Recap: In line with global markets, the Stock Exchange of Thailand took a roller-coaster ride last week as large economies took turns announcing plans to pump money into their economies to keep interest rates low and therefore spur growth.
Stock markets are monitoring the first meeting of the European Stability Mechanism (ESM), the rescue fund for at-risk euro-zone economies, in the second week of October and the European Union Summit in the middle of this month.
The SET Index broke 1,300 points on Friday but could not stay above the key psychological barrier. The index moved in a range of 1,270.33 and 1,300.17 points and closed last week at 1,298.79 points, up 0.97%. Foreigners, institutional investors and brokers were net sellers of 1.94 billion baht, 890.19 million baht, and 994.25 million baht respectively, leaving retail investors net buyers of 3.82 billion baht.
Big movers: BAY and BANPU were the most active last week. BAY fell after US-based General Electric sold 7.6% of the bank. The stock closed at 31.25 baht, down 11.97% from the previous week's speculated level. BANPU fell sharply after the Civil Court ordered it to pay damages to a former partner who claimed the mining giant abused their joint venture for its own gains at his expenses. BANPU closed at 392 baht, down 2.97% from the previous week.
Newsmakers: Spain's government proposed a belt-tightening plan for 2013, targeting a cut of budget deficit to 4.5% next year from 9% now. Spain has asked for only 100 billion, or 16% of its public debt, from the troika (the International Monetary Fund, the European Union and the European Central Bank), while the ECB is preparing to help it by purchasing its government bonds without limits. Progress on financial aids for Spain will be a key factor defining the direction of global stock markets this week.
- China's central bank injected 365 billion yuan ($57.92 billion) into its money market last week to provide liquidity for commercial banks, the largest weekly injection in history.
- At home, the Finance Ministry will seek cabinet approval for its proposal to extend the reduction of diesel excise tax to 0.005 baht per litre for another month to Oct 31 from Sept 30.
- Myanmar agreed to speed up the Dawei deep-sea port project. The development plan will be announced in November under a three-level mechanism. Shares of ITD, the major developer of the project, shed 1.64% on week to 3.60 baht last week.
- GE's sale of a 7.6% stake in BAY last week would not affect the long-term performance of the bank even though the remaining stake may be sold later, analysts said. GE said it received $462 million from the sale at an average price of 31.46 baht per share. The US giant is considering options for its remaining 25%.
- PTTEP geared up for the book-building for its 650 million new shares to be issued in November. The company's board had approved the preferential public offering of the shares to finance its massive overseas expansion, which includes the acquisition of UK-based Cove Energy.
Coming up this week Thailand's consumer index will be released today. Data to be released today are also Japan's Q3 production and services survey results, the US August construction spending, the EU's August purchasing managers index and unemployed rate.
Stock to watch: Finansia Syrus Securities said from January to August this year, foreign direct investment (FDI) jumped both in terms of value and the number of applications. Industrial estate stocks would stand to gain. Its top picks are ROJANA and AMATA.
FBualuang Securities recommended buying TISCO on a projected 28% loan growth this year on the back of the first-time car buyer programme. It also likes CPN's aggressive marketing campaigns and expansion. In addition to 50 malls in Thailand, CPN will open the first overseas branch in Shah Alam of Selangor, Malaysia, in 2015. Its net profit should more than double to 5.95 billion baht in 2012 from 2 billion baht in 2011. Bualuang recommended selling STPI and KBANK and buying INTUCH, DTAC, BH, CK, and CPALL.
Technical view: Country Group Securities sees support at 1,290 and resistance at 1,310 this week while Tisco Securities sees support at 1,290 and resistance at 1,320.