Recap: The Stock Exchange of Thailand continued its bull run with daily trading value well above 50 billion baht. Heavy action in mid- and small-cap stocks outside the SET100 signalled more speculation. Both regulators and analysts warn investors, especially retail traders and newcomers, to play with caution.
The SET Index swung sideways in a wide range of 1,419.53 and 1,463.20 points and closed at 1,461.41 points, up 1.9% from the previous week, in heavy daily average trade worth 53.32 billion baht.
Foreign investors remained net buyers of 4.96 billion baht and local institutions bought 2.97 billion. Brokers were net sellers for a second week of 994.98 million baht, and retail investors sold 4.94 billion baht.
Big movers: Non-SET100 shares moved dramatically, with sub-1.00 stocks such as Natural Park (N-PARK) and International Engineering (IEC) near the top in trading value. However, banks led the turnover table based on good results, with KTB rising 14.5% on the week to 23.70 baht. TRUE rose 5.4% to 5.90 baht. Berli Jucker (BJC) edged up 0.4% to 67.50 baht after its major shareholder, billionaire Charoen Sirivadhanabhakdi, succeeded in taking over the Singapore conglomerate Fraser & Neave.
Newsmakers: Tisco Wealth said Italy and Spain would face increasing debt payment burdens at the end of the second quarter that could pressure market sentiment. It expects the dollar and the euro to depreciate in the second half and gold to rise.
- Concern over baht appreciation will affect exports and economic growth and possibly lead to measures to curb capital inflows, says Finansa Asset Management. It also forecast the Bank of Thailand would rise its interest rate in the second half from 2.75% to 3.25% as inflationary pressure rises.
- The World Bank, IMF and OECD all forecast the global economy will rebound this year, though the EU will remain in recession and cap global gains. Accordingly, central banks might have to keep loose monetary policies in place, such as Japan, which has extended QE to 2014, as well as developing countries including China and India.
- India is wooing foreign funds by raising the ceiling for rupee bonds for foreign investors from $20 billion to $25 billion for government bonds and from $45 billion to $50 billion for private bonds. Economists forecast the central bank will cut its interest rate a quarter point to 7.75%.
- Standard & Poor's last week maintained Thailand's credit rating at BBB+, saying the country's economic fundamentals were positive but political uncertainty continued to be a risk factor.
- Purchasing managers index (PMI) data, a key gauge of factory orders, in the euro zone and China topped expectations, suggesting that buying interest in commodity stocks could soon lead the market higher, said KGI Securities.
- Thai Oil Plc, the country's oil largest oil refiner, has issued debentures worth $1 billion to refinance its debts and for capital expenditure. The senior unsecured fixed-rate notes were issued to foreign institutional investors, according to a filling to the SET.
- The MAI-listed transformer manufacturer QTC Energy expects sales this year to grow 10% to about 1 billion baht due to strong domestic demand for energy in Thailand and Southeast Asia.
- The Thai automobile industry reported record production of more than 2 million units and domestic sales of more than 1.4 million for 2012. Market leader Toyota set a record of 516,086 units sold locally.
- Charoen Pokphand Foods Plc has joined the Kitchen of the World project by teaming with the Royal Exquisite Thai Cooking School to encourage Thai chefs to meet international standards. CPF's food services sales growth is forecast at 20% per year.
- Samart Corporation is upbeat about long-term growth with an ambitious revenue target of 30 billion baht this year, thanks to the transition period for telecommunication technologies. The country's leading equipment maker projects consolidated revenue will surge by 65% this year, with more than 50% growth in net profit.
- Coming up this week: The US Federal Reserve meets tomorrow and Wednesday, and Washington will release data on durable goods orders, pending home sales and fourth-quarter GDP.
- The biodiesel producer Energy Absolute begins trading on the MAI after an IPO at 5.50 baht per share.
- Major SET-listed firms due to report earnings this week include SCC, TPC and PTTEP.
Stocks to watch: Finansia Syrus recommends buying Bangkok Chain Hospital (BCH) as it is showing impressive growth; ROBINS as a high-growth stock, and GUNKUL for strong earnings momentum.
- Bualaung Securities and Asia Plus Securities recommend DELTA with an expected dividend yield of 5.1%. ASP says stocks expected to gain from baht appreciation include TVO and Sahamit Machinery (SMIT).
- Tisco Wealth recommends being overweight in China with a projected upside of 30%, while Thai stocks have a narrow spread at 4-5%.
Technical view: Phillip Securities sees support at 1,420 and resistance at 1,480. Asia Plus sees support at 1,430 and resistance at 1,464.