Asia Wealth Securities (AWS) released an analysis for the trading session on November 2, 2020, indicating the essential events in the stock market as follows:
The overall investment today – AWS expects the SET this week (2-6 Nov) to move within a range of 1,164-1,227 points, with the potential for sideway down volatility. Several issues to be monitored this week (1) The U.S. presidential election on 3 Nov between Donald Trump and Joe Biden.
(2) The main central bank meetings are the Fed meeting (4-5 Nov) and the BoE meeting (5 Nov), Market Consensus expects to see additional assistance or stimulus measures to cope with the second wave of the epidemic, especially the BoE.
(3) The situation of political rallies in the country after no positive signs after The Extraordinary Council Meeting on 26-27 Oct ago, despite the establishment of the Solidarity committee to reduce the conflict and find a solution for the country, but the People’s Party did not stop the protest.
While the U.S. ban tax benefits on Thai products, AWS views it as a negative sentiment for the short-term.
For investment strategy, AWS recommends reducing your investment portfolio to reduce the risk, focusing on investing in AWS Core Investment portfolio. For short-term, recommend speculation on stocks benefiting from the decline in crude oil prices. For long-term, recommend gradually accumulating Dividend play and DCA stocks.
The uncertainty about the U.S. presidential election on 3 Nov between Donald Trump and Joe Biden. Recently, President Donald Trump is currently following the popular vote. After Mr. Joe Biden, a Democrat candidate. However, the CBOE volatility index (VIX) is a popular indicator for forecasting stock market volatility.
The VIX Index recently stood at 38.02 points +0.43 points (+ 1.14%) which signaled investor concerns ahead of the US presidential election.
Fitch maintains Thai Rating with Stable Outlook – Fitch rating maintains Thailand’s credit rating at BBB + and Outlook remains Stable considering the strength of international reserves has reached the highest point.
The issue eased concerns over previous views concerned about a credit rating upgrade and the outlook on a weak economic outlook. While the Fiscal Policy Office revised its GDP forecast for 2020, shrinking 7.7%YoY (previously contracted 8.2%).
The U.S. is banned Thailand’s GSP, which has little impact on the whole picture – AWS thinks that the suspension of trade benefits in Thai products will be a negative sentiment for the short term with certain groups such as automotive equipment while the impact on the overall picture is not that much as 231 GSP-cut products, accounting for Bt25.4bn, representing 0.33% of the Thai exports and accounting for 2.62% of the value of Thai exports to the U.S. (the total export data in 2019 from the international trade statistics Ministry of Commerce)
Technical View – Today, AWS expects the SET Index to move between 1,175-1,213 points. The recommended stocks are III, MEGA, SCGP, AEONTS and TNP
1) Benefit from lower crude oil price – CK, ITD, STEC, UNIQ, SCC, TOA, TASCO, GULF, BGRIM, GPSC, EPG, OSP and BJC
2) Dividend Play (Middle-term trading 6-12 months) – KKP, TISCO, QH, LH, SC, ORI, NOBLE, DIF, INTUCH, HANA, SCCC, EASTW and TTW
3) Long-term accumulative stocks (DCA) (Long-term trading over 1 year) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and PTT