Daily Strategy for Investors on January 28, 2021

Asia Wealth Securities (AWS) released an analysis for the trading session on January 28, 2021 indicating the essential events in the stock market as follows: 

 

Investment Ideas:

Today’s investment overview – AWS expects the SET today (28 Jan) to move in the range of 1,486-1,518 points. The market will continue to fluctuate. 

AWS expects the market to show a strong buy-back after the FOMC meeting has eased concerns after the Fed maintains USD120bn per month limit on QE, but the uncertainty of U.S. stimulus package release, including the Fed has not released any additional financial measures to stimulate the economy, causing the market to remain worried about the overall economic recovery. 

In addition, the market lacks new positive factors supporting the recovery, causing us to keep the same investment strategy, introducing taking profit in stocks that are at full value or exceeding fundamental value. 

While new investment rounds, for short-term investors, focus on speculation in stocks with unique positive factors in AWS Core Investment, especially expected strong 4Q20 performance stocks.

 

Fed maintains interest rates and maintains QE but no new stimulus measures – the Federal Reserve’s Monetary Policy Committee (FOMC) resolution to maintain short-term interest rates at 0.00-0.25% and continue to buy bonds according to Quantitative easing (QE) totaling USD120.0bn per month which the Fed will buy the U.S. government bonds for USD80.0bn per month and buy mortgage-backed mortgage debt (MBS) for USD40.0bn per month. 

While Jorome Powell, President of the Federal Reserve Provide perspective on economic trends which he also expressed concern over the situation of the coronavirus outbreak which affected economic activity across the U.S. and around the world, resulting in a slowdown in economic recovery and employment. 

However, in this meeting, the Fed has not announced any new measures to stimulate the economy causing the market to return to growing concerns, especially during the period of uncertainty about the USD1.9tn stimulus package of President Joe Biden, which has not been approved by Congress.

 

WTI crude oil rose after the U.S. Government’s Energy Information Administration (EIA) reported a 9.9mn barrel decline in U.S. crude oil reserves last week (ended 22 Jan) which dropped lower than the Market Consensus estimate of just 1.7mn barrels. 

Also, the EIA also noted crude reserves at Kuching, Oklahoma, where the U.S. crude futures were down 2.3 mn barrels, while overall U.S. oil production fell 100,000 barrels to 10.9mn barrels per day in the past week. While the EIA’s refined oil reserves indicated a 2.5mn barrel increase in gasoline reserves, while the refined oil reserves (Heating oil and diesel fuel) dropped 800,000 barrels, as the Market Consensus expected.

 

Core Investment

1) Global Play (Trading within 1 month) – PTT, PTTEP, TOP, PTTGC and SCC

2) Green energy stocks (Trading within 3-6 months) – GPSC, EGCO, GULF, BGRIM, BPP, BCPG, EA and ACE

3) Expectations for the vaccine and increased stimulus measures (Trading for 3-6 months) – BBL, KKP, BEM, CPF, TU, M, OSP, CPALL, HMPRO, CRC and CHG

4) Stocks which expected that the performance in 4Q20 will outstand (1-2 months) – SAWAD, GULF, SPALI, ORI, WHA and STA

5) Dividend Play (Middle-term trading 6-12 months) – SC, LH, QH, KKP, TISCO, RATCH, DIF, INTUCH, EASTW and TTW

6) Long term accumulative stocks (DCA) (Long-term trading over 1 year) – AOT, BEM, ADVANC, WHA, LH, CPALL, CPF, BDMS, HMPRO, BBL and KTB