Sawasdee - Apr 16, 2021
The market may rebound from foreign factors but upside is limited by the new wave of COVID-19
Market outlook & strategy : The SET is expected to rebound from support at 1,530-1,538, supported by positive sentiment from foreign stock markets and oil price. However, upside will be limited at 1,554 and 1,564 on concerns over local COVID-19 outbreak. For core portfolios we suggest putting 25% in stocks when the market consolidates at 1,500. Speculation should be focused on stocks with a catalyst.
Conviction list : # We recommend 1) short-term trading on TQM and STGT as they benefit from the new wave of COVID-19; 2) speculate on commodity shares – PTT, TOP; 3) accumulate power generators (GULF, BGRIM), the EV theme and the clean energy theme (EA KCE).
# Recommend TQM as we expect robust earnings growth of 60% in 2021, underpinned by strong premium sales growth. The company is cash-rich with no interest-bearing debt. We thus believe it can sustain a high dividend payout ration at 90%. We also recommend defensive stock, BCH, as it benefits from providing COVID-19 diagnostics which support expected earnings growth of 11% this year; buy when the price corrects.
Wealth strategy : Recommend mutual fund “KFHTECH-A”, which invests in the IT industry via bottom-up analysis, choosing companies with good earnings outlook.
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