Asia Wealth Securities (AWS) released an analysis for the trading session on January 11, 2021 indicating the essential events in the stock market as follows:
Today’s investment overview – AWS expects the SET this week (11-15 Jan) to move within a range of 1,492-1,579 points this week, following foreign factors, following the Fed’s Beige Book report (13 Jan) and the release of economic stimulus measures from the President of the U.S. Joe Biden, including the Fed Chairman’s statement (14 Jan), what needs to be monitored is signaling trends in interest rates and the economy, including issuing financial measures to support further economic stimulus.
Meanwhile, domestic factors follow the Cabinet meeting (12 Jan), an interesting issue is that the NESDB proposed the meeting to extend the project period of “We travel together” until the end of April 2021.
AWS estimates that the positive factors that occurred will still support SET in the short to medium term and there is a chance to test the peak at 1,610 points in 2021 (Base case). AWS also recommends selling and taking profit at full value or exceed the fundamental value while new investment round, recommend investing in positive stocks based on AWS Core Investment.
AWS believes the SET remains positive on the blue wave in the U.S., leading to new stimulus measures. Including the COVID-19 vaccine that began to reach people in many countries.
From this point, leads AWS to believe that the SET will move within the range 1,534-1,610 points (Base Case economic recovery is as expected, Vaccines performed and the virus pandemic has slowed since mid of 2021, the earnings per share grew 11.9%YoY to 17.4%YoY).
If the economic recovery was better than expected, the vaccine had reached the end of 1Q21 and began to see GDP growth from 2Q21 onwards (Best Case Earnings Per Share Growth 23.0%YoY).
There is a chance that the Target SET target in 2021 will reach 1,687 points, the latest Market Consensus trend has started to gradually increase earnings per share forecast in 2021, especially in Asia Pacific Company (Including Thailand) so AWS also recommends investing according to AWS Core Investment portfolio.
The past week, AWS saw a significant drop in gold prices. This includes an increase in the U.S. 10-year Treasury yields (the latest U.S.2Y and U.S.10Y at 0.137% and 1.119%, respectively), including the direction of the dollar to appreciate which part of the response to the Blue Wave phenomenon, the Democrats took full control of both the administration (the White House) and Congress.
The House of Representatives (House of Representatives and Senate) made the market expect that Joe Biden’s mid-level policy to be implemented without being politically obstructed by Republicans so this makes it easy to move around USD700.0bn in stimulus policies, including the issuance of a Fiscal stimulus and Infrastructure bill during 2021.
AWS has a positive view on banking, energy and petrochemicals, power generation business and retail business, especially in the short to medium term, AWS also expects Fund Flow to continue to flow into the Thai and regional markets due to the concern over Joe Biden’s tax hike policy, but long-term, if the U.S. Treasury yields continue to increase, there is a chance that AWS will see Fund Flow back from an Earning Yield Gap, which poses a risk to overall investment in the Thai stock market.
1) Global Play (Trading within 1 month) – PTT, PTTEP, TOP, PTTGC and SCC
2) Green energy stocks (Trading within 3-6 months) – GPSC, EGCO, GULF, BGRIM, BPP, BCPG, EA and ACE
3) Expectations for the vaccine and increased stimulus measures (Trading for 3-6 months) – BBL, KKP, BEM, CPF, TU, M, OSP, CPALL, HMPRO, CRC and CHG
4) Stocks which expected that the performance in 4Q20 will outstand (1-2 months) – SAWAD, GULF, SPALI, ORI, WHA and STA
5) Dividend Play (Middle-term trading 6-12 months) – SC, LH, QH, KKP, TISCO, RATCH, DIF, INTUCH, EASTW and TTW
6) Long term accumulative stocks (DCA) (Long-term trading over 1 year) – AOT, BEM, ADVANC, WHA, LH, CPALL, CPF, BDMS, HMPRO, BBL and KTB