Asia Wealth Securities (AWS) released an analysis for the trading session on October 7, 2020, indicating the essential events in the stock market as follows:
AWS expected that the SET today (7 Oct) will have a chance to drop from two negative factors (1) the worsening of COVID-19 after Paris and New York resume tight lockdowns as the number of infections across the city soars and (2) the uncertainty of the U.S. economic stimulus package after the U.S. leader orders to suspend negotiations so this was reflected in the declining U.S. stock markets, as well as, the price of crude oil dropped in this morning which will pressure to the share in the energy sector after raising yesterday (6 Oct). Besides, following the meeting of the Commission on the Thai economy today (7 Oct) on additional stimulus measures for Thailand for the last three months of 2020.
To sum up, AWS’ investment strategy remains the same, focusing on holding more than 50% of cash and stocks in Defensive Stock (Dividend Stock) and DCA stocks based on the Investment Theme.
The uncertainty about issuing the U.S. economic stimulus measures in a new round to cure people and businesses affected by the COVID-19 outbreak of USD2.2tn pressured the overall investment after the U.S. leader ordered the administration to halt negotiations on a new round of stimulus with Democrats and will consider this again as soon as the U.S. presidential election (3 November) will be completed.
Even before this there was a positive signal from the U.S. House of Representatives and the U.S. Treasury Negotiations are in progress which is waiting just to find a conclusion of the measure limit, Democrats are offering USD2.2tn, while the White House administration offered USD1.6tn.
From this issue, AWS viewed it negatively on the overall the U.S. economy and the world economy since in the current situation there is still a need to drive the economy with enough stimulus measures. While the Fed’s monetary policy is insufficient and affects the overall economy less compared to the government’s fiscal tools.
Today, AWS expected the SET Index to move between 1,239-1,260 with the recommended stocks are PTG, PLANB, VGI and TFG
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