Asia Wealth Securities (AWS) expected the SET this week to move in the range of 1,538-1,620 points. AWS believed the SET index is volatile. Last week, the SET index rose 24.08 points (+1.56%), higher than the SET index closed at the end of 2019 (before the COVID-19 situation) for the first time after responding to positive factors from (1) U.S. economic stimulus measures signed a declaration into law (2) the ECB will increase the QE limit during 2Q21 and (3) faster-than-expected global vaccination.
However, the risk factors that AWS saw will affect the overall investment this week remain at (1) the most recent bond yield volatility (10-year) back above 1.6% and (2) the COVID-19 situation that comes back to worrying again after Denmark and 6 other European countries suspension of vaccination (AstraZeneca) temporarily following adverse effects reported after vaccination and finding someone infected in the country (Bang Khae market area). The increased risk will affect the Big Cap stocks as well as the stocks that benefit from the reopening of the city.
For investment strategy, AWS recommended taking profit, reducing investment portfolios, and holding more than 50% of your cash to reduce your exposure to short-term market volatility.
A result of COVID-19 vaccination that progressed faster than expected, including the issuance of many fiscal assistance measures from many countries, especially in the U.S. after President Joe Biden signed a law to stimulate the U.S. economy on Thursday (11 Mar) raised concerns about rising inflation. Even during the past, the Fed will continue to maintain a relaxed monetary policy. The Fed’s monetary policy meeting (16-17 Mar) must be monitored for signals of inflation. Recently (12 Mar), the yields on 10-year and 30-year U.S. government bonds have increased to 1.625% and 2.378%.
AWS believed that the bond yield will remain volatile and have an opportunity to increase in 2Q21 compared to YoY, so AWS had to monitor the Fed’s stance at the meeting on 17-18 Mar regarding inflation outlook and views on GDP forecasts.
1) Global Play (Trading within 1 month) – PTT, PTTEP, TOP, PTTGC and SCC
2) Obtained benefit from the decreasing in bond yield (Trading within 3-6 months) – GPSC, EGCO, GULF, BGRIm, BPP, BCPG and ACE
3) Expectations for the vaccine and increased stimulus measures (Trading for 3-6 months) – CPALL, AOT, AAV, ERW, BDMS, CHG, AMATA and WHA.
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