AWS Expects a Buyback in Banking Sector on Weak 2Q21 Results amid Covid-19 Pressures

Asia Wealth Securities expected SET Index to decline in pressure of Covid-19 situation, while the 2Q21 earnings of the banking sector looks weak.

The Thai stock market decreased 1.76 points or 0.11% at the opening session on July 16, 2021 with a trading value of 2.8 billion baht.


Asia Wealth Securities (AWS) expected the SET today to move in a range of 1,560-1,585 points under pressure from the COVID-19 situation in the country that has not yet been resolved after the statistics of the number of infected people, number of deaths, number of critically ill patients and the number of patients using ventilators continued to increase.

AWS stated that while the vaccination process is still below the target set by the government, it is the main factor that determines the direction of the stock market. If the number of infected people exceeds 10,000 per day will be a negative factor. Even though the SET yesterday (15 Jul) was up 2.31 points (+0.15%), the result of DELTA‘s share price, which increased by Bt78 (+13.59%), affects the SET by 7.8 points.

The short-term factors monitoring are the announcement of the bank’s earnings. AWS previously expected the bank’s 2Q21 earnings to remain weak, but believed there will be a strong buyback in the banking sector after the stock price has previously received positive feedback.

AWS’ analysts continued to overweight banking stocks and selected KBANK and KKP as the top picks. AWS also recommended stocks with positive sentiment on a selective basis, stocks benefiting from a weak baht, logistical shares, and stocks in the hospital group.


Core Investment

1) Hospitals stocks (Trading within 1 month) TM, SMD, BCH, BDMS and CHG.

2) Stocks which obtained benefit from Thai baht depreciation (Trading within 1 3 months) ASIAN, TU, HANA, KCE, SAT, AH, MEGA, NER, EPG, CBG and SMPC.

3) Stocks obtained benefit from export SONIC, JWD and NYT.

4) Long term accumulative stocks (DCA) (Long term trading over 1 year) AOT, BEM, ADVANC, WHA, LH, CPALL, CPF, BDMS, HMPRO, BBL and KTB.

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