Daily Strategy for Investors on May 21, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on May 21, 2019, stating the US-China trade war implied the escalation, after the US government announced a blacklist of Chinese technology companies, Huawei. While Alphabet Inc., Google‘s parent company, has suspended the business with Huawei.

The movement will result in Huawei’s smartphone being unable to update Android operating systems (Android) as well as accessing popular applications like Google Play Store, Gmail and YouTube. The reactions to the US government may be used by China to counter the situation by not sending important minerals to produce chips for the United States.

As Thai politics from now on that is in the process of establishing a new government. AWS expected to see the face of the new government and the new prime minister in June 2019.  Investors are also focusing on the new government’s economic team. While foreign inflow from the MSCI formula revision in late May will come, but domestic political factors should be pressured. Which yesterday, during the Thai stock market closed, Emerging markets such as the Philippines, Indonesia and Vietnam increased by more than 1% in all markets.

 

AWS expects today’s index of 1,600-1,620 points and recommends CPALL, CKP, and BEM while this week’s index range is expected at 1,595-1,630 points and recommends CKP and BEM.

 

Pick of the Day: CPALL (Recommend: BUY TP at ฿89.00)
AWS expects 2Q19 results to grow YoY due to (1) hot weather to support beverage sales with high gross margins, and (2) accelerating the opening of new branches during 1H19 allowing to recognize more revenue. The end of 1Q19, the company opened 311 new stores, accounting for 44% of the full-year target. AWS likes CPALL’s strategy which focus on the continued release of new products and services. Recently, the company just expand the speed-D package delivery service throughout the country.

CPALL’s price pattern is also very strong in the full uptrend with Daily, Weekly, & Monthly Buy Signal. When considering the price pattern, the target is Bt79.50 and short-term stop loss is  Bt75.50 (Resistance: 77.00, 77.50, 77.75; Support: 76.50, 76.25, 75.75)

 

Foreign Market Update:
US stock market : Dow decreased 84.10 points or -0.33%, while S&P 500 was down 19.30 points or -0.67% and Nasdaq decreased 113.91 points or -1.46%, responding the investors sold the stocks in technology and chop manufacturer after the US government revealed the blacklist to Huawei which is the Chinese technology firm, while the Alphabet which is the parent company of Google had suspended doing the business with Huawei. From this point, the market was concerned that the trade will intensify.

 

EU:Theresa May (British Prime minister) prepares to present the Brexit agreement which better than the old version to members of parliament for considering. In addition, she believes that the agreement will obtain the support from parliament, while this vote will be the 4th  in early June after being denied 3 consecutive times. The conservative party state that Theresa May will resign from her position after this vote.

 

Commodities:
Crude oil price : WTI for June delivery was up 34 cents, or 0.5%, to closed at USD63.10/barrel; Brent for July delivery was decreased 24 cents or 0.3%, to closed at USD71.91/barrel after the OPEC has shown the need to extend  production down until the end of 2019, while the investors also keep an eye on crude oil stock report in this week from the EIA which will disclose the report on 22 June 2019.