July) meeting of the Capacity Reduction Committee of The OPEC + (15 July) that is an important discussion about capacity reduction agreements which is scheduled to end July 2020.

 

The U.S. labor statistics is not strong – Latest, the U.S. Department of Labor revealed the number of jobless applicants for the first time at 1.314 million last week. Even though it was slightly lower than the analysts had expected, the number of first jobless applicants was still more than 1 million for the 15th consecutive week, although the U.S. began to gradually ease the lockdown measures.

 

Next week, following the meeting of 2 major central banks which are BOJ and ECB – the interesting issues next week is The Bank of Japan (BOJ) meeting on 15 July, the interesting issues are the economic report of the Bank of Japan, and the European Central Bank (ECB) meeting on 16 July, the interesting issue is the interest rate policy (Consensus estimates that interest rates will remain at 0%), including the ECB’s monetary policy statement.

 

Technical View – Today, AWS expects the SET Index to move in a range of 1,359 – 1,377 points (support at 1,359 1,353 and 1,347 points and resistance at 1,371 1,377 and 1,384 points). The recommended stocks are BDMS, CBG, TQM, TASCO and RS.

 

Theme Investment

1)The stock which obtains the benefit from economic stimulus measures, the economic stimulus measure in the 1st phase – CPALL, HMPRO, BJC, OSP, CBG, TTW and MTC, the tourist stimulus measures – AOT, AAV, ERW and MINT, the government budgeting measures – CK, BEM, STEC, SEAFCO, PYLON and TASCO

2)Stocks that benefit from entering the rainy season – BCPG, BGRIM, CKP, GPSC and EASTW

3)Dividend Play – KKP, TISCO, QH, LH, ORI, NOBLE, DIF, INTUCH, HANA, EASTW, TTW, EGCO and RATCH

4)Long-term cumulative shares (DCA) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and HMPRO