Asia Wealth Securities (AWS) released an analysis for the trading session on November 13, 2020, indicating the essential events in the stock market as follows:
The overall investment today – AWS expects the SET today (13 Nov) to decrease due to increased risk. The pressure factor comes from (1) the world economy is uncertain despite progress in vaccine development (2) concerns over the COVID-19 situation may lead to a lockdown measure in the U.S. and (3) crude oil prices decline.
In the short term, there is still a positive factor to reduce the pressure after the BOT allows commercial banks to pay dividends. The stress test of financial institutions is good.
For investment strategy, AWS recommends adding weight to Dividend Play and DCA stocks according to its Core Investment.
The world economy is uncertain despite the progress in vaccine development – “It is too early to confidently assess the vaccine’s positive effect on economic direction, especially in the near term”. The chairman of the U.S. Federal Reserve (Fed) said in a dialogue with the President of the European Central Bank (ECB) and the Governor of the Bank of England (BoE).
The Fed chairman assessed progress in the development of a COVID-19 vaccine, considered a positive factor in the medium term, but there is still some uncertainty about the production timing, distribution and efficiency of vaccines in different groups which in the past the world economy including the U.S. relatively slow recovery despite the improvement.
The main risk comes from the spread of the COVID-19 virus. The opinion was consistent with Dr. Anthony Fosy, director of the U.S. National Institute of Allergy and Communicable Diseases and is the chief physician of the task force for the control of COVID-19 of the White House stated that having a vaccine may help end the spread of COVID-19, but he is not sure the vaccine will kill COVID-19.
Bank of Thailand (BOT) allows commercial banks to pay dividends – Bank of Thailand Permit commercial banks to pay dividends after considering the stress test of financial institutions Is still sufficient for the current search situation and has been set aside continuously.
Currently, the provisioning rate is 1.5 times that of NPLs and has a capital fund to risk assets ratio of 19.8%. However, dividend payments in 2020 must not exceed the 2019 payout and do not exceed 50% of the 2020 net profit, AWS has a short-term positive view on the commercial banking sector.
In particular, banks with high dividend payouts such as TISCO and KKP, the price of commercial banking stocks is relatively low due to economic fluctuation.
AWS recommends “BUY” on the current high economic recovery and high upside but there are still issues to be monitored in terms of asset quality that will end the suspension measures during 4Q20, especially in the SME.
Technical View – Today, AWS expects the SET Index to move between 1,313-1,357 points. The recommended stocks are THANI, BPP, DOD, MC and NOBLE.
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