AWS Expects Short-Term Recovery in SET amid Positive Economic Outlook

Asia Wealth Securities (AWS) expected a short-term recovery in the SET Index today and moved sideways in the range of 1,600-1,625 points after hitting a high of 1,628 points last week.

AWS expected the SET to have a chance to test the same high of the previous week from the confidence in the overall economy and rising crude oil prices. This is a factor supporting Cyclicals and Commodity Play stocks.

However, AWS believed the stock market is likely to return to volatility before the FOMC meeting next week after the inflation figures (reported 10 Jun) and the expectation of a decrease in the unemployment rate in the next 1-2 months will increase the chances that the Fed will start signaling a change in monetary policy at the meeting from this round onwards.

 

Medium-term investment strategy (1-3 months), AWS continued to recommend Selective investments in stocks with unique positives based on the Core Investments are those that benefit from the expectation of a reopening of the economy (Economic confidence is increasing from alternative vaccines) and stocks that expected 2Q21 net profit continues to be good.

 

WTI crude for July delivery closed at USD70.05 per barrel, up 82 cents (+1.2%), helped by the World Bank adjusted world GDP in 2021 is projected at 5.6%, an increase from the previous projection (Jan 2021) of 4.1%, driven by U.S. economic stimulus measures, including the rapid expansion of the Chinese economy while reporting crude oil reserves in the U.S. according to the U.S. Energy Information Administration (EIA), today (9 Jun) will be more supportive.

Market Consensus expects U.S. crude reserves to drop 3.58 million barrels, giving us a positive view on crude oil prices in the short term. Such a positive factor is a support factor for Cyclicals and Commodity Play, AWS chose CPF, TU, SAT, TVO, HANA, KCE, PTTEP, PTTGC, III, SONIC and PSL.

 

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