Recap: Soft economic data from major countries raised expectations of new central bank stimulus efforts and propelled global stock markets last week. Easing tensions in Ukraine after Russia finished military drills also bolstered sentiment. After a long holiday, Thai shares started strongly on Wednesday, buoyed by heavy foreign and institutional buying before fading late in the week.
The SET Index moved in a range of 1,529.31 and 1,552.66 points and closed at 1546.62, up 1.7% from the preceding week, in heavy trade worth 53.71 billion baht a day on average. Foreign investors were net buyers worth 2.63 billion baht, brokers bought 4.29 billion and institutional investors 3.09 billion. Retail investors were net sellers of 10 billion baht.
Big movers: Top gainer IEC rose 33.3% to 0.04 baht and top loser SLC slid 40% to 0.21 baht. N-PARK led in share volume, unchanged at 0.07 baht. The top three by turnover were JAS, down 1.5% to 6.55 baht; TRUE, down 1% to 10.30 baht; and CK, up 2.9% to 27.00 baht.
Newsmakers: US retail sales unexpectedly stalled in July, pointing to some loss of momentum in the recovery. Core sales, which exclude automobiles, gasoline, building materials and food services and correspond most closely with the consumer spending component of GDP, edged up just 0.1%, after rising 0.5% in June.
Disappointing data in China stoked worries about the world's second largest economy. Cash inflows tumbled to a six-year low in July of 273.1 billion yuan (US$44.34 billion), about one-seventh of the June total. Housing sales by floor space fell 16.3% year-on-year in July, against a decline of 0.2% in June. New construction fell 12.8% in the January-July period, and new lending in July fell by two-thirds in July from the previous month. However, industrial output in July rose 9% year-on-year, in line with forecasts, and retail sales climbed 12.2%, slightly below forecasts.
The April 1 sales tax hike in Japan hammered household spending, shrinking GDP by an annualised 6.8% in the second quarter after 6.1% growth in the first quarter, when consumers went on a shopping spree to avoid the higher tax. On a quarter-to-quarter basis, the economy shrank 1.7%, less than a forecast of 1.8%.
Euro zone economic growth ground to a halt in the second quarter as Germany's economy shrank and France's stagnated. German GDP contracted 0.2% following growth of 0.7% in the preceding three months, while France experienced no growth.
The new National Energy Policy Council (NEPC) chaired by junta chief Gen Prayuth Chan-ocha, set a target for the national oil and gas conglomerate PTT Plc to spin off its gas pipeline business and restructure its refinery business by mid-2015. The moves follow pressure from the public for more transparency and competition in PTT's operations.
Thai Airways International (THAI) expects to return to the black in the fourth quarter, earlier than expected, but still plans to cut 1,500 jobs this year as part of a restructuring plan. THAI previously said it planned to cut costs and prioritise certain routes to return to profit as early as mid-2015. National Council for Peace and Order (NCPO) deputy chief Prajin Juntong, the air force chief, has resigned as the THAI chairman as planned earlier.
PTT Exploration and Production Plc (PTTEP) has put off drilling more wells in its Bongkot and Arthit fields, saying production from the fields had fallen short of expectations.
PTT Global Chemical Plc (PTTGC), the country's biggest petrochemical maker, may raise its budget for a facility in Indonesia after a change in its partner's investment plan. PT Pertamina will change its plan from investing only in petrochemicals to also increasing capacity at the oil refinery on Java from 125,000 barrels per day to 360,000. The expansion of the refinery alone would cost $3 billion, bringing the total investment to $8 billion.
Thai Oil Plc (TOP), the country's largest refiner, is looking to expand its refinery business to Indonesia and Myanmar by joining with parent PTT Plc to add new capacity in the two countries.
BEC World Plc, the operator of Channel 3, wants the broadcast regulator to offer some incentives such as a licence fee cut to help its analogue channel migrate to the digital system. The Central Administrative Court earlier dismissed BEC's request to seek an exemption for the rule. The NBTC has given Channel 3 analogue until Sept 1 to change to the digital system.
Indorama Ventures (IVL), one of the world's largest integrated polyester product makers, plans more acquisitions to speed up expansion, with four potential deals expected in H2.
The Excise Department is gearing up to amend regulations so that it can levy taxes on ready-to-drink green tea, a top-selling beverage in the country. New rules will state only "healthy beverages" that also contain locally grown agricultural products will be exempt from excise tax.
Despite a continuous decline in bank loan growth in the second quarter, commercial banks say their 6-8% loan growth target this year should be reachable due to improved economic conditions in the second half.
Coming up this week: Thailand will release official second-quarter GDP figures today. Economists expect flat year-on-year growth following a contraction of 0.6% in the first quarter.
US inflation figures are due on Tuesday.
Flash Manufacturing PMI figures for August for the United States, Japan and China are all due on Thursday. Due the same day are the Markit Manufacturing PMI and the consumer confidence reports for the euro zone.
Stocks to watch: Asia Plus Securities has buy recommendations for RCL, SINGER, SEAFCO and SYNTEC. Maybank Kim Eng Securities (Thailand) has buy calls on RATCH, DEMCO, STPI and CK but recommends selling EA and THAI.
Technical view: Finansia Syrus Securities sees support at 1,530 and resistance at 1,546. Krungsri Securities sees support at 1,525 and resistance at 1,550 and 1,570.