Asia Wealth Securities (AWS) released an analysis for the trading session on September 24, 2020, indicating the essential events in the stock market as follows:
The overall investment today – AWS expects the SET Index today (24 Sep) to move side-way to side-way down due to the lack of new positive supporting factors. While the MPC meeting had no new positive factors despite the 2020 GDP revision shrinking less than original estimates, the recovery still has some risks.
As a result, the GDP forecast in 2021 remains downward, as well as negative factors from the depreciation of Thai baht from the indirect impact of the depreciation of the euro and pound.
Therefore, AWS maintains the same investment strategy, focusing on holding more than 50% of the cash and chooses to invest in Laggard play, Defensive Stock (Dividend Stock) and DCA based on our Theme Investment.
Progress on vaccine development may not bolster investment – Johnson&Johnson (J&J) is the fourth company in the U.S. to begin testing the final phase of the COVID-19 vaccine (three companies: Moderna, Pfizer, AstraZeneca) which has up to 60,000 volunteers (aged 18 and over) will be participating in the program in the U.S., South American and South Africa.
However, AWS thinks the market weighs down on these issues to a lesser extent after the previous three companies started testing the vaccine in Phase 3, but no progress has yet been made.
The price of gold is still sold from the strength of the dollar – the gold prices fell more than USD39.2 an ounce (-2.05%) last night (23 Sep) due to a strong dollar which in this week, the Dollar Index gained more than 1.5% on the back of the euro and the 1.56% pound against the dollar. (Euro and pound weigh 69% on the Dollar Index), which was affected by the COVID-19 situation in which the number of infected people continued to increase.
Including the appreciation of Dollar Index also influences other currencies, including the Thai baht. From these points, it will harm the overall durability.
The MPC maintains interest rates with a better outlook on the Thai economy in 2020 – The Monetary Policy Committee (MPC) resolved to maintain interest rates at 0.5% per year and adjust GDP for 2020 from previously expected to shrink 8.1% to shrink 7.8% which was slightly better than the estimate because the impact from the lock-down measure was less than expected from the use of government measures.
However, the COVID-19 situation is still uncertainty so it will affect the foreign sector with the MPC estimates that the number of foreign tourists in 2021 will be 9 million, including high uncertainty from many risk factors, making the MPC assess that the Thai economy in the year 2021 will return to expand at 3.6% (previously expected 5.0%).
Technical View – Today, AWS expects the SET Index to move between 1,259 – 1,277 points. (Support at 1,259 1,254 and 1,247 points and resistance at 1,265 1,270 and 1,277 points). The recommended stocks are DOHOME, PTG, HANA, RBF and AEONTS
1) Laggard Stocks (Short-term Trading within 1 month) – BAM, BDMS, BEM, CPALL, GPSC, MTC and WHA
2) Benefit from a successful vaccine development and opening countries to receive tourist measure (Short term trading 1-3 months) – AOT, AAV, BA, ERW, M, CENTEL and MINT
3) Benefit according to the season (Short term trading 1-2 months) – BGRIM, CKP and GPSC
4) 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
5) Dividend Play (Middle term investing 6-12 months) – KKP, TISCO, QH, LH, ORI, NOBLE, DIF, INTUCH, HANA, EASTW, TTW, EGCO and RATCH
6) Long-term cumulative shares (DCA) (Investing more than 1 year) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and PTT