Daily Strategy for Investors on May 15, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on May 15, 2020, indicating the essential events in the stock market as follows:

 

Investment overview today 

AWS still believes that the SET is likely to recover from  (1) phase 2 of easing the city lockdown measures (consideration and approval today) (2) the recovery of crude oil prices due to lower supply concerns and (3) The better than-expected 1Q20 earnings results, despite there being some risk factors, AWS believes that the above positive factors are positive sentiments for investment today.

Foreign risk factors that need to be monitored are the conflict between the US and China, including the COVID-19 situation in foreign countries after implementation of mitigation measures.

– A report from the IEA estimates that global crude oil reserves will fall by 5.5 million barrels per day during 2H20, while AWS is currently seeing a reduction in crude oil production capacity in many countries.

Also, the latest information of crude oil reserves in Kuching, Oklahoma (WTI delivery point) shows a 3 million barrels drop last week (to 62.4 million barrels), causing the market to reduce concerns of oversupply. AWS is optimistic about PTTEP, PTT, TOP, BCP, SPRC, and PTTGC (Investment Theme – Crude oil prices recovering).

– Today (15 May), The Center for COVID-19 Situation Administration is likely to consider and approve measures to ease the city lockdown phase 2. – AWS looks at the possibility of approving the principle, thanks to improvement of COVID-19 in the country. AWS is optimistic about CPALL, AWC, CRC, CPN, BTS, BEM, HMPRO, GLOBAL, DOHOME, SCC, and COM7 (Investment Theme – Relaxing Lock-down City Phase 2).

– It needs to monitor the situation of COVID-19 in the US. If the number of people infected after opening the economy, there is an opportunity to see the Fed using a negative interest rate. – The latest situation in the number of people infected in the US continued to increase by an average of 25,000 to 30,000 people per day, causing the market to worry that if the economy returns prematurely, it may lead to a more severe epidemic. These factors might outweigh the Fed to use the negative interest rate, although the recent Fed president confirmed that the policy is not appropriate for the US.

– The conflict between the US and China will be a limiting factor for the upside in this round – Currently, the US Senator proposes the draft law to the president for choosing sanction measures with China. AWS estimates that these factors will cause severe conflicts between the US and China, including more difficult trade negotiations.

 

Technical view

AWS expects today, the SET index moves in a range of 1,268 – 1,288 points (with support at 1,275 1,268 and 1,260 points and resistance at 1,282, 1,288 and 1,296 points). The recommended stocks today are HMPRO, CHG, BPP, SUPER, and SCC. (Please follow details in Technical Express)

 

Theme Investment

1)Stocks which obtain the benefit from relaxing lock down phase 2- CPALL, AWC, CRC, CPN, BTS, BEM, HMPRO,GLOBAL, DOHOME, SCC and COM7

2)Recovery of crude oil price – PTTEP, PTT, TOP, BCP, SPRC and PTTGC

3)Stocks that benefit from entering rainy season – BCPG, BGRIM, CKP, GPSC and EASTW

4)Stocks that benefit from government measure – ADVANC, BTS, BEM, CPF, CPALL, BJC, CRC, CPN, PLANB, HMPRO, OSP and CBG

5)Long-term cumulative shares (DCA) – ADVANC, AOT, BDMS, BEM and DIF

6)SSFx target stocks – PTT, PTTEP, BJC, CPALL, AOT, GULF, EGCO, INTUCH, ADVANC, BAM and BDMS