Daily Strategy for Investors on March 29, 2019

Maybank Kim Eng Securities has made an analysis for the trading session on March 29, 2019, stating that SET yesterday saw strong buying pressure on STEC, VGI, BGRIM and ICT stocks like ADVANC and DTAC. IVL technically rebounded.

The index closed at 1,634.2 points (+4.8 points) with a trading value of THB 48 billion, (THB 41 billion the previous day). Foreign investors switched to net buy Thai shares by THB 64 million, institutional investors net bought by THB 225 million. There were net long on SET50 index future by 21,460 contracts.

 

Investment Theme
The Election Commission (EC) yesterday announced a remaining 5% election results. The total voters exercising their right reached 38.2 million or 74.7% (up from 69.7%), deducted by spoiled votes and no votes, the rest of the votes is 35.5 million. This means 71,000 votes represents 1 MP.

The Palang Pracharat party won 8.4 million votes, Pheu Thai 7.9 million, Future Forward 6.2 million, Democrats 6.5 million and Bhumjaithai won 3.7 million votes. Initially, Maybank calculated that the Pheu Thai side accounting for about 245 seats +/-, close to the same number. However, both sides’ MP numbers may change again after the EC considers the law violation case. Maybank has to wait for the confirmation from the EC on May 9.

Overall, Maybank believes the SET may swing in a range and fluctuate as to react to the foreign factors which include the details of the US-China trade talks in Beijing. If the trade war does not get worse, the global plays sectors are likely to outperform the market again.

 

March Investment Theme
The SET this week should swing in a range of 1620/45 points +/- to wait for 3 factors; 1) EC official election results. 2) Progress on US-China trade talks on March 27-28, 3) US bond yield curve. Recommend hold cash no less than 40%. Hold BEM, CPALL and PTTEP.

 

Big Issue
British parliament postpones Brexit deal scrutinize from March March 29 to April 12 or May 22.

 

Stock Pick & Trading Idea
Gradually accumulate IVL, target price at ฿65.00/share, expecting recover earnings in Q1 due to lack of stock loss and strong earnings in Q2. In the long term, the management sets a growth target of EBITDA to double in 2023 as it increases investment in HVA, M&A covering a wider range of products worldwide. Accumulate QH,target price at ฿.30/share for a high dividend, XD on April 24, a dividend yield of 4.5% (7.7% for the whole year).

 

Technical View: Intraday rebound, take profit at resistance to reduce portfolio
The SET index opened with a gap and jumped in the afternoon driven by strong buying pressure on ICT and media sectors. Big-cap stocks saw buy back pressure but the index failed to maintain above the gap at 1637. In the near term, we are optimistic that the index should maintain above 1625. But given the main trend being sideways, if it rebounds intraday, consider selling pressure at the resistances 1637 and 1645, if it is still strong, recommend selling stocks for profit.

 

Investment Strategy:
1) Investors with stocks, If rebounds intraday to test the resistance, sell stocks for the next trading cycle.
2) Without stocks, gradually buy stocks if weakens intraday, only for a rebound trading.

 

Maybank sets a support line at 1615 points and 1625 points, while setting a resistance line at  1637 points and 1645 points.