Asia Wealth Securities (AWS) released an analysis for the trading session on October 9, 2020, indicating the essential events in the stock market as follows:
The overall investment today – AWS expects the SET today (9 Oct) to maintain a positive sentiment from the expectation of economic stimulus measures, including a recovery in crude oil prices from hurricane season impact (recommend only speculation).
However, AWS believes that the SET Index remains vulnerable from economic uncertainty from the latest MPC meeting that remains concerned about purchasing power in the long run after the labor market has been greatly affected, including domestic political factors (student meeting next week (14 Oct).
AWS investment strategy remains the same by focusing on holding more than 50% of cash, AWS recommends investing in stocks with unique positive factors (Short-term speculation) includes (1) increase in oil prices (PTT, PTTEP, TOP and PTTGC) and (2) stocks that benefit from government stimulus measures, such as TU, JMART, COM7, CBG and OSP, as well as accumulating for long-term investment in Defensive Stock (Dividend Stock) and DCA Stocks based on AWS Theme Investment.
Crude oil prices have been positively reactive to the U.S. hurricane impacts – Latest data (8 Oct) from the Bureau of Safety and Environmental Enforcement (BSEE) on the effect of “Hurricane Delta” to energy companies’ operations in the Gulf of Mexico that suspended approximately 91.5% of crude oil production and 61.8% of natural gas production in the Gulf of Mexico, as well as Saudi Arabia is considering postponing plans to push OPEC+ to increase production to the end of 1Q21 from what it was originally planned to do in early 2021, AWS looks positive for the energy sector, recommend short-term speculation.
AWS chooses PTT, PTTEP, PTTGC and TOP.
The latest MPC meeting report that the Thai economy gradually recovered – (1) oversea economy, trade partners’ economies tend to recover gradually but there is a lower than expected expansion from COVID-19 that may become more severe until many countries come back to the strict city lockdown again. While the stability of the world financial system is fragile and the trade protectionism between the U.S. and China.
(2) The financial market, the volatility of the money market has stabilized from the previous meeting. But still need to monitor the development of important events, including the negotiations for separating Britain from the European Union and the election of the U.S. leaders.
(3) The Domestic economy, the Thai economy is gradually recovering according to relaxation, lockdown in Thailand and the gradual recovery of economic activities around the world, but overall, it is much lower than before the outbreak, especially in the export sector of goods and services.
(4) The Monetary Policy Implementation, there is a tendency to gradually recover following relaxation and the gradual recovery of global economic activity, with a slight contraction in 2020 from the original forecast and in 2021, while the recovery is likely to expand at a slower rate than the previous estimate according to the number of foreign tourists that are likely to recover slowly.
Another theme is the prospective labor market recovery is still fragile so it could affect the long term growth potential of the economy so that the impact will reflect a decline in domestic purchasing power in the long term.
Technical View – Today, AWS expects the SET Index to move between 1,258-1,286. The recommended stocks are GULF, NER, ADVANC, SMT and SAMART.
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