Daily Strategy for Investors on August 23, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on August 23, 2019, pointing out some of the must-know events in the equity market as follows:

1) IHS reported that PMI in USA was in the contraction for the first time in 10 years.

2) Investors focus on Jerome Powell, Chairman of Fed, which has scheduled for speech at the Fed’s annual economic meeting in Jackson Hold today, likely to cut the interest rate many times in 2019.

3) Recommend Underweight in construction business.

4) The BDI Freight Index increased 57 points, or +2.77%, to close at 2,118 points which highest in a month.

5) Strategy for investment: If the US cut the interest rate, it means the economic recession so that we recommend sell due to negative factors larger than positive factors, and investment theme will be safe heaven sector such as Finance sector as it obtains benefit from interest rate cut.

6) The SET index today is expected to be around 1,620-1,640 points with recommending stocks of SAWAD (TP ฿62.00), WHAUP (TP ฿8.00), WHA (TP ฿5.00).

 

Pick of the day: Recommend “BUY” SAWAD with a target price of ฿62.00/share.

SAWAD is one of outstanding stocks that can grow economically from several issues, including (1) High loan demand, resulting in a loan growth in 2Q19 by 7.6%YTD in contrast with others that has a contracted loans (2) loan growth in 2H19 continues to grow well by focusing on the “land for cash” (from BFIT), which has a lot of demand while the supply is still low.

In contrast, other types of loans are highly competitive in the market, plus other loan markets started to slow down (3) SAWAD was traded at a 17.4x PER, lower than the average finance sector of 18.6x.

AWS, therefore, recommends buying with a FY2020 target price of Bt62.00 based on a 3.9x Prospective PBV.

SAWAD is still in Uptrend from Daily and Monthly Buy Signal. If SAWAD could close the weekly market above at Bt56.50, SAWAD would resume into the Uptrend, thanks to Weekly Buy Signal. When considering the price pattern, SAWAD has a next target of Bt62.50 and Bt72.25, respective. The Short-term stop loss for SAWAD is Bt53.25. (Resistance: 55.50, 56.25, 57.25; Support: 54.75, 54.00, 53.00).