Asia Wealth Securities (AWS) released an analysis for the trading session on September 3, 2020, indicating the essential events in the stock market as follows:
Investment Overview Today – AWS expects the SET Index today (3 Sep) to be volatile despite the positive factors from the economic stimulus measures which will have a positive effect on aviation, hotel and consumer stocks. The price of crude oil dropped after the increase in the Gulf of Mexico oil production in the U.S. AWS has a negative view on energy and petrochemical stocks today (3 Sep). AWS weighs our Theme Investment stocks, especially those in the sector that is driven by stimulus measures.
Crude oil prices dropped after an increase in oil production in the Gulf of Mexico in the U.S. AWS looks negative on energy and petrochemical stocks today (3 Sep) – Bureau of Safety and Environmental Enforcement (BSEE) said crude oil production in the Gulf of Mexico had begun to resume production. The latest report of crude output in the Gulf of Mexico is dropped 19.7% less than a recent report on 27 Aug, which said crude production fell as much as 84% due to the influence of Hurricane Laura. The negative factor overshadowed the positive of decline in crude reserves for the sixth consecutive week, according to the U.S. Energy Information Administration (EIA), which said U.S. crude reserves fell 9.4 million barrels last week (ended 28 Aug). The drop was more than analysts had expected of 1.2 million barrels.
3 economic stimulus measures will enhance the Aviation, Hotel and Consumer sector – SSC has approved measures to stimulate the economy as proposed by the Ministry of Finance, including (1) measures to stimulate domestic consumption in the amount of Bt45.0bn to reduce the cost of living of the people and promote consumption and help small entrepreneurs in general by the government to help pay 50% of the limit up to Bt3,000 per person. (2) Employment measures for new graduates: The state pays to employers for a period of 1 year from Oct 2020- Oct 2021 to support the employment of new graduates in 3 groups, including bachelor’s degree, vocational certificate and vocational certificate, totaling 260,000 rates, with an amount of Bt23.0bn. and (3) stimulate additional domestic tourism under the project “We travel together” is divided into two ways: there is an additional right to registrants and a 2 day additional day off to government officials, employees and state enterprise employee without being considered a leave when registering and exercising the right to the package we travel together to promote travel on weekdays. AWS looks positively on our theme investment stocks, including AOT, AAV BA, ERW, CENTEL, MINT CPALL, CRC, OSP, CBG, MTC, BEM, COM7 and WHA.
The U.S. economic report is in good shape – The U.S. Department of Commerce reports that the U.S. factory orders rose 6.4% in July, better than expected driven by government easing of lockdowns after the previous economy was shut down to stem the spread of the COVID-19.
Today’s key economic statistics report – Japan will report the Services Purchasing Managers Index for August. // China will report the Caixin Institute PMI in August.// Europe will report the Services Purchasing Managers Index in August (expected to grow at 50.1), the Total Purchasing Managers Index from Markit in July (expected to expand at 51.6) and the Retail Sales Index in July (expected to drop 0.5%YoY, but increased 1.5%MoM).// UK will report the Services PMI in August (expected to expand at 60.1) and the Composite PMI in August (expected to expand at 60.3).// German will report the German Services PMI in August (expected to expand at 50.8) and the German Composite PMI in August (Expected to grow at 55.5). // The U.S. will report the Exports, Imports and the Trade Balance for July (Expected to have a deficit of USD523.0), the ISM Services PMI in August (expected to expand at 57.1), the Services PMI Markit, the Markit Composite PMI in August and the number of Initial Jobless Claims.
Technical View – Today, AWS expects the SET Index to move between 1,307 – 1,325 points. (Support at 1,312 1,307 and 1,297 points and resistance at 1,320 1,325 and 1,335 points). The recommended stocks are MINT, DOHOME, AMATA, BEC and TKN.
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