Asia Wealth Securities (AWS) released an analysis for the trading session on November 5, 2020, indicating the essential events in the stock market as follows:
AWS expected the SET today to remain uncertain about the results of the U.S. presidential election, moving in the sideway to sideway up. The key issues are the Fed meeting (4-5 Nov) and the BoE meeting (5 Nov), where the Market Consensus expects to see additional aid or stimulus measures to cope with the second wave of the pandemic, especially BoE.
For investment strategy, AWS recommended investing in global play and speculating on energy stocks after recovering crude oil prices. While short-term risks put pressure on the SET Index which still needs to follow domestic politics.
AWS stated that if Joe Biden wins the election, the following are what the security company expected to see; (1) the world trade situation eases (2) the baht has a chance to appreciate from investments expected to flow back into the region which depressing the dollar value. (3) Increased stimulus measures, especially government spending with a policy to improve infrastructure in the country, an investment of USD2.0tn (4) the increase in the U.S. Treasury yields and (5) attractiveness of alternative energy stocks will increase according to Joe Biden’s policy to support clean energy, it is negative about the price of oil.
Meanwhile, if Donald Trump wins the election what AWS expected to see are (1) the global economy is once again uncertain from concerns about the world trade situation, including trade disputes expected to increase both from China and the European Union (2) American First policy will return to pressure overall Thai and regional exports. As a result, the capital moved back to the U.S. so the dollar will appreciate and (3) the price of crude oil has a chance to increase because of Mr. Donald Trump’s policy, he continued to support Fossil fuels.
The U.S. Energy Information Administration (EIA) reported an 8 million barrel drop in U.S. crude reserves last week. (Ended on 30 Oct), while the Market Consensus is expected to drop just 600,000 barrels. AWS recommended short-term speculation in the energy and petrochemical stocks, however, there is still a risk that the uncertainty of the U.S. leadership election may affect the overall sentiment.
As for the technical view, AWS expected the SET Index to move between 1,204-1,236 points. The recommended stocks are PTTEP, DCC, RCL, SMT and ALT.
1) Dividend Play (Middle-term trading 6-12 months) – KKP, TISCO, QH, LH, SC, ORI, NOBLE, DIF, INTUCH, HANA, SCCC, EASTW and TTW
2) Long-term accumulative stocks (DCA) (Long-term trading over 1 year) – ADVANC, AOT, BDMS, BEM, CPALL, DIF and PTT