Daily Strategy for Investors on November 26, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on November 26, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) US trade talks with China are expected to be positive and able to conclude the first phase of negotiations before 15 December 2019. It benefits the stock market around the world.

2) The adjustment of the investment weight of MSCI Thailand is effective on 26 November 2019. Expected to add SAWAD, BGRIM, GPSC and OSP.

3) The recent Singapore GRM (GRM) is -USD1.87 per barrel including +USD9.4 per barrel of Sulfur Fuel Oil GRM and  -USD26.7 per barrel of High Sulfur Fuel Oil GRM. It is a waiting period of high demand. For refinery stocks, we only focus on speculation and only on TOP (AWS TP Bt73.00), BCP (AWS TP Bt34.00), PTTGC (AWS TP Bt58.00). We do not focus on buying for investment during the downtrend of the industry.

4) Today’s index range is expected to be 1,605 -1,630 points. Recommended stocks are KBANK, SAWAD and GPSC.

 

Stock & Comment
KBANK – TP ฿182.00/share
SAWAD – TP ฿72.00/share
GPSC – TP ฿97.00/share

 

Pick of the day: KBANK (BUY; AWS TP Bt182.00)

AWS states that KBANK’s loan figures for October 2019 grew 3.4% YoY which is the best among large commercial banks (KTB grew 2.6%, SCB grew 1.0% and BBL shrank 3.6%). AWS expects KBANK’s 4Q19 loans to accelerate due to a high season for lending. It is expected to help offset the negative impact of the loan interest rate cut. As a result, NIM slightly revises down or maybe stable.

Although the overall Thai economy is weak which affects the expansion of SMEs loans, but the bank expects the increase in digital lending. The FY2020 loan is targeted to be at Bt100bn or up from 2018 by Bt20bn or 5x. It helps increase the chances of lending to high potential customers. AWS recommends BUY with a target price of 2020 at Bt182 based on 1.0x PBV.

KBANK is likely to be in the downtrend from the occurrence of Monthly Sell Signal, but the price has resumed its strength in both short and medium terms from the occurrence of Daily and Weekly Buy Signal. Once consider KBANK, its initial target is at Bt159.00 and a primary target is at Bt176.00 respectively. KBANK has a short-term stop-loss point at Bt146.50 (Resistance: 157.50, 159.00, 161.00; Support: 154.50, 152.50, 151.00).