Asia Wealth Securities (AWS) released an analysis for the trading session on October 21, 2020, indicating the essential events in the stock market as follows:
The overall investment today – The Cabinet meeting with the Prime Minister passed a resolution approving the issuance of a royal decree an extraordinary parliamentary session will be opened on 26-27 October 2020 to provide an opportunity for general discussions without a vote of Article 165 of the Constitution to listen to the opinions of the members of the Congress on finding a solution.
AWS looks at the issue will have a less positive effect on the market because investment still faces risks of volatility, uncertainty that will arise from domestic political factors until the Extraordinary Parliament meeting in the middle of next week, as well as, organizing meetings still have many factors to consider, especially to amend the constitution.
Besides, the current investment outlook is driven by negative foreign factors on the delay of the U.S. economic stimulus package and the COVID-19 situation which came back to spread in Europe.
The new BOT chairman expects that Thai GDP to turn positive again in 2Q21 – the BOT governor expects that Thai GDP to turn positive again in 2Q21, while economic activity is expected to become to normal level which like before the COVID crisis in 3Q22, while believes that Thailand’s GDP in 2020 will shrink in the range of 7.8% -8.0%.
Also, the Governor of the Bank of Thailand (BOT) revealed that COVID-19 is a widespread public health crisis and affect global links, causing the economic activity to interrupt at the same time in many countries, including Thailand that has to lock down impacted in many entrepreneurs and people, especially for exports and tourism which expected that the number of Thai foreign tourists in 2020 will drop to 6.7 million (originally 40 million), affecting about 10% of GDP, while Thai exports in 2Q20 contracted the most in 11 years.
While the economic recovery is expected to take at least two years to return to pre-COVID-19 levels. Partly because of the structure of the product and Thai export markets are concentrated in product groups and a slow recovery market.
Technical View – Today, AWS expects the SET Index to move between 1,195-1,221 with the recommended stocks are WHA, NOBLE and ICHI.
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