SET Opens Higher by 8pts, AWS Recommends to Monitor Covid Situation and Overseas Factors

The Stock Exchange of Thailand (SET) Index opened 8.21 points higher or 0.51% to 1,619.74 points with a trading value of 2.27 billion baht on June 7, 2021.

 

Asia Wealth Securities (AWS) expected the SET this week (7-11 June) to move within a range of 1,580-1,630 points with a chance to be volatile. The risk factors come from (1) The COVID-19 situation both at home and abroad. The number of new infections worldwide is still high although the number of infected people in Asia, in particular, India began to decline. (2) Negative sentiment from the reduction of the U.S. economic stimulus package through the building of infrastructure from USD2.2tn to USD1.7tn; and (3) The uncertainty of international politics between China and the U.S. after the U.S. ban on investment in Chinese companies.

 

However, there are still positive factors from (1) The progress in vaccination implementation in the country is increasing according to the goals of the government from 7 June, vaccinations began to be opened to the general public, and (2) Concerns over changes in monetary policy for both Europe and the U.S. eased after reports that the unemployment rate remained high in May, despite a decline from April (following the ECB meeting on 10 June).

 

For short-term investment strategy, AWS weighed the investments in Global play stocks in a speculative manner, especially the stocks that benefit from the Commodity price, especially the rising crude oil price (AWS chose PTTEP, PTT, PTTGC, BCP, BANPU, TOP, IRPC and SPRC as top picks).

AWS began to recommend stocks in its core investment that benefit from expectations for a reopening economy (Economic confidence is increasing from alternative vaccines) and stocks that are expected 2Q21 net profit continues to be good.

 

Positive domestic factor is another factor that will support the overall investment from progress in the distribution of vaccines in the country after the government said it would start a vaccination program for the general public from today (7 June), including a target of 50 million doses of the first injection by Sep 2021 to create herd immunity by the end of 2021 (AWS estimated that vaccinations need to be implemented 350,000-400,000 doses per day to achieve herd immunity by the end of 2021). AWS viewed this issue as a supporting factor for Core Investment (Economic confidence is increasing from alternative vaccines).

 

Core Investment

1) Increased confidence in the economy from alternative vaccines (Trading 1 month) – BDMS, CHG, BCH, MINT, ERW, AOT, AAV, CPALL, CPN, CRC, BJC, AU and M

2) Thai Baht depreciation (Trading 1 month) – CPF, TU, KCE and HANA

3) Stocks expected good performance in 2Q21 (Trading 1-2 months) – BCH, CHG, HMPRO, GPSC, BPP, PTTGC, IVL, PTTEP, PTG, SONIC, KWM, ORI, SPALI, KKP, KBANK and MTC

4) Dividend Play (Middle-term trading 6-12 months) – LH, QH, ORI, SPALI, ADVANC, KKP, TISCO, STA. STGT, TMT, TVO and STI.

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