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Editor : Eric Shu
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Lack of fresh positive triggers, heightened COVID-19 fears
Thai stock market outlook: Market seen sideways with a slight downward bias Risk appetite off the menu amid intensifying global coronavirus crisis: The COVID-19 situation in the US, India
and Brazil remained at risk after the number of new coronavirus infections showed no signs of abating. Japan also faced the risk of a second wave of infections after a resurgence of new coronavirus cases. In the US, new coronavirus cases surpassed 60,000, setting single-day record as the number of daily new infections in the top five most populous states like California, Texas and Florida continued to set new records. In our view, coronavirus jitters would continue to keep a lid on the market’s upside potential until vaccines are developed.
Domestic political noise another source of market jitters: Following the resignation of the ‘See Kumarn’ group, the four members of the government’s economic team from the ruling Palang Pracharat Party (PPRP), a cabinet reshuffle looms large amid speculation that an outsider will be brought in to head the new economic team. Even though the cabinet shake-up is seen as a key to bringing back confidence in the economy going forward, concerns remain over a possible delay in the implementation of the previously approved economic policies and whether more stimulus measures will be rolled out to blunt the economic fallout from the COVID-19 pandemic after the Bank of Thailand has less policy ammunition tools to fight against the crisis.
Bloomberg consensus EPS estimates for Thai stock market stabilizing: The week-to-week decline in Bloomberg consensus EPS estimates for the Thai stock market was minimal last week from Bt64.66/share to Bt64.58/share compared to the weekly changes over the last three months, reflecting that the overall Thai economy might probably be past the bottom in the second quarter.
The SET index is likely to trade sideways with a slight downward bias in a range of 1,315-1,385 points this week in the absence of fresh positive catalysts. Sector rotation is likely. BANK will be in the spotlight as 2Q earnings season is set to kick off this week and the sector remains a laggard relative to the market.
BBL BBL is expected to report a strong set of
results for 2QFY20 with a profit growth of 21% y-y and 47% q-q bolstered by contribution from its recently acquired PT Bank Permata.
BBL also offers a global momentum play on signs of a recovery in the global banking sector.
Look to go short S50U20 in a range of 890-910 points to bet on a downward move. Set a profit target at 858 points. Cut loss if prices climb back above 920 points.
RATCH RATCH is seen as a good defensive play
against global uncertainties. Its risk-reward profile looks compelling relative
to its peers.
WEEKLY STOCKS
SET Strategy
SET50 Futures Strategy
SET SIDEWAYS DOWN
1,315-1,385
Strategy Team #487
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 # 486
STRATEGIST PICKS
13 – 17 July 2020
Technical Analyst Team # 487
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 #486
WEEKLY TECHNICAL
SET INDEX CHART “Stuck in a sideways logjam ”
The SET index broke below the EMA-10 to the downside,
accompanied by a sell signal from the Modified Stochastic indicator but it managed to hold above the
support of the sideways range around 1,340 point and MACD remained in bullish territory.
Under these circumstances, the main index is likely to remain
trapped in a sideways range of 1,340-1,380 points this week.
STOCK SNIPER
001340 / 13201380 / 1400
แนวต้านRUN TREND
A breakout above resistance, accompanied by abullish MACD crossover into positive territory,which supports a long-term upward trend, and animprovement in the Modified Stochastic indicatorcould signal further upside in share prices.
Further gains are warranted after share pricesbroke through the resistance of the ascendingtriangle pattern and held above the EMA lines whichwere in bullish stack, and MACD crossed above thesignal line in bullish territory.
TRADING
Support
Resistance
00Support
Resistance
00Support
Resistance
39.25 / 38.25
43.25 / 45.00
39.25 / 37.50
42.00 / 43.25
13 – 17 July 2020
Outlook
TFEX StrategySeries: GOU20
Safe haven demand seen boosted by COVID-19, economic concerns: Gold prices are likely totrade sideways with an upward bias this week with a possible retest of the resistance level atUS$1,818/oz as coronavirus jitters and economic worries spur demand for safe havens and push globalequities back into sideways-down mode on waning risk appetite. In the US, a single-day record was setlast week with more than 60,000 new coronavirus cases while the number of new infections in India andBrazil showed no signs of flattening. In addition to coronavirus anxiety, expectations of slowing USeconomic data may also put the US dollar index on the back foot and in turn give a lift to gold prices.
