Stocks in Asia Face Volatility in the Market as Investors Await Fed’s Economic Outlook


Stocks in Asia were fluctuating on Wednesday as investors awaited the outcome from the 2-day Federal Reserve meeting, which is scheduled to conclude today.

 

As of 9:39 local time in Thailand on March 17, 2021, Nikkei rose 0.17%, SSEC gained 0.12%, HSI increased 0.37%. Meanwhile, ASX 200 fell 0.81% and Kospi dropped 0.83%.

Last night, Dow Jones closed lower by 0.39% and S&P 500 slipped 0.16%. On the other hand, Nasdaq rose 0.09%.

Yesterday, SET Index closed at 1,564.03 points, decreased 1.70 points or 0.11% with a trading value of 88.2 billion baht.

 

Asia Wealth Securities (AWS) expect the SET today to move in the range of 1,550-1,576 points. The stock market lacks positive factors supporting the recovery. While the same negative factor still depresses the overall investment both concerns about inflation and the situation of COVID-19 abroad, especially large EU countries, suspended vaccination and still continue to use lockdown measure, including the situation of the epidemic in the country, adding concerns about the return of economic expansion and demand for crude oil, while bond yield remained high and the decline in crude oil prices. The Fed’s stance still needs to be monitored at the FOMC meeting on 16-17 Mar.

For investment strategy, AWS recommended taking profit, reducing investment portfolios, and holding more than 50% of cash to reduce exposure to short-term market volatility.

 

Federal Reserve Monetary Policy Committee (FOMC) meeting on 16-17 Mar, AWS expected to see (1) revisions to the GDP forecast for 2021 after continuing vaccination, including the enforcement of economic stimulus measures of USD1.9tn to stimulate the economy and accelerate employment (2) maintain a low interest rate policy at 0%-0.25% and (3) maintain a USD120bn per month (QE) bond repurchase measure. Issues to follow are the Fed’s stance on its long-term monetary policy to reduce market concerns over the expectation that inflation will increase in the near term, including the Fed’s view on raising interest rates after the U.S. economic figures are continuously strong.

 

Core Investment

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

 

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