Daily Strategy for Investors on July 10, 2019

Asia Wealth Securities has made an analysis for the trading session on July 10, 2019 as the following:

Thai Stock Market Today
– The speech of Powell to find economic indicators. He will speak to the House Financial Services Commission on Wednesday 10 July and to the Senate Banking Commission on Thursday 11 Jul according to the US time. However, Asia Wealth anticipates that the Fed may well not change the direction of interest rate cuts. Asia Wealth sees the cut is likely to extend the period from 30-31 Jul to 19 Sep.
– BDI: Baltic Dry Index soared to 1,759 points, +34 points or +1.97%, after being stable yesterday. This will send a positive aspect to PSL and TTA.
– The SET is predicted to be between 1,715 and 1,740 points with the recommended stocks of SQ, SC, CK, and PSL.

Stock Comments
– SQ (AWS sets the target price at THB 3.20, Under review) SQ may well receive new work from Myanmar, resulting in an increase in the company’s backlog of Bt10bn. Asia Wealth, therefore, will revise our target price up after receiving such news clearly.
– SC (AWS sets the target price at THB 4.00) It is expected that 2Q19 pre-sales rise on YoY and QoQ, together with preparing to launch a new project, SCOPR Lang Suan on 17 Jul.
– CK (AWS sets the target price at THB 30.00) There was a decrease in CK’s price together with having a big Lot of THB 221 million. Asia Wealth suggests keeping an eye on the rise in backlog after granting a 1,500MW dam project in Laos.
– PSL (AWS sets the target price at THB10.50)

Pick of the day: SQ (THB2.98; BUY; AWS sets the target price at THB3.20)

SQ is preparing to sign an MOU for large coal mining in Myanmar on Thursday (11 Jul 19), this MOU is expected to generate tremendous growth opportunities for SQ. This mine volume is expected to be similar to that of the Hongsa mine in Laos. (About THB11 billion) but would be smaller than Mae Moh mine at Lampang province.
Currently, SQ has a total backlog of up to THB30 billion. If such work is signed with the Myanmar government, the company’s backlog is expected to rise further, resulting in the expansion of the income base in the future. Asia Wealth may well revise the target price up again after knowing the details of such work from the press conference on 11 Jul. From our early mention, SQ has received good news in the short term from the news that the EGAT has increased wages per unit to SQ since the beginning of the year. 
SQ has a strengthen Uptrend due to Daily, Weekly, and Monthly Buy Signal. The next target should be THB3.50 and THB4.44 respectively with a stop loss point of THB2.72. Asia Wealth set resistance at THB3.04, THB3.10, and THB3.22, and support line at THB2.94, THB2.88, and THB2.76)

Foreign Market: US stock market
DOW fell 22.65 points or -0.08%, while S&P500 increased 3.68 points or +0.12% and NASDAQ rose 43.35 points or +0.54% due to investors waiting for Jerome Powell, Chair of the Federal Reserve, which will announce the monetary policy and economy. However, S&P500 and Nasdaq rose because the markets get support from technology stocks, including APPLE and NETFLIX stock.

Commodities:
– Crude oil prices: WTI for August delivery rose 17 cents, or 0.3%, closing at USD57.83/barrel, while Brent for September delivery increased 5 cents, or 0.1%, closing at USD64.16/barrel so it made a record closing in the positive for the fourth consecutive day, supported by the reduction in oil production capacity of OPEC, and the tension in the Middle East. Amid the volatile trading conditions due to investors still concern the global economic slowdown will affect oil demand.
– Ocean freight charge: Baltic Dry Index (BDI) rose 34 points, closing at 1,759 points, or +1.97% so it will benefit to PSL and TTA.