GOLD SPOT CHART
Gold Indicators
Sideways up, key US$1,800 support seen intact
Weekly Performance
WEEKLY GOLD
Derivatives Strategy Team #494
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 # 486
SPDR Gold Holdings Dollar Index S&P500 Index
1,200.82 tons (+9.35) 96.70 (-0.49%) 3,152.05 (+0.70%)
*Closing price as of July 9, 2020
Look to go long GOU20 in a
range of US$1,790-US$1,800/oz.
Set a profit target at US$1,820.
Cut loss if prices break below US$1,780.
Resistance 1,818 / 1,830
Support 1,780 / 1,760
13 – 17 July 2020
WEEKLY CALENDAR
Strategy Team #487
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 # 486
Time Impact Event Forecast Previous
13.00 (UK) GDP (MoM) -20.4%
19.30 (US) Core CPI (MoM) (Jun) 0.1% -0.1%
19.53 (CHINA) Trade Balance (YoY) (Jun) 58.60B 62.93B
13.00 (UK) CPI (YoY) (Jun) 0.5% 0.5%
21.30 (US) Crude Oil Inventories -3.114M 5.654M
09.00 (CHINA) GDP Q2 (YoY) 2.5% -6.8%
09.00 (CHINA) Industrial Production (YoY) (Jun) 4.7% 4.4%
18.45 (EU) ECB Interest Rate Decision (Jul) 0.00% 0.00%
19.30 (US) Retail Sales (MoM) (Jun) 4.5% 17.7%
13.00 (UK) Retail Sales (MoM) (Jun) 12.0%
16.00 (EU) CPI (YoY) (Jun) 0.3% 0.1%
19.30 (US) Building Permit (Jun) 1.260M 1.216M
Tuesday, July 14, 2020
Wednesday, July 15, 2020
Thursday, July 16, 2020
Friday, July 17, 2020
13 – 17 July 2020
Note: Depreciation Appreciation
Source: Bloomberg
WEEKLY STATISTIC
Strategy Team #487
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 # 486
Month to Date
Year to Date
Performance of major Asian currencies against US dollar
13 – 17 July 2020
WEEKLY STATISTIC
w-w Asian stock market performances
Strategy Team #487
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 # 486
Source: Bloomberg
-2.69%
-0.75%
0.75%
1.52%
2.09%
2.45%
3.28%
3.29%
3.90%
3.97%
11.16%
-5.0% 0.0% 5.0% 10.0% 15.0%
Philipines
Thailand
Singapore
Korea
India
Indonesia
Taiwan
Malaysia
Vietnam
Hong kong
China
13 – 17 July 2020
WEEKLY STATISTIC
Foreign portfolio Flows into 7 ASIAN bourses
Strategy Team #487
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 # 486
Source: Bloomberg
-5,000
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
4 M
ay 2
0
11 M
ay 2
0
18 M
ay 2
0
25 M
ay 2
0
1 J
un 2
0
8 J
un 2
0
15 J
un 2
0
22 J
un 2
0
28 J
un 2
0
6 J
ul 20
Thailand Philippines S.Korea Taiwan Vietnam Indonesia India
Unit: Mil US$
13 – 17 July 2020
Source: Bloomberg
WEEKLY STATISTIC
Forward P/E ratios of Asian stock markets
Strategy Team #487
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 # 486
22.1121.12 20.80
19.04
17.64 17.60
15.70 15.5314.60
12.10
0
5
10
15
20
25
India
Thaila
nd
Mala
ysi
a
Taiw
an
Phili
ppin
es
Indonesi
a
Chin
a
Vie
tnam
Sin
gapore
Hong_Kong
