Daily Strategy for Investors on October 15, 2019

Krungsri Securities (KSS) has made an analysis for the trading session on October 15, 2019, indicating the movement on the previous session and the market outlook for today.

 

The SET Index surged 18 points (+1.2%) to 1,626 in Bt61b turnover on optimism over US-China trade talks. Energy counters gained on higher crude futures following the attack on an Iran tanker.

In Thailand, ministers approved 16 measures to boost tourism. Foreign investors were net buyers of Thai shares at Bt215m, net long TFEX at 13,198 contracts, and sold net Bt1,552m worth of Thai bonds.

 

Market Outlook

KSS is neutral-positive towards the market today, expecting the SET Index to head north to test 1,630 – 1,635 before swinging back down. The market might respond to Trump’s statement that the US and China have reached a partial trade agreement; the US will not raise tariffs on Chinese goods from 25% to 30% on Oct 15, while China will order US$40-50b worth of US agricultural goods.

China is reportedly willing to negotiate again in late October before inking a deal. This development will lift global investment sentiment. However, crude prices dropped after the IEA slashed global crude demand forecasts for 2019 to 1m bpd and to 1.2m bpd for 2020 on the back of a slowing global economy. And Brexit uncertainty ahead of the Oct 31 withdrawal deadline could pull the SET back down.

 

Investment Strategy: Selective Buy

1) Stocks with robust 3Q19 earnings prospects: GPSC, BGRIM, EA, ADVANC, DTAC, BCH, CHG, EPG, PRM, JMT

2) Finance (MTC, SAWAD): To benefit from lower costs amid falling interest rates

3) Defensive stocks: AOT, INTUCH, ADVANC, BEM, BTS, BDMS, BCH, CHG, GPSC, BGRIM, TTW, CPALL

 

Recommended Stocks

MTC (BUY/IAA Consensus TP Bt63) – the finance sector will benefit from falling interest rates as that would reduce funding costs. MTC has Bt8,700m worth of debt maturing next year that could be refinanced at lower cost.

JMART (BUY/ IAA Consensus TP Bt11) – will continue to register earnings growth led by subsidiaries JMT, SINGER, and J – asset. And, sentiment towards JMART could be bolstered by reports iPhone 11 will be launched in Thailand on Oct 18.