Asia Wealth Securities has made an analysis for the trading session on July 09, 2019 as the following:
Thai Stock Market Today
– The market expects that the Fed will not cut the interest rate in this meeting 30-31 Jul 19, but they still expect to decline in the 19 Sep 2019 and expects that BOT may also use this opportunity to reduce the policy interest rate in the meeting around 25 Sep 19. As a result, Asia Wealth continues to Bullish real estate and power plants although the interest rate cut will be extended.
– Many businesses return to interest such as shipping and coal, as a result of trade wars that are not spreading. BDI rose 52% within 1 month to 1,725 points (-15 points), or -0.86%, DOD according to PSL’s MD&A. Ship supply has decreased considerably due to firstly, IMO2020 measures to speed up the use of new ships And accelerate the removal of old ships. Secondly, the new ship extension has been greatly reduced during the low freight period, which lasts for about 7 years, not attracting new ship operators. Thirdly, The impact of the trade war causes the demand to shrink for a period of time, the more the supply is reduced. From 3 factors, which will enhance the shipping business to outstanding in 2020.
– CPF facing African cholera in heavy pigs in China and Vietnam so Asia Wealth expects this disease affect the feed farm business of CPP HK which has sales accounted for 40% of total sales. CPF, which pork business from CPP HK is expected from 30-36% of total sales so Asia Wealth forecasts it will affect to the fundamental of CPF in 2H19. Asia Wealth recommends “sell” due to the share price meets the target at THB30.0/share.
Pick of the day: PSL (Closed THB9.00; BUY; AWS sets the target price at THB10.50)
Asia Wealth expects the target price of PSL at THB10.50 according to average BDI in 2019 at 1,400 points. In addition, Asia Wealth does the sensitivity analysis, if BDI increase, it will affect to PSL target price, including TTA at different levels. As follows.
PSL is strong in both the short and medium term due to the occurrence of both Daily & Weekly Buy Signal. If monthly price can close above THB8.30, then the Monthly Buy Signal will resume and the main trend will return to be fully uptrend. The first target is THB10.70 and the next target is THB14.40 baht respectively. PSL has a short-term stop loss at THB8.60. Asia Wealth sets the resistance: 9.05, 9.15, 9.25; ,and support: 8.90, 8.80, 8.70).
Foreign Market: US stock market
The Dow fell 115.98 points or -0.43%, while the S & P 500 index fell 14.46 points or -0.48% and the Nasdaq fell 63.41 points or -0.78%, being pressured by the fall of Apple’s stock. After analysts have lowered the investment rating of Apple’s shares while Boeing’s shares plunged after Saudi airlines canceled orders for Boeing 737 Max aircraft.
In addition, the market also received negative factors as investors cut expectations about the Fed’s interest rate cut on the July 30-31 meeting after the US Department of Labor reported that Non-farm payrolls rose 224, 000 positions in June, the highest level in 5 months, and more than analysts had expected to increase 165,000 positions. Mr. Powell is scheduled to speak to the Financial Services Commission of the House of Representatives on 10 July and will announce to the Senate Banking Commission on 11 July.
Commodities: Crude oil prices
WTI for August delivery rose 15 cents, or 0.3%, to close at $57.66/barrel; Brent for September delivery fell 12 cents, or $0.2, to close at $64.11/barrel.
Crude oil prices have been driven by tensions between the United States and Iran after Iran enriched uranium enrichment above the ceiling specified in the nuclear agreement. However, trading conditions are volatile because investors are still worried that the global economic slowdown may affect oil demand.