AWS Recommends “Buy on Weakness” for Oil Stocks amid Volatility in Crude Prices

Asia Wealth Securities (AWS) expected the SET today to move in a range of 1,575-1,605 points, returning to  positive sentiment after the cabinet still approves the provision of vaccines, Sinovac, Pfizer and Moderna which are the main vaccine and more alternative vaccines, making the SET yesterday (6 Jul) increased to test the resistance level of AWS’ estimate at 1,595 points, but the SET continues to have profit-taking momentum.

 

An interesting issue is the release of the minutes of the Federal Reserve’s meeting (Fed) today (7 Jul). The interesting issue is when the Fed signals to cancel the big economic stimulus measures.

However, the SET overview today (7 Jul) still puts pressure on the COVID-19 situation in the country as the number of cases has increased to 6,000 per day, the number of critically ill and ventilator patients increasing. In addition, the price of crude oil dropped last night will also result in profit-taking in the energy sector.

 

For investment strategy, AWS recommended Selective buy stocks with unique positive factors. AWS’ previous recommendations include stocks with expected strong 2Q21 earnings, stocks that benefit from the baht and exports from the global economic recovery. AWS chose STA, ASIAN, TU, HANA, KCE, SAT, AH, MEGA, NER, EPG and SMPC. While oil-play stocks, AWS recommended gradually buying when the share price weakens due to the volatility of crude oil prices in the short-term.

 

Core Investment

1) Stocks benefited from crude oil price increase – PTTEP and PTTGC.

2) Stocks obtained benefit from Thai baht depreciation- STA, ASIAN, TU, HANA, KCE, SAT, AH, MEG, NER, EPG and SMPC.

3) Stocks expected good performance in 2Q21 (Trading 1-3 months) – BCH, CHG, HMPRO, GPSC, BPP, PTTGC, IVL, PTTEP, PTG, SONIC, KWM, ORI, SPALI, KKP, KBANK and MTC

4) Dividend Play (Middle-term trading 6-12 months) – LH, QH, ORI, SPALI, ADVANC, KKP, TISCO, STA, STGT, TMT, TVO and STI

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