Mean = 17.45
13 – 17 July 2020
ทีม่า: Bisnews, Bloomberg
Commodity WATCH
PhillipResearch PhillipResearch
PhillipCapitalTH 02 635 1700 # 486
13 – 17 July 2020
Olefin Spread Dubai VIX Index
Positive Negative IRPC, PTTGC, SCC Positive Negative BCP, IRPC, PTTGC Negative Positive SET Index
TOP, PTTEP
NEX Index (Weekly) Rubber RSS3 Soybeans
Positive Negative BANPU Positive Negative STA Positive Negative TVONegative Positive CPF, GFPT, TU
Unit: US$/ton Unit: US cents/Kg
Unit: US$/ton
Source: Bisnews, Bloomberg
Unit: US$/bbl
Unit: US cents/bushel
0
200
400
600
800
1,000
1,200
0
300
600
900
1,200
1,500
1,800
2,100
Ju
l-19
Au
g-1
9
Se
p-1
9
Oct-1
9
Nov-1
9
Dec-1
9
Ja
n-2
0
Fe
b-2
0
Ma
r-20
Ap
r-20
Ma
y-2
0
Ju
n-2
0
Ju
l-20
Spread: HDPE-Naphtha (RHS)
HDPE (LHS)
Naphtha (LHS)
HDPE spread 476.53(-9.96)
0
20
40
60
80
100
Ju
l-19
Au
g-1
9
Se
p-1
9
Oct-1
9
Nov-1
9
Dec-1
9
Ja
n-2
0
Fe
b-2
0
Ma
r-20
Ap
r-20
Ma
y-2
0
Ju
n-2
0
Ju
l-20
Dubai 42.5(0.27)
0
20
40
60
80
100
120
Ju
l-19
Au
g-1
9
Se
p-1
9
Oct-1
9
No
v-1
9
De
c-1
9
Ja
n-2
0
Feb
-20
Ma
r-20
Ap
r-20
Ma
y-2
0
Ju
n-2
0
Ju
l-20
NEX 49.14(1.07)
0
20
40
60
80
100
Ju
l-19
Au
g-1
9
Se
p-1
9
Oct-1
9
No
v-1
9
De
c-1
9
Ja
n-2
0
Feb
-20
Ma
r-20
Ap
r-20
Ma
y-2
0
Ju
n-2
0
Ju
l-20
VIX index 29.43(0.81)
100
120
140
160
180
200
Ju
l-19
Au
g-1
9
Se
p-1
9
Oct-1
9
Nov-1
9
Dec-1
9
Ja
n-2
0
Fe
b-2
0
Ma
r-20
Ap
r-20
Ma
y-2
0
Ju
n-2
0
Ju
l-20
Rubber RSS3 141.4(3.3)600
700
800
900
1,000
1,100
1,200
Ju
l-19
Au
g-1
9
Se
p-1
9
Oct-1
9
Nov-1
9
Dec-1
9
Ja
n-2
0
Fe
b-2
0
Ma
r-20
Ap
r-20
Ma
y-2
0
Ju
n-2
0
Ju
l-20
Soybeans 895.25(1.5)
Contact Information of Hong Kong Representatives
Research
Benny WANG
Dealing Director
(852) 2277 6720
ZHANG Jing
Research Analyst
Transportation and Automobiles
(86) 21 51699400-103
Terry LI
Research Analyst
TMT, Education and Finance
(852) 2277 6527
Sales
Eurus ZHOU
Research Analyst
Pharmaceutical and Consumer
(852) 2277 6515
Tracy KU
Research Analyst
Retail and Property
(852) 2277 6516
Aric AU Yoshikazu SHIKITA
Manager, Corporate & Institutional Sales Manager, International Sales
(852) 2277 6783 (852) 2277 6624
PHILLIP RESEARCH STOCK SELECTION SYSTEMS
Total Return Recommendation Rating Remarks
> +20% Buy 1 >20% upside from the current price
+5% to +20% Accumulate 2 +5% to +20% upside from the current price
-5% to +5% Neutral 3 Trade within +/- 5% from the current price
-5% to -20% Reduce 4 -5% to -20% downside from the current price
< -20% Sell 5 -20% downside from the current price
We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock’s risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation
GENERAL DISCLAIMER
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