Recap: US and global stock markets climbed for most of last week, propelled by eased worries over a US rate increase following a report of disappointing retail sales in February. In the Thai stock market, the Bank of Thailand's unexpected move to cut its policy rate improved investors' risk appetite but stocks still failed to advance.
The SET Index moved in a range of 1,520.20 points and 1,565.19, before closing at 1,541.55, down 1.7% from the previous week, in moderate trade worth 45.98 billion baht a day. Foreign investors were net sellers of 314.59 million baht, brokers sold 5.53 billion and institutions 4.48 billion baht. Retail investors were net buyers of 7.33 billion baht.
Big movers: Top loser AJD fell 36.5% to 2.02 baht and top gainer ABICO rose 46.5% to 18.60 baht. IEC led in volume, unchanged at 0.05 baht. Top in value were TRUE, down 1.4% to 13.70 baht; ADVANC, down 1.5% to 241 baht; and PTT, down 1.5% to 324 baht.
Newsmakers: US retail sales unexpectedly fell for a third straight month in February as harsh weather kept consumers from automobile showrooms and shopping malls. Retail sales dropped 0.6% after declining 0.8% in January.
EU finance ministers agreed to the details on a four-year, 315-billion-euro (US$338 billion) infrastructure investment plan to help revive the economy without piling up more debt, and aim to get the first projects going by the end of the year.
German exports fell in January by 2.1%, the worst performance in five months, after a sharp rise in December.
Prime Minister Prayut Chan-ocha ordered a delay in the land and buildings tax, citing concern that it would hurt low-income earners already loaded with household debt. However, Finance Minister Sommai Phasee has insisted he will keep pushing the proposal. Just days earlier, Gen Prayut had warned the public that if the property tax failed to go through, the government might have to raise VAT from 7% to 10% to help pay for its programmes.
The cabinet last week agreed on plans to start taxing all tutorial schools. The Revenue Department estimated the taxes would generate 2 billion baht a year.
The Monetary Policy Committee (MPC) voted 4-3 to cut its benchmark rate by 25 basis points to 1.75% to spur economic growth. It also admitted that growth this year may not reach the 4% upper band of its forecast.
SCB became the first commercial bank to reach to the central bank move, trimming its minimum lending rate (MLR) and fixed deposit rate by 20 basis points, effective today. The new MLR is 6.55%.
PTT Plc plans to reduce capital expenditure between now and 2019 by 10% from the previously planned 327 billion baht, in line with tumbling oil prices.
Transport Minister Prajin Juntong said Thailand and China would set up a joint venture to develop double-track rail networks. The Thai government will be the project owner but China will design, construct and procure track systems and equipment. State funds will be used for land expropriation and domestic loans for construction. Chinese loans will fund civil work on signal and electrical systems.
The Transport Ministry will seek 3.9 billion baht to build a second bridge across the Moei River in Tak province including a 1-billion-baht grant for work on the Myanmar side.
The State Enterprise Policy Office (SEPO) said a draft law to set up a holding firm to supervise state-owned companies would be submitted to the NLA in June. The new body would oversee 13 state-owned companies, including PTT, TOT, CAT, MCOT, THAI and AOT.
LOXLEY has proposed to help state-owned TOT upgrade its 4G network, saying the work would take six months and cost about 15 billion baht. The company aims to provide mobile services to state projects ranging from infrastructure to educational networks, and to pay 20% of returns to TOT.
Loxley also said it had not yet been contacted by the Government Lottery Office (GLO) about a new plan to operate lottery vending machines. However, it said existing contracts dating back 12 years with the GLO remain in effect even though earlier plans for lottery vending machines were scrapped.
The property developer AP plans to introduce 10 new condominium projects worth 22.4 billion baht this year, all close to the mass-transit system, in the belief that demand will recover. AP estimates 2015 revenue at 25.3 billion baht, up 10% year-on-year, and presales of 30 billion baht, up 32%, while its net profit margin should improve to 12.4% from 11.6% last year thanks to more transfers.
BTS has expressed interest in the Thai-Chinese train project. The Skytrain operator has 30 billion baht in cash to bid for other projects either alone or with other partners.
Coming up this week: Thai banks' figures for loan growth in February will be closely watched. US industrial production for February is due today.
The Bank of Japan will meet tomorrow. Due the same day are US housing starts and building permits for February, euro zone inflation for February and the ZEW business expectations survey.
The US Federal Open Market Committee (FOMC) will meet on Wednesday with a decision to be announced around 2am Thursday Thailand time.
Thai automobile sales for February and an updated Bank of Thailand economic forecast are due on Friday.
Stocks to watch: Asia Plus Securities has a buy recommendation on good fundamental stocks such as SPALI and MCS. Bualuang Securities recommends TSR, UNIQ and ITD. The broker also suggests investors to accumulate BMCL and CK on expectations that they will gain from double-track rail projects. CLSA Securities (Thailand) has buy recommendations on UNIQ, AP, HEMRAJ, AMATA, TISCO, TRUE, LH and STEC.
Technical view: Asia Plus Securities sees support at 1,530 points with resistance at 1,560. Bualuang Securities puts support at 1,520 points and resistance at 1,560.