Asia Wealth Securities (AWS) released an analysis for the trading session on May 27, 2020, indicating the essential events in the stock market as follows:
Investment Overview Today – The SET is likely to be highly volatile. AWS believes that the SET has a chance to go forward but may have to be cautious about short-term profit-making. The SET in May 2020 increased by 2.6% and increased by more than 30.4% compared to the low in mid-March. Positive factors supporting the market are (1) the increase in crude oil prices and (2) the group that benefits from the acceleration of disbursement of the government investment (Theme Investment). However, it must be cautious about Sell on Fact from stocks in the group that have risen due to individual positive factors but the short-term fundamentals remain weak.
The strong increase in crude oil prices reinforces the theme of crude oil prices recovering – Crude oil prices have also been positive due to reducing concerns over excess supply after Baker Hughes reported that the number of oil and gas rigs in the U.S. fell to the lowest level in 80 years as well as reduced production capacity under the OPEC+ agreement.
Low disbursement of investment budget is expected to accelerate disbursing during the rest of the year. This sends a positive sentiment to the Construction and Construction Materials sector. – The Comptroller General’s Department revealed the expenditure budget in 2020 (1 Oct 2019 – 15 May 2020) total disbursement of Bt2.12tn, representing 66% of total budget still disbursed below the target of just Bt94.4bn, accounting for 49% of the budget. AWS’s analysts see it as the positive for the construction and construction materials sector from expediting disbursement of the budget within the time frame of the fiscal year, which will accelerate the bidding for infrastructure projects, such as the Western Orange Line project, the MRT Purple Line project, and road construction and improvement projects. AWS recommended shares are CK, STEC, SEAFCO, PYLON and TASCO.
Phase 3 lockdown mitigation measures will be asked for approval on 29 May, effective on 1 June – Investment strategy, AWS advises to be cautious of a Sell on Fact in stocks that benefit from the easing city lockdown measures in accordance with AWS theme investment, especially CPN (8.2%), M (3.8%), AU (3.8%), DOHOME (1.8%), and AWC (1.7%) that have strengthened strongly in the past week (Return of the Theme Investment portfolio in the past week was at 14.6%). AWS recommends gradually making short-term profits within the week. Clear details will be presented at the OCPB meeting for approval on 29 May, beginning with the third phase relaxation on 1 June.
Technical View – AWS expects the SET Index to move today in a range of 1,325 – 1,350 points (with support at 1,331, 1,325 and 1,318 points and resistance levels at 1,337 1,343 and 1,350 points). The recommended stocks are ESSO, KBANK, BJC, BH and MINT.
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)Accelerate the disbursement of government investment budget- CK, STEC, SEAFCO, PYLON and TASCO
4)Stocks that benefit from entering rainy season – BCPG, BGRIM, CKP, GPSC, and EASTW
5)Stocks that benefit from government measure – ADVANC, BTS, BEM, CPF, CPALL, BJC, CRC, CPN, PLANB, HMPRO, OSP, and CBG
6)Long-term cumulative shares (DCA) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and HMPRO
7)SSFx target stocks – PTT, PTTEP, BJC, CPALL, AOT, GULF, EGCO, INTUCH, ADVANC, BAM, and BDMS