Daily Strategy for Investors on August 14, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on August 14, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment Overview Today – AWS believes that today (14 Aug) the SET Index has a chance to rest and sideway movements in a narrow frame after the SET Index has increased two days ago. Investment has to be cautious of short-term profit-taking after the announcement of earnings results, including a negative sentiment to energy stocks after the IEA downgraded its 2020-2021 crude oil demand forecast. 

Next week, follows the U.S.-China trade talks (15 Aug) and the JMMC meeting of OPEC+, which AWS has a negative rather than positive view of both the outcome of the negotiations that there may be no positive surprise. In addition, OPEC+ meeting may not yet be a time to increase the proportion of production cuts.

 

The IEA lowered its 2020 oil demand forecast to reflect highly uncertain fundamentals – AWS maintains its outlook on crude oil demand forecast in 2020-2021 that remains highly uncertain from the impact of COVID-19 affecting aviation businesses worldwide. 

The IEA projected global oil demand at 91.1 million barrels per day (MBD) in 2020, down 0.14 MBD compared to the previous estimate and decreased compared to 2019 by 8.1 MBD, while in 2021, the IEA revised its crude oil demand forecast by 0.24 MBD to 97.1 MBD. 

The issue has to follow is the JMMCis the JMMC meeting of OPEC+ next week, while AWS does not have any expectations of a cut increase this meeting

 

The fifth of the U.S. economic stimulus package may not be concluded in the short term – the terms in the bill to treat businesses which affected by COVID-19 is still a difference and unable to draw which Democrats called for a bill to treat businesses affected by the COVID-19 outbreak must include a post office grant of USD25.0bn and funding for the presidential election that will take place on 3 November. 

Moreover, Democrats also proposed more than USD3.0 trillion in stimulus measures, while the White House wants only USD1.0trillion.

 

The number of first-time applicants for unemployment benefits is lower than 1 million, the first time since March 2020 – The U.S. Department of Labor reported that the number of first-time jobless benefits applications in the past week at 963,000 which below analysts had expected 1.1 million, the number of first-time jobless applications was lower than 1 million for the first time since 21 March, after hitting a record 6.867 million at the end of the March

 

Today’s key economic data- China will release key economic data which are the Industrial Production Index in July (expected to rise 4.7%YoY), the value of fixed assets investment in July (expected to drop 3.3%YoY), the Retail Sales Index in July (expected to increase 0.3% YoY) 

Europe will release important economic data which are GDP for 2Q20 (expected to contract 15.0%YoY and 12.1%QoQ) and Trade Balance in June 

The U.S. will release key economic data which are the Retail Sales Index for July (expected increase 1.3%MoM), the Core Retail Sales index in July (expected to increase 1.3%MoM), the Industrial Production Index (expected to increase 3.0%MoM) and the Manufacturing Production Index in July (expected to increase 5.6%MoM.

 

Technical View – Today, AWS expects the SET Index to move between 1,338 – 1,358 points. (Support at 1,343 1,338 and 1,332 points and resistance at 1,347 1,352 and 1,358 points). The recommended stocks are TMB, IVL, KTB, GFPT and CENTEL

 

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