Asia Wealth Securities (AWS) released an analysis for the trading session on April 9, 2020, indicating the essential events in the stock market as follows:
Lack of new positive factors, Expect a short-term volatile SET stock market.
1) Dow Jones and Commodity yesterday – Dow Jones was up 779.71 points (+3.44%), WTI crude oil price increased USD1.46 (+6.2%) and gold price rose 60 cents (+0.04%).
Investment overview today – AWS still looks at the Thai stock market having a chance of fluctuation due to lack of new positive investment factors to support. In addition, the SET increased by 9% in the past week, driven by positive factors both domestic and overseas from (1) economic stimulus measures (2) the COVID-19 situation that is expected to pass the critical point and (3) the recovery of crude oil prices. However, it needs to keep an eye on the OPEC+ meeting about production cuts today (9 April), as well as the announcement of 1Q20 earnings that might return as a pressure on investment.
2) The US Stock market increased from internal factors. Yesterday (8 April), US stock market increased after Mr. Bernie Sanders, Vermont state senator announced the withdrawal from the race to represent the Democrats for the US presidential election. and the release of the Fed’s FOMC meeting doesn’t have more negative signals than the market expected.
3) The overall economy still has a negative signal – WHO reportedly expects the world trade volume will decreased 13%-32% in 2020 due to the impact of COVID-19
4) Follow the OPEC meeting today (9 Apr). AWS still maintains the same view which estimates that if the meeting results that there is a reduction in production capacity in the range of 6 – 10 million barrels. This will only support crude oil prices which will cause crude oil prices to move within the range of USD25-30 per barrel (Crude oil price assumption of USD32.3 per barrel)
5) Economic data this week still has to follow: on 9 Apr (1) The number of Initial Jobless Claims is expected to increase by 5 million people last week, while the previous week was 6.65 million people. (2) The US Producer Price Index (PPI) in March is expected -0.3% from February 2020 at -0.6%. (3) Minutes of the European Central Bank monetary policy meeting / Friday (10 Apr); The US core CPI report for March 2020 is expected to be 0.1%MoM.
Banking Sector – The bank’s 1Q20 net profit is projected at Bt40bn, down 23.0%YoY and 1.7%QoQ. This is a result of lower equity sales and NIM, as well as increased credit costs. AWS estimates that 1Q20 loans QoQ will fall in contrast with the increase in NPLs due to the overall economy affected by COVID-19. Maintain Neutral in Banking Banks with Top Picks, BBL (BUY; TP Bt167.00) KKP (BUY; TP Bt81.00)
Today, AWS expected the SET to be with the range 1,195-1,235 (Support at 1,195 1,184 and 1,175 // Resistance at 1,215 1,224 and 1,235) which the recommended stocks are CK, GUNKUL, KTC, STA, and AEONTS (Follow in the Technical Express analysis).
1) Slightly affected stocks from COVID-19, AWS chooses TU, GFPT, CPF, TFG, BJC, CPALL, and TQM.
2) Down side limiting and strong cash flow, AWS chooses BGRIM, EGCO, GULF, GPSC, and RATCH.
3) Stocks which obtained the benefit from work from home measure, AWS chooses ADVANC, INTUCH, DTAC, TRUE, DIF, and COM7.
4) Stocks for long term investment (DCA), AWS chooses ADVANC, AOT, BDMS, and DIF.
5) Economic stimulus measures and the accelerated disbursement of the government budget for the year 2020, AWS chooses CK, SEAFCO, WHA, KKP, AOT, CPALL, BEM, and HMPRO.
6) Defensive and high dividend, AWS chooses KKP (Div.Yld. 15.9%) QH (Div.Yld. 9.3%) DIF*(Div.Yld 8.2%) TISCO (Div.Yld. 8.7%) INTUCH*(Div.Yld. 6.2%) TTW*(Div.Yld. 4.8%) and RATCH*(Div.Yld. 4.2%) *IAA Consensus