Asian investors take profits after upbeat week

RECAP: Most Asian equity markets slipped yesterday on profit-taking after a big rally the day before, but Japan's Nikkei closed at an all-time high, underpinned by record gains on Wall Street overnight, strength in automakers' stocks and a weaker yen.

Thai shares moved in a range of 1,372.28 and 1,393.46 points this week, before closing yesterday at 1,381.04, down 0.4% from the previous week, with daily turnover averaging 43.37 billion baht.

Retail investors were net buyers of 35.11 billion baht, followed by institutional investors at 1.38 billion and brokerage firms at 645.61 million. Foreign investors were net sellers of 37.13 billion baht.

NEWSMAKERS: The recent uptick in US inflation has failed to change Federal Reserve chairman Jerome Powell's contention that price pressures are easing and interest rates should fall this year. The latest "dot plot" survey of US central bank officials shows they expect to cut rates three times in 2024.

• The Bank of Japan on Tuesday hiked interest rates for the first time in 17 years, and while they are still near zero, they are no longer negative. The move closes a chapter in its aggressive effort to stimulate an economy that has long struggled to grow.
• Consumer inflation in Japan climbed in February for the first time in four months to 2.8% year-on-year, from 2.2% in January.
• The Bank of England left its policy rate unchanged at 5.25% on Thursday, but governor Andrew Bailey said policymakers were confident that inflation was close to being tamed and a rate cut was now "in play".
• The Swiss National Bank on Thursday surprised the market by trimming its key interest rate by a quarter-point to 1.5%, becoming the world's the first major central bank to announce a cut.
• Gold prices topped $2,200 for the first time in Asian trade on Thursday, as the dollar fell after the US Federal Reserve delivered an upbeat outlook on rate cuts.
• Bitcoin could pass $80,000 by the end of this year, predicts Richard Teng, chief executive of Binance, the world's largest crypto exchange. The top cryptocurrency was trading near $66,000 yesterday, after hitting an all-time high above $73,000 a week earlier.
• US manufacturing activity continues to pick up with the latest S&P Global manufacturing purchasing managers index (PMI) at 52.5, up from 52.2 a month earlier, while the services PMI slipped to 51.7 from 52.3.
• The US Department of Justice and 15 states have filed an antitrust suit against Apple, accusing it of using demand for its iPhone and other products to drive up prices for its services and hurt smaller rivals.
• Apple is in talks to build Google's Gemini artificial intelligence (AI) engine into the iPhone, Bloomberg News reported. Apple has also held discussions with Microsoft-backed OpenAI.
• The government of Saudi Arabia plans to create a $40-billion fund to invest in AI, according to sources -- the latest sign of the gold rush for a technology that is starting to reshape how people live and work.
• Intel Corp has received US government funding of $8.5 billion under a law related to chips and science to expand its semiconductor business in its home market.
• China's industrial production growth exceeded expectations in the first two months of 2024, with faster than expected expansion seen in high-tech manufacturing, data showed.
• Foreign and domestic firms are expected to invest much as $6 billion in the Philippines' casino sector in the next five years, the head of its gaming regulator said, bolstering its status among Asia's top gambling destinations.
• Japanese exports rose 7.8% year-on-year last month on strong shipments of cars and electrical machinery. February shipments totalled 8.2 trillion yen ($55 billion), marking the third straight month of growth.
• Japan welcomed 2.79 million visitors in February, the most for any month since the Covid-19 pandemic began, data from the Japan National Tourism Organization showed.
• Tencent Holdings reported worse-than-expected earnings in the fourth quarter of 2023, dragged down by weaker performance in its video gaming business. The Chinese social media giant said revenue rose 7% year-on-year to 155.2 billion yuan ($21.5 billion) while net profit fell 75% to 27 billion yuan.
• Russia is increasing oil exports from its western ports by nearly 200,000 barrels per day, aiming for a monthly target of 2.15 million bpd, as drone attacks by Ukraine on Russian refineries have caused production losses of up to 600,000 bpd.
• Wheat futures continue to decline amid concerns about delayed demand, with US exporters cancelling over 500,000 tonnes in sales to China, and Chinese importers cancelling or delaying over 1 million tonnes in purchases from Australia.
• Three consortiums led by major local corporations -- Gulf Energy Development, Siam Commercial Bank and Charoen Pokphand Group -- are expected to apply for virtual bank licences. The Bank of Thailand is accepting applications until Sept 19.
• More than 580 listed companies on the Stock Exchange of Thailand paid combined dividends worth 593 billion baht last year, down from 611 billion in 2022, mainly attributed to lower profits. In 2023, 823 listed companies reported total net profits of 947 billion baht, down 2.6% from the previous year.
• The Ministry of Finance hopes to see interest rates fall soon, a senior official said yesterday, adding that inflation was slowing and was expected to average 1% for the year. The Bank of Thailand will hold its next rate meeting on April 10.
• Yesterday was the final day for reviewing the long-delayed fiscal 2024 budget bill in the House of Representatives. The bill is expected to go to the Senate on Tuesday with disbursements to begin early in April.
• The Japanese automaker Isuzu Motors plans to invest ¥1 trillion (240 billion baht) in Thailand through 2030. The company plans to produce batteries and electric pickups, with exports to start in 2025.
• Omoda & Jaecoo (Thailand) Co, a subsidiary of the Chinese carmaker Chery Automobile, plans to build an EV factory in Rayong, with production scheduled to start next year.
• Shares of MBK shot up 16% on Thursday after news that Siam Piwat, the operator of Siam Paragon, Siam Discovery and Iconsiam malls, is considering an IPO that could raise anywhere between 17 billion and 26 billion baht. MBK holds a 49% stake in Siam Piwat.
• PTT Exploration and Production (PTTEP) said natural gas production from its Arthit field in the Gulf of Thailand had now reached 800 million cubic feet per day, exceeding the original target for the first time and faster than expected.
• The Energy Policy and Planning Office forecasts 3.1% growth in energy demand in Thailand this year due to recovering exports, tourism and higher temperatures in the hot season. Last year, energy demand grew just 0.8%, with a 2.6% fall in industrial electricity consumption.
• Central Food Retail is planning to expand its mini-supermarket business under the Tops Daily brand, aiming to increase the franchise growth rate to 45% from the current 30% for all branches.
• Digital TV executives have asked the National Broadcasting and Telecommunication Commission to cancel plans to auction channels after existing licences expire in 2029.
• Central Pattana Plc will open its 42nd shopping centre, Central Nakhon Pathom, on March 30. The mall occupies a 100-rai site that also includes a hotel, condominium, housing project and four-rai urban park.

