Recap: The Stock Exchange of Thailand continued to rise with strong support from external factors, specifically new stimulus from the US Federal Reserve, European Central Bank and Bank of England, and the decision by Japan's central bank to add another 10 trillion yen to its asset-purchase plan.
However, while liquidity remained very healthy, the SET index did not climb much. It moved in a range of 1,269.16 and 1,288.37 points and closed on Friday at 1,286.26 points, up 0.8% from the week before. Foreigners were net buyers for a third consecutive week, at 1.81 billion baht. Institutional investors bought 930.32 million, while brokers sold 315.89 million and local retail investors 2.42 billion baht.
Big movers: Big-caps including PTT (up 0.3% on the week to 337 baht) and SCC (up 3.8% to 356) led the turnover table. Univentures (UV) was the top gainer, rising 28.7% to 5 baht, after the developer's board approved a share purchase in Golden Land Property (GOLD)..
Newsmakers: Fund flows continued to Asia as the impact of the Fed's QE3 kicked in. Bill Gross at Pimco Fund and Eric Rosengren of the Boston Fed, influential voices in US financial markets, suggest that it could take a very long time for unemployment, now above 8%, to come down to its "natural" rate of 5-6%, so the Fed could be buying bonds for some time.
- Spain successfully sold 3- and 10-year bonds, leaving markets uncertain about whether it needs to seek a bailout. The government will offer more specifics on Thursday when it releases its economic reform plan.
- The Bank of Thailand may relax regulations on foreign-currency deposits for resident accounts to help stem the rapid appreciation of the baht, thereby allaying fears of exporters. Currently the cap is $100 million for deposit periods of longer than one year.
- The Agricultural Price Index dropped 13.1% last month as rubber and palm oil prices slid. Global economic weakness has curbed demand for rubber, while palm prices are falling because supply entering the market is higher than last year. Smaller declines were seen in coconuts, pork, chickens and eggs.
- True Corp said it would consider an appeal to the Supreme Administrative Court after the Central Administrative Court dismissed its demand for 9 billion baht in compensation from TOT over access charges as an arbitration panel had ruled in February 2006.
- Banpu said it would appeal a Civil Court order to pay damages to industrialist Siva Nganthavee for squeezing him out of a power venture in Laos. The appeal process could take years, but in the worst case the coal miner would have to set aside a reserve of 31 billion baht to cover damages, interest and opportunity loss as determined by the court. Doing so, according to Asia Plus Securities, would leave Banpu with a net loss of 19 billion baht this year, instead of an expected net profit of 11.7 billion baht.
- Central Pattana (CPN) has unveiled a five-year, 50-billion-baht investment strategy to become one of top two upscale shopping complex developers in Asia. It calls for 15 new branches by 2017.
- Heineken has cleared the biggest hurdle in its fight to take control of Singapore-based Asia Pacific Breweries (APB) with Thai billionaire Charoen Sirivadhanabhakdi's Thai Beverage Plc pledging its support. ThaiBev and Mr Charoen's TCC Asset agreed to back Heineken's $5.6-billion bid for Fraser & Neave's 40% stake in the beer maker at a shareholders' meeting this week after the Dutch brewer agreed not to make a competing offer for F&N.
- The cosmetics producer Beauty Community Plc, whose brands include Beauty Buffet, Beauty Cottage and Made in Nature, plans to list on the SET in the Q4. It will offer 82.5 million shares, of which 2.5 million will be for management and staff. Phillip Securities is the financial adviser.
- The auto parts maker Fortune Part Industry (FPI) set a first-day record on the MAI on Thursday, closing at 9 baht against an IPO price of 3.50.
Coming up this week: Investors will continue to watch Spain and Italy to see if they will seek bailouts.
- Trade data for Thailand will be released tomorrow. US economic data to be released on Tuesday and Wednesday will include the S&P Home Price Index, consumer confidence, and new home sales.
- On Thursday, investors will see euro zone consumer confidence figures, final US second-quarter GDP, and durable goods orders.
Stocks to watch: KGI Securities is overweight in the banking sector, focusing on banks that benefit from hire-purchase business. Given strong pent-up demand for new cars, its picks are SCB, BAY and TISCO.
- Asia Plus Securities recommends low P/E stocks with high upside such as PTT, ESSO, TOP, SCC, TCAP, PS, SIRI, MJD, SVI, STANLY, AH, SEAFCO and THRE.
Technical view: Finansia Syrus Securities sees support at 1,270 and resistance at 1,290 while KT Seamico Securities sees support at 1,276 and resistance at 1,304.
About the author
Writer: Nuntawun Polkuamdee & Darana Chudasri