Asia Wealth Securities (AWS) released an analysis for the trading session on August 25, 2020, indicating the essential events in the stock market as follows:
Investment Overview Today – AWS expects the SET Index to continuously receive a positive sentiment on the ongoing progress of vaccine development. Yesterday (24 Aug), share prices in the aviation and hotel businesses increased such as AOT (+5.09%) MINT (+7.35%) ERW (+3.77%) CENTEL (+3.88%), which has been a positive factor from progressing in vaccine development and government measures prepared to open to foreign tourists on 1 October, starting in Phuket, including Hurricane Season in the U.S. that affected petroleum production in the Gulf of Mexico which still be a factor supporting stocks in the energy sector (only for the short-term).
Concerns about the COVID-19 situation continued relaxation – AWS offers Theme Investment, stocks that benefit from vaccine developments in the near future (short-term trading 1 month). In the past 1 – 2 days, there has been progress in vaccine development, causing the market to expect to see success faster than expected. Recently, the Food and Drug Administration (FDA) has approved the use of plasma containing immune proteins. (Convalescent Plasma) in the treatment of COVID-19 patients by therapeutic plasma received donations from people who have been ill with COVID-19, but they were completely healed. Plasma therapy can reduce COVID-19 mortality by 35%. In addition, WHO’s COVAX program is a fundraising program for the purchase of COVID-19 vaccine to ensure that member countries have access to effective and safe vaccines. There are currently 172 member countries participating.
This week, the most interesting issues are Fed President’s statement on Thursday night – The Federal Reserve’s annual meeting in Jackson Hole between 27-28 August which will be styled as a dialogue via video conferencing “Navigating the Decade Ahead: Implications for Monetary Policy,” an interesting point in the Fed’s keynote address to show a vision of the Fed’s monetary policy and the U.S. economic outlook. Earlier this week, the Federal Reserve released the minutes of the Federal Reserve’s Monetary Policy Committee (FOMC) meeting from 28-29 July, with the Federal Reserve having a negative view for the expansion of the U.S. economy on the risk of an epidemic of COVID-19. While the economic recovery trend depends on the development of the COVID-19 epidemic, which is still highly uncertain so it leads to a review of the long-term policy framework adjustment and that the Yield Curve target measures may not be appropriate for the current situation, also, Fed President Jerome Powell is scheduled to deliver a speech on 27 August at 9:10 am (U.S. time) or 8:10 pm (Thai time).
Hurricane Season in the U.S. is a contributing factor to the short-term energy group – the Bureau of Safety and Environmental Enforcement (BSEE) reports that Hurricane Marco and Tropical Storm Laura is moving through the Gulf of Mexico. As a result, 114 of the 643 rigs ceased operations, accounting for 57.6% of oil output (approximately 1.1 million barrels per day) and reduced natural gas production by 44.6% (approximately 1,205 million cubic feet per day) of total capacity in the Gulf of Mexico which oil production and gas production in the Gulf of Mexico, it accounts for 17% and 5% of the U.S. oil and gas production. AWS estimates that the issue is the only short-term positive sentiment to investing in energy businesses (PTT, PTTEP, TOP, BCP, IRPC, SPRC, and PTTGC). It is also positive for gas prices (Henry Hubs) in the U.S., with the latest Henry Hubs price of USD2.52 per million BTU, positive for BANPU.
Today’s key economic statistics report – Germany will report GDP for 2Q20 (expected dropped 11.7%YoY and 10.1%QoQ), Germany’s IFO Business Climate Index in August (Expected 92.2), German Current Assessment August (expected 87.0) and German Business Expectations in August (Expected at 98.6)/ The U.S. will reports the CB Consumer Confidence in August (Market expected at 93.6) and the New Home Sales in July (Market expected to increase 750,000 units, + 4.0%MoM).
Technical View – Today, AWS expects the SET Index to move between 1,305 – 1,330 points. (Support at 1,312 1,305 and 1,293 points and resistance at 1,323 1,330 and 1,343 points). The recommended stocks are CENTEL, RBF, AOT, KCE and MAJOR.
1) Benefit from a successful vaccine development in the near future (Short term trading 1 month) – AOT, AAV, BA, ERW, M, CENTEL and MINT
2) Benefit according to the season (Short term trading 1-2 months) – BGRIM, CKP and GPSC
3) Benefit from the stimulus package (Short term trading 1-3 months) – CPALL, CRC, HMPRO, BJC, OSP, CBG, MTC, CK, BEM, SEAFCO, PYLON, TASCO, COM7 and WHA
4) Dividend Play (Middle term investing 6-12 months) – KKP, TISCO, QH, LH, ORI, NOBLE, DIF, INTUCH, HANA, EASTW, TTW, EGCO and RATCH
5) Long-term cumulative shares (DCA) (Investing more than 1 year) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and PTT