COMING UP: The US will release updated new home sales data on Monday, followed by monthly durable goods orders and consumer confidence on Tuesday. Russia will report monthly GDP on Wednesday, followed by UK quarterly GDP on Thursday, and German retail sales and unemployment updates. On Friday, the US will release trade figures and core personal consumption expenditures. Locally, the Bank of Thailand will release updated financial and economic data on Friday.

STOCKS TO WATCH: InnovestX Securities recommends stocks of companies likely to gain from a manufacturing recovery, especially in China, and for which operating results have bottomed out. Top picks are AOT, GFPT, GULF, KCE and SCGP.

• Long-term investors are advised to consider dollar-cost averaging to accumulate shares of undervalued companies with good operating results, among them BBL, BDMS, BEM, CPALL, PTT and SCC.
• Globlex Securities recommends stocks that will benefit from disbursement of the long-delayed fiscal 2024 budget starting in April, among them CK, STEC, TASCO and CRANE.
• Krungsri Capital Securities recommends a number of investment themes, including stocks that have bottomed out, such as IVL, PTTGC, HANA, SJWD, MENA and WICE. Beneficiaries of government measures to stimulate consumption include CPALL, CPAXT, BJC, AOT, AV, MINT and TKN. Beneficiaries of lower interest rates later this year will include GULF, GPSC, CPALL, TRUE, MINT, BBIK, BE8 and PLANB. Dividend plays include AP, MC and SC.
• Firms benefiting from hot weather include ICHI, CPALL, CPAXT, AOT, AV and MINT. Falling global freight rates, meanwhile, should help TU, GFPT, STA, NER, STGT and HANA. Finally, Chinese economic stimulus could help IVL, PTTGC, DOHOME and GLOBAL.

TECHNICAL VIEW: InnovestX Securities sees support at 1,370 points and resistance at 1,400. Globlex Securities sees support at 1,370 and resistance at 1,420.