Asia Wealth Securities (AWS) released an analysis for the trading session on November 9, 2020, indicating the essential events in the stock market as follows:
The overall investment today – AWS expects the SET this week (9-13 Nov) to move in the range 1,233-1,287 points. Important issues this week still need to follow (1) elections in the U.S. even the latest Electoral Vote results, Joe Biden, the U.S. presidential candidate from Democrats will receive more than half of the votes, there is still a chance of being sued for a new vote count. This included protests in many states. (2) the violent COVID-19 situation and (3) domestic political factors.
This week is still in the process of announcing 3Q20 results, including the Euro group Meetings on 12 Nov, and AWS expects to see a new stimulus package. This makes us view that the stock market is still volatile this week after an increase of 65.13 points (+5.45%), it still receives a positive sentiment in anticipation of capital inflows into the region.
For investment strategy, AWS continues to recommend Global Play (except upstream energy) stocks that are expected growing 3Q20 earnings which are AP, SC, ORI, STA, CPF, TFG, COM7, WICE, SAWAD, MTC and JMT, or recommend a gradual accumulation of dividend and DCA stocks according to AWS Core Investment.
Biden won, but there were uncertain factors
U.S. election issues even the latest Electoral Vote results, Joe Biden, the U.S. presidential candidate from Democrats received 290 votes, more than half (538 total), but there was still a chance that Trump will sue for a new vote count, especially in Battleground State (Swing State) with similar votes, including protests in many states from the conflict over the outcome of the election.
However, AWS previously presented five things that it can expect to see if Joe Biden wins the election: (1) the global trade situation eases (2) the baht has a chance to appreciate from capital expected to flow back into the region, making the U.S. dollar depreciated. Last week, baht appreciated by Bt0.51 per USD (-1.64%), positive for the SET Index.
(3) More stimulus measures, especially government spending that has a policy for improving domestic utilities worth USD2tn (4) an increase in the U.S. Treasury yields and (5) interest in renewable energy stocks according to Joe Biden’s policy to support clean energy which is negative about the price of oil.
However, from the COVID-19 situation still severe, AWS expects that there is a possibility that the U.S. will review plans for announcing lockdown measures whether announced by the current government or the government of Joe Biden. In addition, Biden can’t dominate the majority in the Senate which will affect Democrats’ advocacy policy. This will be a negative factor in the long-term.
The COVID-19 situation in the U.S. continues to expand at a higher rate
The U.S. stocks rose four working days totaling more than 7.13% before Friday’s close of 28,323.40, down 66.78 (-0.24%), partly due to concerns about the number of new cases of COVID-19 in the U.S. rising to exceed 100,000 cases.
This includes the situation in the European Union in France, Italy and Germany, as well as Britain which still have more infected at an increasing rate. AWS views this issue as it will bring back pressure on the overall investment. This was reflected in the decline in crude oil prices at the end of last week.
Including the crude oil market this morning from concerns about the overall economy and the demand for crude oil which are still affected by COVID-19.
Today, AWS expects the SET Index to move between 1,240-1,275 points. The recommended stocks are AMA, GUNKUL, KTB, SC and NYT.
1) Dividend Play (Middle-term trading 6-12 months) – SC, LH, QH, KKP, TISCO, RATCH, DIF, INTUCH, EASTW and TTW
2) Long term accumulative stocks (DCA) (Long-term trading over 1 year) – AOT, BEM, ADVANC, WHA, LH, CPALL, CPF, BDMS, HMPRO, BBL and KTB