Daily Strategy for Investors on July 22, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on July 22, 2019, pointing out some of the must-know events in the equity market as follows:

1) The Federal Reserve (Fed) may cut interest rate by just 0.25% rather than 0.5% at the end of this month.

2) Iran has seized a British tanker sailing into Iranian territorial water.

3) Trade negotiation between the US and China which has no progress.

4) The US Secretary of Finance warned that the Ministry of Finance has a budget for managing the country for only two months until September. This may cause the government to be unable to pay USD22tn debt and will affect the global financial market.

5) Crude oil price was driven by new concern on tension in the Middle East. BDI Freight Index: closed on the latest business day at 2,170.00 points which were up 40.00 points or +1.88%.

6) Fitch Ratings (Fitch) revised Thai reliability view to be “positive” from originally stable after politics became stable and the baht has appreciated.

7) Thai stock market index range this week is expected to be 1,715-1,755 points. Recommended stocks this week are BEM, PSL, and ORI.

8) Thai stock market index range today is expected to be 1,725-1,745 points. Recommended stocks today are BEM (TP at Bt12.50), PSL (TP at Bt13.00), and ORI (TP at Bt 11.50).

Pick of the day: BEM (AWS recommend BUY at a target price of Bt12.50)
AWS stated that the issue that makes BEM still interesting is an earnings growth in 2H19 and to continue until 2020 from the passengers that will increase after operating Blue Line extension, Phase 2 (Sep 19) and Phase 3 (Mar 20). We have a positive view. We recommend BUY with a target price of Bt12.5.

BEM has strong Uptrend thanks to Monthly Buy Signal. However, BEM’s price pattern is still weak a short term from Daily & Weekly Sell Signal. When considering the price pattern, AWS expects that BEM will still volatile for a period of time until it is able to return to strength both on Daily & Weekly Buy Signal. The primary target is expected to be Bt11.60. (Resistance: 11.10, 11.20, 11.50; Support: 10.90, 10.80, 10.50)

Crude oil price: WTI for August delivery was up 33 cents, or 0.6%, to close at USD55.63/barrel; Brent for September delivery was up 54 cents, or 0.9%, to close at USD62.47/barrel amid new concern on tension in the Middle East which may affect the amount of crude oil and help driving oil price.

The oil market has just been driven earlier from the announcement of the US President Donald Trump on Thursday that the USS Boxer had shot down one of an Iranian drone in the Hormuz Strait as it has threatened the safety of US ships and crews. That shooting of the drone is considered as self-defense.