Asia Wealth Securities (AWS) released an analysis for the trading session on February 1, 2021 indicating the essential events in the stock market as follows:
Today’s investment overview – AWS expects the SET this week (1-5 Feb) to move in the range of 1,428-1,500 points. There are also risk factors for delayed and effective vaccine issues, including the uncertainty of the U.S. economic stimulus which still has to follow the attitude and solutions to the problems of President Joe Biden and Mrs. Janet Yellen, Minister of Finance.
Also, this week follows the Thai central bank meeting (BoT) on 3 Feb and the British Bank (BoE) on 4 Feb where the market expects to see additional aid or stimulus measures to reduce the impact of the new epidemic in Thailand and England, including the announcement of the operating results of Thai and oversea listed companies.
Overall, AWS still has the same investment strategy which recommends profitable stocks that are at full value or exceeding fundamental value and focuses on stocks with unique positive factors in AWS Core Investment portfolio, especially those that are expected to have a strong 4Q20 performance.
Vaccine uncertainty pressures the investment overview – the main problem with the COVID-19 vaccine which currently at Production delays, including inferior protection performance than expected so it is a factor that has affected confidence in the economic recovery.
Previously, AstraZeneca said that Vaccine against COVID-19 has a production problem and it will lower deliveries to the European Union (EU) to the end of Mar, prompting the company to expect a 60% reduction in vaccine deliveries, as well as Pfizer Inc. which will reduce COVID-19 deliveries to just 50% to Europe from the end of Feb to Mar.
While J&J recently reported that the dose of the vaccine which was 72% effective in preventing COVID-19 in the U.S. and lower than 66% in many other trials. This is lower than that of Pfizer and Bio-Tech and Moderna which is efficient at around 95%.
Meanwhile recent developments in the vaccine is a supporting factor for investment. But as a result of the production delay, including inferior protection performance than expected caused us to view it as a negative factor for the overall investment.
Vaccine insufficiency limit the recovery of crude oil prices – although the oil market still has positive factors from (1) the Saudi oil production cut it plans which will cut output by 1.0mn bpd to 8.1mn bpd (from 1 Feb to the end of Mar), while OPEC+ will maintain oil production at 7.2mn bpd until the end of Mar and (2) Concerns about falling oversupply after the EIA reported a 9.9mn barrel drop in the U.S. crude reserves last week. (Ended 22 Jan). However, uncertainty in the COVID-19 vaccine will limit the recovery of crude oil prices
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