Asia Wealth Securities (AWS) released an analysis for the trading session on August 11, 2020, indicating the essential events in the stock market as follows:
Investment Overview Today – AWS expects the SET to recover in a side-way after obtaining the positive factors, the U.S. government prepares to consider the ways of negotiations in Congress again about the issuance of economic stimulus measures, including the expectation of the economy to recover and Iraq oil output cuts are a positive sentiment to crude prices.
However, AWS recommends short-term speculation only. The risk that is a factor that depresses the overall investment is the conflict between the U.S. and China, which lasted, the Chinese authorities have boycotted U.S. politicians in order to retaliate for the U.S. government that has announced the boycott of Chinese and Hong Kong officials.
Investment Strategy, AWS selects stocks that are expected to have outstanding performance which are CPF, TU, OSP, STA, STGT, COM7 and PTG, and recommends short-term speculation in the energy sector which are PTTEP and PTTGC as our top picks.
The crude oil prices recover in a short term, AWS suggested only speculation – The crude oil prices have recovered after a positive factor from (1) the U.S. economic stimulus measures which announced at the end of last week including the stance of the U.S. government which ready to negotiate with leaders in Congress again after two sides were unable to reach an agreement on the U.S. stimulus package last week and (2) Iraq cut another 450,000 barrel per day cut of oil output in August and September to compensate for the oil quota exceeded in the previous three months. However, AWS looks at only short-term positive factors.
Therefore, AWS recommends short-term speculation, AWS chooses PTTEP (Trading, TP Bt110.0) and PTTGC (Buy, TP Bt58.0).
The key economic statistics for the U.S. and China recover – China National Bureau of Statistics (NBS) reported the Producer Price Index (PPI) which is a measure of cost of goods in front of the factory, dropped 2.4%YoY in July which was less than 3% lower than in June as China’s economic activity began to recover. The Chinese government has issued effective measures to control the epidemic, while the U.S. Department of Labor Statistics reported the job openings and labor turnover (JOLTS) survey which found that the job openings rose 518,000 jobs to 5.9 million in June and the job openings rate rose to 4.1% from 3.9% in May.
Today’s key economic data – Japan announces the key economic data which are the Current Account in June (expected surplus of JPY110.0bn) / Europe announced significant economic data which are the Claimant Count Change in the UK in June (Expected to increase 250 thousand people), the Average Earnings Index + Bonus June (Expected to drop 1.2%), the Unemployment rate in June (expected to increase at 4.2%) / The U.S. announced key economic data which are the Producer Price Index (PPI) in July, which is expected to drop 0.2%YoY but increased 0.3%MoM and the Core PPI in July, expected to increase 0.4%YoY and 0.1% MoM.
Technical View – Today, AWS expects the SET Index to move between 1,317 – 1,332 points. (Support at 1,320 1,317 and 1,311 points and resistance at 1,324 1,327 and 1,332 points). The recommended stocks are JMT, SPALI, RBF, RS and ORI.
1) Benefit from the stimulus package – CPALL, HMPRO, BJC, OSP, CBG, TTW and MTC (Phase 1 stimulus package), AOT, AAV, BA, ERW and MINT (Tourism stimulus package), CK, BEM, STEC, SEAFCO, PYLON and TASCO (disbursement of government budget)
2) Stocks that benefit from entering the rainy season – BCPG, BGRIM, CKP, GPSC and EASTW
3) Dividend Play – KKP, TISCO, QH, LH, ORI, NOBLE, DIF, INTUCH, HANA, EASTW, TTW, EGCO and RATCH
4) Long-term cumulative shares (DCA) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and HMPRO