Asia Wealth Securities (AWS) expected the SET today to move in a range of 1,554-1,580 points as the index continues to fluctuate from the pressure of inflation and the COVID-19 situation after several countries in the EU suspended vaccination.
Meanwhile, many countries continue to lock down measures which add concerns about the return of economic expansion and the demand for crude oil. The concerns were reflected in the high bond yields and the decline in crude oil prices. The Fed’s stance still needs to be monitored at the meeting on 17-18 Mar.
For investment strategy, we recommend taking profit, reducing investment portfolios, and holding more than 50% of cash to reduce exposure to short-term market volatility.
Inflation worries remain a pressure on the overall investment outlook, although U.S. Treasury Secretary Janet Yellen insisted there was no indication of the occurrence of severe inflation. Earlier, the Fed reported the Consumer Price Index (CPI), a measure of inflation from consumer spending, last week found that the CPI rose just 0.4% in Feb 2021, close to January, it was 0.3% lower than the Market Consensus expected.
However, inflation worries occured from expectation that the U.S. economic stimulus limit of USD1.9tn expected to see results in 2Q21 will increase liquidity in the market. While the Fed kept interest rates low which will be a factor supporting the recovery of inflation at the accelerated rate, reflected from the current bond yield, the U.S. 10-year and 30-year are at 1.6% and 2.4%, respectively.
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