Daily Strategy for Investors on March 4, 2020
Daily Strategy for Investors on March 4, 2020
Asia Wealth Securities (AWS) released an analysis for the trading session on March 4, 2020, indicating the essential events in the stock market as follows:
Investment Ideas:
1) Dow Jones fell 785.91 points (-2.94%), while WTI crude oil price was up 43 cents (+0.9%) and gold price rose USD49.6 (+3.11%).
2) The FED surprisingly cut the interest rate by 0.50% to 1.00-1.25% before the FED’s scheduled meeting on 17 -18 Mar.
3) The US market responded negatively to a Fed President’s statement stating that the situation of COVID-19 will affect the US economy for some time. This causes investors to worry that the impact on the economy may be worse than expected, with the VIX Index rising to 36.82 points. US government bond yields hit the record low with 2-year US bond yield at 0.687%, while 10-year US bond yield at 0.981%, and 30-year US bond yield at 1.601%.
4) AWS believes that the SET might respond positively with news that the FED cut the interest rate because of assessing the impact on the overall economy from COVID-19 to not yet in crisis like the year 2008 that caused the US economic crisis.
5) Positive factors supporting the SET and stock markets in the region are (1) the cabinet preparing to launch economic stimulus measures, especially the tourism sector and (2) increased Chinese travels data (data from The New York Times), especially in secondary cities, reflecting the situation of COVID-19 to be likely to be passed the worst point.
6) The latest Thai baht this morning was Bt31.405 per USD, which appreciated for the fifth consecutive day.
Today, AWS expects the SET to be within the range of 1,370 – 1,397 points (with support at 1,370 1,359 and 1,342 points and resistance levels at 1,386 1,397 and 1,414 points).
NOBLE- 2020, the firm continues to launch new projects and looking at foreign investment opportunities. Lastly, the firm has a backlog which will secure 74% of revenue target and AWS forecasts the earnings of 2020 at Bt1.9bn. Also, the firm announces to pay 2H19 dividend at Bt2.20/share (XD 12 May). Recommend “BUY” with target price at Bt23.2.
HMPRO- The total sale of 1Q20 is affected by the negative SSSG in JanFeb 2020 due to the effect of the Covid-19. The firm aims to expand 5 more branches within 2020 and has the confidence that the net profit will increase YoY but with a growth rate that reduced to 4%. Recommend “BUY” with target price Bt19.00
Theme Investment:
1) Accelerate the disbursement of the government budget in 2020. AWS chooses CK (TP Bt22.00), SEAFCO (TP Bt7.30), WHA (TP Bt4.40), and KKP (TP Bt80.00).
2) Government stimulus measure, AWS favours AOT (TP Bt79.00), CPALL (TP Bt85.00), BEM (TP Bt12.50) and HMPRO (TP Bt19.00).
3) Global trade has eased and Thai baht depreciates. AWS chooses HANA (TP Bt39.00), TU (TP Bt18.40), and CPF (TP Bt33.00).
4) Interest rates cut. AWS chooses ORI (TP Bt10.00), SPALI (TP Bt20.00), MTC (TP Bt73.00), KKP (TP Bt80.00), and TISCO (TP Bt112.00).
5) High Dividend, AWS chooses KKP (Div.Yld.8.7%), TISCO (Div.Yld.7.8%), INTUCH (Div.Yld.5.7%) and RATCH (Div.Yld.4.1%).