Asia Wealth Securities (AWS) released an analysis for the trading session on May 28, 2020, indicating the essential events in the stock market as follows:
Today’s Investment Overview – The SET Index is still volatile in side-way. For investment strategy, AWS recommends investing in stocks that are still in Laggard such as the banking sector, transportation sector (AOT and BEM) and those with clear and specific positive factors in 2H20, especially the theme of the acceleration of disbursement of government investment funds that remains attractive.
Short-term investment still has to be careful about the valuation that starts limited in some sector – However, the investment must start to be cautious about the valuation that started limited after rising more than 3.3% in May, responding to the positive factors of the recovering crude oil prices and the resumption of the domestic economy. As a result of the easing of lockdown measures in the 3rd phase, the share price in the group benefiting from these positive factors has increased until the limited upside, while negative factors from the conflict between the U.S. and China have increased.
The conflict between the U.S. and China pressures the investment overview – The conflict between the U.S. and China, especially the international political problem from the tense situation in Hong Kong that started to increase after the U.S. Secretary reported to the U.S. Congress that Hong Kong is no longer independent from China which is an issue that outweigh international trade issues since in the past, Hong Kong has the privilege of tax exemption exported to the U.S. while the U.S. is still taxed Chinese products exported to the U.S. as a result of the U.S.-China trade war.
Easing lockdown measures will stimulate the economic recovery. – Most recently, England is preparing to open a department store and some businesses on 1 June in accordance with the easing lockdown phase 2, while Germany is preparing to cancel travel warnings to 31 countries in Europe in the middle of this June, including Thailand is ready to return to foreigners to visit in July (a positive factor for AOT). However, investors need to closely monitor the situation of COVID-19 after many countries began to relax the lockdown measures.
EU is preparing to inject EUR750bn in economic remedies – The European Commission (EC), the European Union’s executive organization (EU), has revealed details of the EUR750bn rehabilitation fund consisting of EUR500bn in grants and loans EUR250bn for EU member states to heal the EU’s economy from the effects of the COVID-19 epidemic, especially in Italy and Spain which are most affected.
Technical View – AWS expects the SET Index to move today in a range of 1,334 – 1,357 points (with support at 1,340, 1,334 and 1,323 points and resistance levels at 1,351 1,357 and 1,368 points). The recommended stocks are BDMS, GFPT, KKP, TRUE and BBL.
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