News of trade deal, Johnson landslide buoy stocks

News of trade deal, Johnson landslide buoy stocks

Recap: Global shares rose and bonds fluctuated before the expected confirmation of a partial trade deal between the US and China to avert more tariffs. The pound also jumped as Prime Minister Boris Johnson's Conservative Party won a resounding election victory.

The SET index moved in a range of 1,546.51 and 1,582.16 points before closing at 1,573.91, up 1% on the week, in heavy trade averaging 54.5 billion baht a day.

Institutional investors were net buyers of 8.3 billion baht, retail investors purchased 435 million and brokerage firms bought 411.3 million in shares. Foreign investors were net sellers at 9.2 billion baht.

Newsmakers: US President Donald Trump has signed off on a phase-one trade deal with China, averting the introduction tomorrow of a new wave of US tariffs, according to White House sources. The deal includes a promise by the Chinese to buy more US agricultural goods, and possible reductions of existing duties on Chinese products.

  • Boris Johnson and the Conservatives cruised to a large majority in the UK election, ensuring that the country will exit the European Union by the end of next month.
  • The United States, Mexico and Canada signed a deal to finalise their new trade agreement, paving the way for ratification after more than two years of arduous negotiations.
  • The Indonesian government says EU tariffs on its palm-based biodiesel shipments are "unacceptable" and all options to counter the policy are on the table, including retaliatory actions.
  • Nissan should be fined US$22 million for filing documents that under-reported the compensation of former chief Carlos Ghosn, Japanese regulators recommended Tuesday. The firm said it would not dispute the penalty.
  • Britain's biggest supermarket chain, Tesco, says it is reviewing its businesses in Thailand and Malaysia, including looking at a possible sale.
  • Smaller businesses may delay investment and recruitment next year because of the recent minimum wage increase of 5-6 baht per day, says the Federation of Thai SMEs. Pending cabinet approval, the wage will rise from a range of 308 to 330 baht to between 313 and 336 baht on Jan 1.
  • Manufacturers will not be allowed to raise goods prices after a Commerce Ministry study found the minimum wage increase would only marginally affect production costs.
  • Kasikorn Research Center predicts at least 100,000 job losses this year and another 30,000 next year, blaming the export slump, tepid economic growth and drought.
  • The unemployment rate in Thailand inched up to 1.1% in November, from 1% in the same month last year, the Bank of Thailand reported.
  • The business confidence index fell for the 12th straight month to 45.9 in November, from 46 in October, reported the University of the Thai Chamber of Commerce.
  • Exhibitors at the 36th Thailand International Motor Expo took 44,740 bookings for cars and motorcycles, down 16.2% from last year's show.
  • S&P Global Ratings has upgraded its outlook on Thailand's sovereign credit rating to positive from stable, but it cautions that a return to political stability will not be enough to spur an economy beset by external challenges.
  • The baht's value is expected to continue its upward trend, reaching 29.25 against the US dollar in the fourth quarter as the greenback weakens, says Bank of Ayudhya.
  • Thailand needs to attract talent and skilled Thais living abroad to drive local startups and draw funding, as investment in startups here continues to trail activity in Indonesia and Vietnam, says Line Thailand.
  • Startup entrepreneurs' confidence has continued to fall, with the index dipping to 51.85 for the third quarter because of the faltering economy, cautious consumer spending and intensified competition, according to a Government Savings Bank survey.
  • The amount invested in the recently approved Super Savings Funds (SSFs) could dwindle by half from the annual sums invested in long-term equity funds (LTFs) because of the significant reduction in tax privileges, says a capital market executive.
  • Credit card issuers have proposed the Bank of Thailand lower the credit line of cardholders joining the central bank's new refinancing scheme and waive loan-loss provision requirements for participants in return for an interest rate cut to 7-12%, says a source in banking circles.
  • Bangkok has leapt 43 places and entered the top 50 most expensive locations in the world for the first time, largely because of the strong baht, according a survey by ECA International, which advises on management and compensation for employees being assigned around the world.
  • China will continue to be the biggest tourism market over the next decade, with arrivals estimated to reach 23 million, twice current figures, says Krungthai Compass.
  • Thailand's trade negotiation chief vows next year will see the signing of the long-delayed Regional Comprehensive Economic Partnership (RCEP), the conclusion of free trade agreement (FTA) negotiations with Turkey, and the opening of FTA talks with the EU and the UK.
  • King Power Duty Free is the sole contender for the duty-free shop concession at Don Mueang airport from 2022-33. The official decision will be announced on Monday.
  • Bangkok Bank (BBL) has entered into a conditional share purchase agreement to buy an 89.12% stake in Indonesia's PT Bank Permata in a deal worth US$2.7 billion (81.3 billion baht). A tender offer for the remaining shares is expected to follow.

Coming up: Germany will release preliminary manufacturing PMI for December on Monday and Britain will release preliminary manufacturing and services data.

  • Japan will release November trade figures on Tuesday and Germany will release the December business climate survey on Wednesday.
  • Britain will announce November inflation on Wednesday and the Bank of England will release meeting minutes and an update on its quantitative easing plans on Thursday.
  • On Friday, Japan will release November inflation, China will announce the one-year loan prime rate. Britain, Germany and the EU will update consumer confidence, and the US will release November personal income and spending data.

Stocks to watch: Tisco Securities recommends stocks expected to rally after steep price declines last month. Its picks include AMATA, BJC, CENTEL, INTUCH, PLANB, PTG, RATCH and WHA. It also recommends high-dividend stocks on which first-quarter dividends will be paid, such as AP, KKP, MAJOR, QH, SCB, SCC and TVO. Stocks benefiting from the upward revision in Thailand's sovereign rating outlook are KBANK, SCB, KTC and MTC.

  • Capital Nomura Securities recommends cyclical and value plays, with suggested picks including ADVANC, AOT, BBL, BDMS, CPF, PTT, PTTGC, SCC, TVO and WHA. Looking to 2020, it recommends ADVANC, AOT, BBL, BDMS, CPF, PTT, PTTGC, SCC, TVO and WHA.

Technical view: Asia Plus Securities sees support at 1,550 points and resistance at 1,600. Maybank Kim Eng sees support at 1,545 and resistance at 1,590.

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