Daily Strategy: AWS Expects Weak Volume over Long Holiday, Omicron Remains in Focus

Major stock markets in Asia traded in a mixed session on Monday amid slower-than-expected retail growth in China while Australia and Hong Kong are closed for Christmas holiday.

On December 27, 2021, Thailand’s SET Index opened at 1,642.29 points, increased 5.07 points or 0.31%.

As of 10:15 local time in Thailand, Nikkei fell 0.25%, SSEC rose 0.16%, Kospi slipped 0.16% and IDX Composite gained 0.13%.

Earlier this morning, China reported that profit of industrial firms expanded at a much slower pace in November, rising 9.0% to 805.96 billion yuan, compared to a 24.6% increase in October. A shrink in profit growth was due to a decline in some raw material prices, a faltering property market and weaker consumer demand.

 

Asia Wealth Securities (AWS) expected SET Index this week to move in a range of 1,610-1,655 points. Last week (20-24 Dec 2021), the SET closed at 1,637.22 points, down 4.51 points. (-0.27%) while the average turnover was at Bt67.481bn per day, a decrease of 13.3%WoW.

AWS stated that the market direction last week was within the range we expected from the pressure of the epidemic situation of Omicron before recovering in sequence supported by economic stimulus measures and enhancing measures to control COVID-19 as expected (Elevated but no lockdown) while AWS expected the SET this week to continue weak trading volumes from the week before due to the Christmas season before the long holiday during the New Year (31 Dec 2021 to 3 Jan 2022). The issues to be covered for this week are the situation of Omicron both domestic and international and window dressing before the end of 2021.

For the investment strategies, AWS recommended the Events Play portfolio focusing on stocks that still have Laggard prices, but expected strong 4Q21 and 1Q22 earnings growth and domestic play stocks that benefit from a recovery in domestic purchasing power from the government’s economic stimulus measures based on the Core Investment portfolio.

 

Core Investment

1) Laggard and supported from earnings (Trading 1-3 months) – OSP, CPALL, LH, WHA, AMATA, PTG, OR, SPRC, BANPU, IVL, SELIC, IHL, KBANK, KTC, TASCO, TTB, KTB and BBL.

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

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