Daily Strategy for Investors on November 15, 2019

Maybank Kim Eng has made an analysis for the trading session on November 15, 2019, pointing out some of the must-know events in the equity market as follows:

 

The SET yesterday continued weakening on concerns about the uncertainty of trade negotiations. Big caps that saw sharply drop included IVL, TU, IRPC, BJC. Mid caps PRM and WORK also plunged. The index closed at 1,609.47 (-5.6 points) with a trading value of THB48b (THB52b the previous day).

Foreign investors net bought Thai shares by THB392m. Institutional investors net sold by THB2.407b. There were net Short on SET50 Index Futures by 11,766 contracts.

 

Stock Picks & Trading Idea
CHG (TP THB2.80): 3Q19 profit was THB268m (+78%YoY, +119%QoQ), 46% higher than forecast thanks to strong performance with better than expected revenue from SSO customers. Maybank expects 4Q19 earnings to strong grow YoY, coupled with 2 new hospitals (CHG304 and Ruam Pat Cha Choeng Sao) are approaching break-even point.

 

Investment Theme
China’s economy is weakening, Germany slightly recovered, keep an eye on Thailand next week: Yesterday, there were reports of several interesting economic indicators around the world, led by China’s industrial production figures in October expanded only 4.7% YoY, slowing down from the previous month + 5.8% YoY and below market expectations at + 5.4% YoY, reflecting the slowing economy in China. This was due to the protracted trade war.

On the European side, Germany’s 3Q19 GDP expanded + 0.1% QoQ, the market expected to contract by -0.1% QoQ. Germany’s GDP growth should help unlock a technical recession as its GDP last quarter shrank -0.2% QoQ. However, this revival of the GDP may not yet indicate that the German economy will concretely recover should the overall picture of the global trade war remains.

Therefore, Maybank indicates that investors should keep an eye on the economic signals of Germany in the next period closely. For domestic factors, Thailand will report 3Q19 GDP growth on Monday (18 Nov). Maybank expects a GDP growth of +2.8 % YoY from +2.3% YoY in 2Q19. The consensus is 2.8%, maximum 3.2% and minimum 2.3%.

 

Investment Theme: Today’s SET’s support level is at 1610 and resistance at 1625. We recommend gradually accumulate hospital (CHG, BDMS), tourism (SPA, ERW, AOT) transportation (BEM, BTS), retail (HMPRO).

 

Big Issue
1) China Industrial Production in October dropped to +4.7% YoY, forecast +5.4%
2) Germany 3Q19 GDP grew +0.1% QoQ, market forecast to contract -0.1% QoQ
3) Finance Ministry to finalize new fund to replace LTF in next 2 weeks

 

Keep an Eye on
1) Last week of 3Q19 earnings report (no later than 15 Nov morning)
2) 18 Nov: 3Q19 GDP report
3) 20 Nov: FTSE rebalance announcement
4) 21 Nov: Exports for Oct
5) 21 Nov: Existing Home Sales in Oct
6) 22 Nov: US PMI Manufacturing and Services (Nov), US& Eurozone Consumer Confidence Index (Nov)