Asia Wealth Securities (AWS) released an analysis for the trading session on May 26, 2020, indicating the essential events in the stock market as follows:
Investment Overview Today – SET still has a chance to fluctuate but there is a positive factor in the country from phase 3 easing lockdown measures as a supporting factor which causing us to still believe that the SET still has a chance to increase, while the foreign factors have both positive and negative, the positive factor comes from expectations of a successful COVID-19 vaccine development in the near future, but there are still negative factors from the growing conflict between the U.S. and China from the political issue and international trade.
Phase 3 lockdown easing is still an investment supporting factor – 26-27 May (26 May, working group meeting / 27 May, consider relaxation). We will has clear details regarding phase 3 easing lockdown measures before the EPC meeting for approval on 29 May, with approval of an extension of the Emergency Decree to 30 June (entered into the cabinet for approval on 26 May). AWS expects that (1) the firms or activities that are relaxed in phase 3 will be in a group with a moderate to high risk of infection and (2) curfew time reductions from 23.00 to 4.00 am of the next day
BAM, AWC and KTC are calculated in the MSCI Thailand Index – Thai MSCI Rebalance has been reduced from 2.39% to 2.36% / MSCI Thailand Index: (1) the imported stocks are BAM, AWC and KTC. (2) the stocks which overweight are BTS, MTC and RATCH. (3) The stocks which underweight are GULF, CPALL, PTT, EA and SCC and (4) the stock that is out of the calculation is BANPU which effected on 29 May 2020 at the closing price.
China’s Council Meeting (until 28 May) has an interesting Digital Yuan and Food Security issues – National People’s Congress (NPC) meeting yesterday had interesting issues (1) Digital Yuan which brings 4 major currencies in Asia are Japanese Yen, South Korean Won and Hong Kong Dollar. Currently, China is starting to use Digital Yuan in some cities, such as Shenzhen, Suzhou, Chengdu and Song An, and (2) Food Security, which will affect Thai food exports in the long term and (3) China cancels the 2020 GDP target set due to risk factors that are not uncertainty. However, the IMF still estimates Chinese GDP in 2020 to grow by negative 1% and increase to 8% -9% in 2021.
The risk of investment pressures comes from the conflict between the U.S. and China, which from political problems and international trade.
Technical View – AWS expects the SET index to move today in a range of 1,316 – 1,336 points (with support at 1,316 1,308 and 1,295 points and resistance at 1,328, 1,336 and 1,350 points). The recommended stocks today are SPALI, CPN, CK, PTG, and KCE. (Please follow details in Technical Express)
1)Stocks which obtain the benefit from relaxing lockdown phase – AWC, CRC, CPN, BTS, BEM, HMPRO, GLOBAL, DOHOME, M, AU, 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