Asia Wealth Securities (AWS) released an analysis for the trading session on March 11, 2020, indicating the essential events in the stock market as follows:
1) The Dow stock market rose by 1,167.14 points (+4.89%). WTI crude oil price increased by USD3.23 (+10.4%) and gold price dropped by USD15.40 (-0.92%).
2) Stock markets return with hope to the stimulus measures of each country. Recently, the US prepares to implement economic recovery measures, especially payroll tax reduction and other urgent measures to reduce the effects of the outbreak of COVID-19 virus to propose to Congress to approve the said measure.
3) Thailand’s economic stimulus measures in 4 areas as follow: (1) Financial measures such as low-interest loans, principal suspension, reduce interest, extend repayment period and assistance to affected debtors. (2) Tax measures reduce withholding tax to 1.5% (previously 3%) and expedite VAT refunds. (3) Other aid measures include reducing electricity bills, reducing money into the Social Security Fund and accelerating the disbursement of the government budget, including deduction of purchase of investment units in Super Savings Fund (SSF).
4) Crude oil prices are still worrisome – even though Russia may signal a return to negotiate with the oil exporting countries (OPEC) again to stabilize the market, but OPEC, led by Saudi Arabia, will not be interested, but will still increase production in April 2020, including OPEC members such as Iran which is the world’s 4th largest crude oil producer, announced a reduction in crude oil export prices and increase production capacity like Saudi Arabia as well to maintain market share.
5) Iraq has announced to reduce the price of OSP Premium crude oil to every grade of crude oil which will be sold in Asia. The Basra Light crude oil price reduced by USD3.20 and the Basra Heavy crude oil reduced by USD5.30.
The investment strategy for energy and petrochemical stocks. AWS recommends short-term trading on TOP, SPRC, IRPC and IVL, but still recommends avoiding PTTEP.
Today, AWS expects the SET to be within the range of 1,259 – 1,298 points (with support at 1,259 1,245 and 1,232 points and resistance levels at 1,285 1,298 and 1,311 points).
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, AWS chooses CPF (TP Bt33.00).
4) Interest rates cut. AWS chooses ORI (TP Bt9.00), 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.8.9%), QH (Div.Yld. 7.5%) TISCO (Div.Yld. 6.1%) BAFS (Div.Yld. 4.1%) and RATCH (Div.Yld. 4.1%)