Daily Strategy for Investors on October 22, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on October 22, 2020, indicating the essential events in the stock market as follows: 

 

Investment Ideas:

The overall investment today – AWS expects the SET Index today (22 Oct) to remain volatile and risk a downward adjustment from the pressures of both domestic factors and foreign factors, especially the issue of U.S. economic stimulus measures which still cannot reach an agreement, pressuring on confidence on the economic recovery. This was reflected in the declining crude oil price. For investment strategy, AWS still recommends reducing your investment portfolio to reduce the risk of stock market volatility. 

AWS recommends investing only in stocks with positive factors such as expected 3Q20 earnings growth stocks, namely BEM, TU, CPF, HANA, KCE, ICHI, WICE, and SAPPE / stocks that benefit from lower crude oil prices and stocks that benefit from government stimulus measures according to AWS core investment.

 

The latest decline in crude prices due to (1) the U.S. crude reserves that fell less than expected, the U.S. Energy Information Administration (EIA) reported 1 million barrel drop in the U.S. crude oil reserves (expected to drop1.9 million barrels expected) last week (ending 16 Oct) (2) Russian has no review plan on production cuts. Even now, the negative factors from the oversupply problem have again put pressure on the price of crude oil (3) there is still uncertainty, as a result, the estimates of crude oil demand remain downside after several European countries resume lockdown measures. 

While the U.S. economic stimulus measures are still lagging longer than expected. These factors are negative for stocks in the upstream energy sector, stocks in the Refining and Petrochemical Business Sector, but it will be positive for the subcontractors such as CK, ITD, STEC and UNIQ, construction materials group, including SCC, TOA and TASCO, the SPP power plant group such as GULF BGRIM and GPSC that benefit from lower production cost faster than revenue (Ft revenue) and those whose costs come from crude oil such as EPG, OSP and BJC.

 

Technical View – Today, AWS expects the SET Index to move between 1,200-1,233 with the recommended stocks are SONIC, ALT, HANA, TMT and CHG

 

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