Asia Wealth Securities (AWS) expected the SET today (10 Mar) to move within the range 1,531-1,565 points, trading remains volatile with both positive and negative factors making investment strategies to recommend speculation on stocks with unique positive factors based on our Core Investment (Vaccine expectation and economic stimulus measures).
The security company believed the SET Index will have a chance to recover from lower bond yield pressures (It will be positive for Defensive stocks, especially electrical stocks which AWS picked BPP, GPSC, GULF and EGCO as the top picks) after the 10-year and 30-year U.S. Treasury yields declined to 1.53% and 2.34% last night, including the increased confidence in the re-opening of the policy after China started as a model for the use of the Vaccine Passport, the U.S. CDC has built up confidence among those who have completed their vaccination schedule.
However, the decline in crude oil prices and the valuation of cyclical stocks in the banking sector, energy and petrochemicals are starting to limit. In addition, the price of crude oil dropped which will be a factor limiting the market recovery.
WTI crude for April delivery closed at USD64.01 per barrel, down USD1.04 (-1.6%). Crude oil prices fell after positive feedback, both OPEC+ consensus maintained production capacity, including Saudi Arabia continued to cut output by 1 million barrels per day for another 1 month.
Expectations for increased crude demand after the U.S. stimulus measures are ready to sign and announce it into law within the next week. While concerns over the unrest in the Middle East are not as severe as previously assessed, AWS believed that the price of crude oil will drop towards the real fundamentals.
AWS estimated the crude price movement in the 1H64 range at USD55-65 per barrel. Follow up reports of crude oil reserves from the U.S. Energy Information Administration (EIA) is due to release the report tonight (10 Mar) Thai time. Market Consensus expects crude oil reserves to rise 2.7 million barrels last week. (Ending 5 Mar).
The Chinese vaccine passport will have a positive effect on cyclical stocks of the entire Banking sector, Energy sector and Petrochemical, including services sector which consist of tourism, aviation and hotels.
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) Dividend Play (Middle-term trading 6-12 months) – SC, LH, QH, KKP, TISCO, RATCH, DIF, INTUCH, EASTW and TTW
5) Long term accumulative stocks (DCA) (Long-term trading over 1 year) – AOT, BEM, ADVANC, WHA, LH, CPALL, CPF, BDMS, HMPRO, BBL and KTB