Asia Wealth Securities (AWS) released an analysis for the trading session on October 2, 2020, indicating the essential events in the stock market as follows:
The overall investment today – AWS expects the SET today (2 Oct) to remain volatile in a side-way to side-way down manner since new positive factors from U.S. economic stimulus measures still have to wait for clarity. While the risk of uncertainty of many factors still depresses economic recovery.
This is reflected by the continued decline in crude oil prices which is a negative factor for stocks in the energy sector today. AWS investment strategy remained the same, focusing on holding more than 50% of cash and investing in Laggard play, Defensive Stock (Dividend Stock) and DCA stocks based on AWS Theme Investment.
Concerns about the COVID-19 situation still depressing crude oil prices – WTI crude oil contract yesterday (1 Oct) fell USD1.50 (-3.7%) to the lowest in 2 weeks on concerns that continue to increase the situation of the COVID-19 epidemic, especially in Europe, pressuring the overall economic recovery and it will affect global oil demand, despite the positive factors yesterday, according to a report by the U.S. Energy Information Administration (EIA) that U.S. crude reserves fell 2 million barrels last week (ending 25 Sep), with a third consecutive week decline and contrary to analysts’ estimate of 1.9 million barrels increase.
The Fed maintains that the U.S. commercial banks have strong capital – The Federal Reserve Board (Fed) says that big commercial banks still have capital positions that remain strong. This is consistent with the results of the annual stress test and additional analysis announced in June 2020 that all large financial institutions maintain adequate capital funds.
In addition, they announced an extension of measures to monitor the capital strength of large commercial banks for another quarter (ending 4Q20) due to economic uncertainty. It still bans commercial banks with assets of USD100bn to have the share repurchase and sets a ceiling for dividends to be in line with income during the past.
However, the Fed will continue to conduct the second round of stress tests and will be announced at the end of 2020.
Technical View – Today, AWS expects the SET Index to move between 1,220-1,263. The recommended stocks are SPRC, PTTGC, SAWAD, BLA and KTC.
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 tourists measure (Short term trading 1-3 months) – AOT, AAV, BA, ERW, M, CENTEL, MINT, WHA and AMATA
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