Daily Strategy for Investors on December 27, 2019

Maybank Kim Eng has made an analysis for the trading session on December 27, 2019, pointing out some of the must-know events in the equity market as follows:

 

The SET yesterday moved sideways with a light trading value. Maybank believes LTF funds helped hold the market ahead of New Year’s Eve. Strong buying pressure was on AOT and GPSC. The market closed at 1,579 (+6.03 points) with a trading value of THB28b (THB21b the previous day).

Foreign investors net sold Thai shares by THB940m. Institutional investors net bought by THB833m. There were net Long on SET50 Index Futures by 2,734 contracts.

 

Stock Picks & Trading Idea

BBL (TP THB225): The share price has priced in concerns about its acquisition of Indonesia’s bank. Maybank believes this investment should help boost operational earnings growth in the midterm. The share price fell to trade at only 0.6x of its book value, coupled with a high dividend of 4.4%, this makes it more attractive to invest in this stock.

 

Investment Theme

Many factors to worry about in 2020: As the end of the year approaches, factors pressuring the market also continue to decline as well as the trading volume that also gradually slows down.

However, if considering early next year, there are still many factors to keep an eye on. Maybank believes the investment sentiment in 1Q20 should recover fueled by positive expectations on progress in trade negotiations where US-China are expected to sign the phase 1 trade deal in January. This should help boost the global economy.

Furthermore, the central banks worldwide keep implementing easing monetary policy through holding the interest rate at a low level, while gradually introducing fiscal policies. This should be a catalyst to drive the economy to recover.

For domestic factors, keep an eye on the 2020 budget act consideration of agenda 2,3, totaling THB3.2t in January. If the bill passes, it will become a catalyst to boost confidence in the investment.

However, what to worry is that the political risk, it is considered a very important issue that may affect investment confidence. Investors should follow up on many issues in January, such as the no-confidence debate (13 Jan), the dissolution of the Future Forward Party (21 Jan).

Today’s SET’s support level is at 1570 and resistance at 1590. Maybank recommends gradually accumulate our top picks for 1Q20 like BEM, BBL, CPN, AOT.

 

Big Issue:
Initial claims for state unemployment benefits decreased 13,000 to a seasonally adjusted 222,000 for the week ended Dec. 21, the Labor Department said on Thursday.

 

Eyes on:
1) 27 Dec: Germany retail sales (Nov)
2) 27 Dec: US weekly crude oil inventories
3) Update on LTF and window dressing

 

Technical View:
SET Support Level: 1550/1570
SET Resistance Level: 1595/1610