Daily Strategy for Investors on September 2, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on September 2, 2019, pointing out some of the must-know events in the equity market as follows:

Thai Stock Market Today:

1) The government is confident The US and China began imposing tariffs on imported products according to the original plan yesterday (1 September) at 11.00  am Thai time. In this round, the US government started to impose 15% tariff on Chinese products worth around USD 125 bn including SmartWatch, flat-screen TVs and shoes, while China started to impose 5% tariff on the import of crude oil from the US.

2) This week, therefore, AWS believes that Thai stock market is still facing volatility and waiting for a key factor which is the Fed’s interest rate cut on 19  September 2019 by 0 .25% to 2.00% and the FMC meeting of BOT that is expected to fix policy interest rate at 1.50%.

 

Investment Ideas:

1) The US-China trade war moves forward/start concerning on the Brexit

2) Overbought stocks at the end of last week especially the rise in energy stocks with weak fundamental. Investors should be cautious of selling force.

3) Positive factor is the expectation of US interest rate cut.

4) New BDI freight rate rose to 2,378  points which was up by +101 points or + 4.44%.

5) Speculating on TASCO, TIPCO following the downtrend of oil price.

6) Core Port stocks of the month: GPSC, WHAUP, AMATA, CPALL, OSP, AOT, and BEM.

7) Today’s index range is expected to be 1,640-1,660  points. Today’s recommended stocks are ORI, CPALL, TASCO, PSL.

 

Stock & Comment

ORI  – TP ฿11.50/share

CPALL    – TP ฿94.00/share (concretely penetrates more into vending machine business.)

TASCO – TP ฿22.40 (benefited from the fall of oil price.)

PSL – TP ฿13.00/share (freight rate made a new high in six years.)

 

Pick of the day: ORI (BUY with a target price at Bt11.50)

AWS has a positive view on ORI for the strategy of avoiding launching mid-range projects (Bt4-6mn) to minimize the impact of LTV measure. It has been reflected by the company’s presales during the launching of projects “The Origin” and “Park Origin” in the 8M19 with an average high take-up rate of 70-80% which is 20-30% higher than other operators.

In addition, the company’s international customer base is expected to be expanded after having DWG to be its agency. This is due to DWG’s expertise in penetrating market overseas, especially Singapore and Hong Kong. It is also coupled with the current prolonged conflict in Hong Kong, resulting Hong Kong buyers and investors, including Chinese, to increase their interest in Thailand real estate as it is worth the price and has a high return. Recommend “BUY” with a target price of Bt11.50.

ORI remains in the uptrend from Weekly & Monthly Buy Signal. ORI is still waiting for the return of a short-term strength from a new Daily Buy Signal once the market is able to close above Bt8.35 which will enable ORI to be back to the full uptrend. ORI has the first target of Bt8.45 and a preliminary target of Bt9.75, respectively (Resistance: 7.95, 8.00, 8.10; Support: 7.85, 7.75, 7.70).