Daily Strategy for Investors on September 12, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on September 12, 2019, pointing out some of the must-know events in the equity market as follows:

 

Thai Stock Market Today

1) Trump announced the postponement to impose more tariffs on Chinese imported products of USD250bn from 1 October to 15 October.

2) China has revealed the first 16 types of products from the US to be waived from the first round of additional imported tariff which will come into effect on 17 September for 1 year until 16 September 2020. However, major imported products from the US, such as soybeans, corn and meat are not waived.

3) The 10-year US bond yield revised up to 1.76% as investors sold bond from more confident on economy and invested more in the stock market.

4) The Constitutional Court rejects the request of the Ombudsman to make a decision on the Prime Minister’s case on an incomplete oath which helps easing certain concern on the government’s stability

5) Top three stocks; NVDR bought ADVANC, GULF and SCB. Yesterday, there was a buying force in electricity stocks as the price skyrocketed for a long time like bond. In addition, investors turned to buy commercial banks shares as they were laggard.

 

Investment Ideas:

1) Still don’t believe that the market will be in the uptrend.

2) Foreign investors returned to perform a net buy in Thai stock market for the first day in 13 business days which is quite a high level of Bt1.4bn.

3) Be cautious of electrical stocks that fall further.

4) Looking at laggard group such as Banking sector and CPN.

5) Today’s index range is expected to be 1,658-1,685 points. Recommended stocks are CPN, BBL, and ORI.

 

Stock & Comment

CPN – TP ฿85.00/share

BBL – TP ฿225/share

ORI – TP ฿11.50/share

 

Pick of the day: CPN (BUY; AWS TP Bt85.00)

AWS expects the 2H19 performance to recover from (1) higher revenue from rental fee and service after the opening of a new mall and the completion of renovation of shopping centers (2) the transfer of condominiums, concentrated in the 2H19 (3) the occupancy rate of department stores in Malaysia, which is expected to revise up to 80% from the current 70% (4) the assets monetization to CPNREIT in the 4Q19, of which the Bt8.0bn revenue is expected to be recognized.

The Central Village opened for service on schedule after the dispute with AOT. The first Phase of the project has been opened with a rental space of to 21,000 sq.m. from the total of 40,000 sq.m. (75% occupancy rate). The company expects to have around 6-10 million customers a year. After the latest opening, there was an average of 20,000 customers per day, higher than CPN estimated of 17,000 people per day. AWS expects the occupancy rate to revise up in the future, help driving the company’s revenue.

Recommend BUY with a target price of Bt85.00 and an expected 3.0% dividend yield for the year 2019.

CPN is still in the downtrend from Weekly & Monthly Sell Signal. CPN has only short-term strength from Daily Buy Signal. If CPN can close above Bt68.50 at weekly market, it will resume a medium-term strength from a new Weekly Buy Signal. When considering CPN, the first target is Bt69.00 and the initial target is Bt72.25, respectively. The short-term stop loss for CPN is Bt67.25 (Resistance: 69.00, 69.50, 70.50; Support: 68.25, 67.75, 66.75).