Stocks in Asia Edge Higher in Response to Biden’s $2 Trillion Infrastructure Plan

Stocks in Asia edged higher on Thursday after a fluctuate session in the last few days amid rising bond yield, greenback and the announcement of a $2 trillion infrastructure plan rollout.

 

As of 9:43 local time in Thailand on April 1, 2021, Nikkei increased 1.19%, SSEC rose 0.39%, HSI gained 1.02%, ASX 200 advanced 0.45% and Kospi hiked 0.80%.

 

Last night, the U.S. President Joe Biden unveiled a $2 trillion infrastructure plan as his administration shifted the focus to bolstering the post-pandemic economy, spanning over eight years and raised the corporate tax rate to 28% to fund it.

 

Asia Wealth Securities (AWS) expected the SET to move in a range of 1,575-1,605 points. The SET index continues to fluctuate due to external factors, especially drop in crude prices reflecting a revised reduction in crude oil demand forecast in 2021. AWS viewed this as a short-term impact on crude oil prices and stock prices in the energy and petrochemical sectors.

AWS expected the OPEC+ resolution to maintain the same proportion of production cuts, like the previous meeting which will return to be a factor to support oil prices. However, the security company kept its weight on speculation of stocks in the energy and petrochemical sectors.

AWS maintained the investment strategy. In this regard, there must be a caution of fluctuation that may occur from external factors, but increase the weight of equity investment from AWS’ suggested holding at least 50% cash to 35%-40% cash ratio, while still focusing on a Selective investment in stocks with specific positive factors, especially Core Investment in the theme (1) Shares that benefit from the government policy of EV CAR Thailand 2035 and (2) Shares that benefit from the opening of the country.

 

Core Investment

1) Stocks which obtained the benefit from Thai Baht depreciation (Trading within 3-6 months) – HANA, KCE, TU, ASIAN, GFPT, CPF, STA, STGT, SAT, EPG, SMPC and MEGA

2) Stocks which obtained benefit from EV CAR Thailand 2035 measure (Trading within 1-2 months) – BPP, GPSC, BCPG and EA.

3) Stocks which obtained the benefit reopen country (Trading within 6-12 months) – AOT, AAV, BA, ERW, M, CRC, CPALL, CENTEL, MINT, BH, BDMS, SPA, MBK, NOBLE, WHA and AMATA

4) Dividend Play (Middle-term trading 6-12 months) – SC, LH, QH, KKP, TISCO, RATCH, DIF, INTUCH, EASTW and TTW

5) Long term accumulative stocks (DCA) (Long-term trading over 1 year) – AOT, BEM, ADVANC, WHA, LH, CPALL, CPF, BDMS, HMPRO, BBL and KTB