Daily Strategy for Investors on October 16, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on October 16, 2020, indicating the essential events in the stock market as follows: 

 

Investment Ideas:

The overall investment today – AWS expects the SET Index today (16 Oct) to continue to decline after the political situation in the country has not resolved. The negative factors abroad include (1) the lack of progress on Brexit negotiations (2) uncertainty over the issuance of economic stimulus measures (3) the COVID-19 situation in Europe and more severe than expected (4) Weak U.S. economic reports. 

AWS still recommends reducing your investment portfolio to reduce the risk of stock market volatility. AWS recommends investing only in stocks with positive factors, including expected 3Q20 earnings growth stocks, including BEM, TU, CPF, HANA, KCE, ICHI, WICE and SAPPE, and stocks that benefit from government stimulus measures based on AWS investment theme.

 

Crude oil price movement continued to fluctuate due to both positive and negative factors. The positive factors came from a report by the U.S. Energy Information Administration (EIA), indicating that U.S. crude reserves fell 3.8 million barrels last week (ending 9 Oct), more than expected of 2.3 million barrels decline. 

The report is consistent with the U.S. Petroleum Institute (API) report specific to the U.S. oil industry, indicating that U.S. crude was down 5.4 million barrels. 

Finished oil reserves also lower than expected both gasoline reserves and refined oil reserves (Heating oil and diesel fuel) while the price of future WTI crude oil market this morning moved in a positive index, but AWS keep the same view, recommended only speculative stocks in the energy sector (PTT, PTTEP, TOP and PTTGC).

 

The uncertainty in the U.S. economic stimulus package, although the U.S. leader will announce its readiness to raise the limits on the measure above USD1.8tn. to allow the White House to reach an agreement with Democrats.

 

Technical View – Today, AWS expects the SET Index to move between 1,222-1,256 with the recommended stocks are PSL, MTC and MCS.

 

Theme Investment

1) Benefit from a the government measures (Shop Dee Mee Kuen, Kon La Krung and Shop Dee Mee Kuen, Kon La Krung) (Short term trading 1-3 months) – BEM, MINT, WORK, VGI, PLANB, CRC, DCC, BJC, CPALl, JMART, COM7, HMPRO, MAKRO, MTC, KTC, OSP and M

2) Laggard stocks (Short term trading 1 month) – BAM, BDMS, BEM, CPALL, GPSC, MTC and WHA

3) Dividend Play (Middle term investing 6-12 months) – KKP, TISCO, QH, LH, SC, ORI, NOBLE, DIF, INTUCH, HANA, SCCC, EASTW, TTW,

4) Long-term cumulative shares (DCA) (Investing more than 1 year) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and PTT