Daily Strategy: AWS Expects Short-Term Recovery in Positive Response to FOMC Meeting

Major stock markets in Asia traded in a mixed session on Thursday after the U.S. Federal Reserve resolved to maintain the interest rate steady at the range of 0-0.25%, but pushed a pace of QE tapering to $30 billion a month.

On December 16, 2021, Thailand’s SET Index opened at 1,630.68 points, increased 7.19 points or 0.44%.

As of 10:10 local time in Thailand, Nikkei jumped 1.56%, SSEC increased 0.34%, Hang Seng Index fell 0.73%, ASX 200 slipped 0.50% and IDX Composite rose 0.11%.

On the last day of the FOMC meeting in 2021, the U.S. Federal Reserve last night resolved to maintain the interest rate steady at the range of 0-0.25%. The Fed will double the pace of asset tapering to $30 billion a month, then will accelerate the reduction further come 2022.

Projections released on Wednesday indicated that Fed officials see as many as three rate hikes in 2022, with two in 2023 and two more in 2024.

 

Asia Wealth Securities (AWS) expected the SET today to move in a frame of 1,610-1,635 points and have a short-term recovery opportunity. Positive response to the FOMC meeting results as expected (keep the policy interest rate, accelerate the QE reduction, raise the interest rate 3 times in 2022 starting in June 2022). However, it still has to monitor the epidemic situation of the Omicron virus around the world, especially the situation in England after the WHO continues to weigh the severe situation.

For the main investment strategy, AWS weighed only 50% of the portfolio with a focus on domestic play stocks, while recommending speculation, event plays, oil play, stocks benefiting from the FOMC meeting and international issues that the U.S. Members of Parliament passed a bill to increase the debt ceiling for the U.S. federal government to avoid default by drafting a law to increase the debt ceiling presented to President Joe Biden for further signing into law. AWS chose PTTEP, PTT, SPRC, KBANK, TTB and BLA.

 

Core Investment

1) Reopening country (Trading within 1 month) – AOT, BAFS, AAV, ERW, PTTEP, SPRC, AMATA, BDMS, KBANK and TTB.

2) Recovery of purchasing power in the country (Trading within 1-2 months) – BLA, BJC, OSP, CBG, ORI, SC, BEM, MAKRO, CRC and HMPRO.

3) Earnings Play 4Q21 (Trading within 1-2 months) – SC, ADVANC, OSP, HANA, KCE, FSMART, PACO, FORTH and APURE.

4) Dividend Play (Trading more than 6 months) – KKP, TCAP, TASCO, PSH, TISCO, SPCG, SC, WHAUP, CTW, ORI, RATCH, TVO, TTW and SPALI.

5) Long term accumulative stocks (DCA) (Long-term trading over 1 year) – AOT, BEM, ADVANC, WHA, LH, BDMS, HMPRO, KBANK and KKP