Asia Wealth Securities (AWS) released an analysis for the trading session on March 19, 2020, indicating the essential events in the stock market as follows:
1) Dow Jones fell 1,338.46 points (-6.30%), WTI crude oil price dropped USD6.58 (-24%), and gold price declined USD47.9 (-3.14%).
2) The situation of the COVID-19 virus is still in crisis. The latest data on 18 March, there are 218,663 people infected (8,943 deaths), while there are no reports of additional infections or deaths found in China. According to the National Center for Biotechnology Development, they indicate Favipiravir, a new strain of influenza that has been used in Japan, is an effective drug for treating people with COVID-19.
3) The European economy is likely to decrease by 5% (assuming country closing measures for 3 months)
4) Recently, the ECB launched a Pandemic Asset Program by using Quantitative Easing (QE) worth EUR750bn. AWS expects this might decrease the impact on regional stock markets, including Thai stock market today (19 March).
5) Crude oil prices dropped yesterday (18 March) as a result of concerns over the expected supply, while the impact of the closing measures in the US and Europe will cause the short-term crude oil demand to decrease by 2-4 million barrels per day.
6) AWS still has the same view as previously presented (18 March), AWS believes it will be a negative factor for the upstream energy sector (PTT and PTTEP), while the refinery will gain little benefit. Although the GRM will recover from the reduction of export prices of crude oil in countries in the Middle East, the current GRM declined to reflect the weak fundamental demand for crude oil.
AWS expects the SET to move within the range of 1,025 – 1,073 points (with support at 1,025 1,002 and 976 points and with resistance at 1,050 1,073 and 1,099 points).
AWS’s investment strategy recommends investing in our theme investment from the least affected stocks from COVID-19 (antiviral stocks….COVID-19) and high dividend shares.
1) Antiviral stocks . COVID -19, AWS chooses TU (TP Bt18.40) GFPT (TP Bt12.00) CPF (TP Bt33.00) TFG*(TP Bt5.35) BJC*(TP Bt48.00) CPALL (TP Bt85.00) and TQM*(TP Bt69.00). 2) Accelerate the disbursement of the government budget in 2020. AWS chooses CK (TP Bt22.00), SEAFCO (TP Bt7.30), WHA (TP Bt4.20), and KKP (TP Bt80.00).
3) Government stimulus measures, AWS chooses AOT (TP Bt79.00) CPALL (TP Bt85.00) BEM (TP Bt12.50) and HMPRO (TP Bt19.00).
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.11.3%), QH (Div.Yld. 8.7%), DIF (Div.Yld 8.2%), TISCO (Div.Yld. 7.9%), BAFS (Div.Yld. 5.6%), RATCH (Div.Yld. 5.5%) and ADVANC (Div.Yld. 4.8%) *IAA Consensus