Daily Strategy for Investors on July 24, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on July 24, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview Today – The increased risk of stock market investment reflected from the rising gold price and decreased in the U.S. government bond yields which the risk of pressure still comes from (1) The concern about the global economic recovery which will affect global demand for the crude oil after the number of people infected and deaths from COVID-19 continue to increase. 

(2) The concerns about the international political situation (The U.S. and China) while expectations of a new round of stimulus measures in the U.S. which still have high uncertainty from the conflicts of domestic politics. 

While the positive factors are only internal factors from the COVID-19 situations that are likely to be resolved, and the expectations for a new stimulus after the cabinet adjustment, which still suggests domestic play stocks (CPALL, CRC, HMPRO, BJC, OSP, CBG and TTW), including stocks that have specific positive factors, for example, shares in the hospital group (BDMS and BH) that benefit from easing phase 6 lockdown measures

 

The trend in crude oil prices still has a chance to downgrade – AWS sees that the world’s major producers like Russia began entering into contracts to hedge crude oil price risk which reflects the current confidence in crude oil prices while the former risk factors came from (1) The increase in crude oil reserves which contrary to analysts expected according to the latest EIA report, crude oil reserves last week increased by 4.9 million barrels. (2) The concern about the ongoing COVID-19 situation and (3)The concern about the conflict between the U.S. and China.

 

The international politics must also follow due to it being a risk to pressure the investment. – The U.S. and China have many conflicts, including (1) Trade war (2) Technology leadership conflict (3) The U.S. intervention in Hong Kong in the case of the People’s Republic of China vote through the draft of the National Security Act to be applied to Hong Kong. 

(4) The U.S. allegations that China is the cause of the spread, including the release of the COVID-19 and (5) Latest, the U.S. government ordered to close the Chinese consulate in Houston while the attitude of China is ready to retaliate which may announce a reduction in the number of the  U.S. consulates in Hong Kong.

 

Hope for the U.S. stimulus measures next week – Issues worth following are the new stimulus measures which are expected to have an amount of USD1tn or more than that, but it is still high uncertainty since political conflicts in Congress may affect the issuance of said measures, including a meeting of the U.S. Federal Open Market Committee (FOMC) next week (28-29 July).

 

3 issues to follow in the country – (1) Reporting of the Ministry of Commerce’s Thai exports in June (2) The gradually announcing the earnings results of listed companies and (3) The adjusting the cabinet.

 

Technical View – Today, AWS expects the SET Index to move between 1,358 -1,372 points. (Support at 1,358 1,352 and 1,343 points and resistance at 1,366 1,372 and 1,381 points). The recommended stocks are SAWAD, TPIPP, CPALL, GLOBAL and AEONTS.

 

Theme Investment

1) Benefit from the stimulus package – CPALL, HMPRO, BJC, OSP, CBG, TTW, and MTC (phase 1 stimulus package), AOT, AAV, BA, ERW, and MINT (tourism stimulus package), CK, BEM, STEC, SEAFCO, PYLON, and TASCO (disbursement of government budget)

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