Daily Strategy for Investors on November 28, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on November 28, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) Trump signed a draft bill, “Hong Kong Human Rights and Democracy Act”, supporting democracy in Hong Kong may upset China at the time that the US and China is still moving forward in trade negotiations.

2) The recent Singapore GRM (GRM) is -USD1.87 per barrel. It is +USD9.4 per barrel of low sulfur fuel oil GRM and  -USD26.7 per barrel of sulfur fuel oil GRM. It is a waiting period for high demand for oil in winter. For refinery stocks, we focus on BCP speculation (AWS TP Bt34.00)

3) Real estate stimulus measures that are expected to benefit houses at a price below Bt3mn. The measures are limited to just 2 quarters which are the 4Q19 and the 1Q20 for 100,000 people. This may not encourage a sustainable recovery in the long run. We pick to invest in some benefitting stocks such as SPALI, ORI, ANAN and AP.

4) Today Thai stock market index range is expected to be 1,60 0-1,615 points. Recommended stocks are BCP, BEM, SPALI and AOT.

 

Stock & Comment
BCP – TP ฿34.00/share
BEM – TP ฿12.50/share
SPALI – TP ฿20.00/share
AOT – TP ฿84.00/share

 

Pick of the day: BCP (BUY; AWS TP Bt34.00)

AWS sees that BCP has the most benefit from IMO2020 while the company is ready for fuel oil high quality (LSFO). BCP is one of the refining factories in the country that operate at full capacity 4Q62.

The LSFO fuel oil refining margin in the 4Q62QTD range was $9.27 a barrel, up 19.6%QoQ and with a margin of $25.16 per barrel of HSFO fuel oil. GRM of the main product groups (jet fuel and gas oil) decreased QoQ, but we expect to return to the winter season at the end of the year. Gasoline GRM is still strong, with 4Q62QTD at $ 14.25, up $ 2.59 per barrel from 3Q62.

In addition, AWS rates BCP as the best in the petrochemical and refining sectors because of no risk from the weak petrochemical spread.