Asia Wealth Securities (AWS) released an analysis for the trading session on October 14, 2020, indicating the essential events in the stock market as follows:
AWS expected the SET today (14 Oct) to fluctuate and move sideways based on (1) domestic political factors. Although AWS believed it will weigh negatively less than the previous rally (2) uncertainty in the new U.S. stimulus package after it was reported that the President of the U.S. House of Representatives has rejected the USD1.8tn offer of the white house. It is estimated that this limit is insufficient to mitigate the effects of COVID-19 and (3) concerns about disrupted vaccine development as a negative sentiment to the economy and the price of crude oil.
AWS looked negative for energy stocks, except for the Coal Sector (BANPU) from the seasonal demand in the power generation sector and the short supply of coal in China. AWS’ investment strategy also recommends selective stocks with unique positive factors, especially stocks in the groups that benefit from government measures (Shop Dee Mee Kuen, Kon La Krung / Teaw Duai Gun) Double the tax deduction (from Bt15,000 to Bt30,000) increase time of shopping (23 Oct – 31 Dec). The benefits include travel group, consumer group (retail group and food group), ICT, transportation, finance and advertising businesses following the investment theme.
The International Monetary Fund (IMF) released its World Economic Outlook Report at its annual meeting with the World Bank yesterday (13 Oct). It is forecast that the world economy will shrink 4.4% in 2020 (previously projected shrinking 4.9%), but lower the 2021 world economic growth forecast to 5.2% (previously expected at 5.4% in June) and warns the global economic recovery continues to face uncertainty.
The revision of the world economy forecast in 2020 was driven by better than expected expansion of the Chinese economy and economies in developed countries in 2Q20, as well as signs of a rapid recovery in 3Q20. China is still the only country among large economies that continued to expand 1.9% in 2020, in line with previous World Bank reports. This is expected the Chinese economy in 2020 will expand 1.6%, while the Indian, U.S. and Eurozone economies, the IMF is expected to contract in 2020 to 10.0%, 4.3% and 8.3% respectively, while the IMF world trade volume is expected to contract 10.4% in 2020, before expansion in 2021 at a rate of 8.3%.
Today, AWS expected the SET Index to move between 1,255-1,285 with the recommended stocks are BPP, BLA, SONIC and WHAUP.
1) Benefit from a the government measures (Shop Dee Mee Kuen, Kon La Krung and Shop Dee Mee Kuen, Kon La Krung) (Short term trading 1-3 months) – BEM, MINT, WORK, VGI, PLANB, CRC, DCC, BJC, CPALl, JMART, COM7, HMPRO, MAKRO, MTC, KTC, OSP and M
2) Laggard stocks (Short term trading 1 month) – BAM, BDMS, BEM, CPALL, GPSC, MTC and WHA
3) Dividend Play (Middle term investing 6-12 months) – KKP, TISCO, QH, LH, SC, ORI, NOBLE, DIF, INTUCH, HANA, SCCC, EASTW, TTW,
4) Long-term cumulative shares (DCA) (Investing more than 1 year) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and PTT