Recap: Although foreign capital flows started to slow down toward the end of last week as investors eyed events in Europe, the Stock Exchange of Thailand managed to stay above the strong resistance at 1,300 points. The SET Index moved in a range of 1,299.71 and 1,314.28 points and closed at 1,311.35 points, up 1% from the week before. Foreign investors were net buyers on the week of 3.55 billion baht and brokers 284.42 million. Local institutions were net sellers of 3.16 billion and retail investors 675.93 million baht.
Big movers: CIMB Thai Bank (CIMBT) rose on reports that its Malaysian parent may invest in Bank of Ayudhya (BAY). CIMBT rose 12.1% on the week to 2.40 baht. PTT fell 2.1% to 322 baht, while BTS rose 3.5% to 5.85 baht.
Newsmakers: Spain's government said on Friday that it was in talks with European institutions and "analysing its options" before deciding whether to seek a sovereign bailout. Financial markets are betting that Spain will apply soon for a rescue in which the European Central Bank buys Spanish bonds on the open market to curb its borrowing costs, but only in return for strict financial discipline.
- Moody's warned that the pending recapitalisation of Spanish banks might not be sufficient. In the last stress tests, the Spanish government said the ailing banking sector needed a further 59.3 billion euros.
- Facebook said it now had more than a billion users, but its shares are still worth 45% less than when they began trading in May.
- Consumer confidence in Thailand fell for to a six-month low in September due to worries about the country's economic prospects, the rising cost of living, floods in several provinces, political tension and the global economic slowdown.
- The Finance Ministry trimmed its forecast for 2012 economic growth to 5.5% from 5.7% earlier, reflecting a contraction in August exports and signs of worse to come.
- The unemployment rate in Thailand in August dropped slightly to 0.6% of the total workforce, from 0.7% in August 2011, according to the National Statistics Office (NSO). The number of officially registered unemployed stood at 224,000 at the end of August, 2,000 lower than in July. The NSO said there were a total of 39.54 million registered employed people _ 16.46 million in the agricultural sector and 23.08 million in the non-farm sector. The country had a total workforce of 39.8 million in August.
- Srithai Superware Plc, the world's largest melamine producer, will form a joint venture with Japanese partners to set up a plastics factory in Jakarta within two years. It plans to invest 3 billion baht to expand to tap high demand from the Asean Economic Community in 2015.
- Rojana Industrial Park Plc (ROJNA) has revised up this year's land sales target by 50% to 1,500 rai on strong demand for land on the Eastern Seaboard. The company's Ayutthaya estate was badly flooded last year but it has attracted a number of investors to its two new sites in Rayong and Prachin Buri.
- Former deputy prime minister Yongyuth Wichaidit resigned his remaining political positions, quitting both the Pheu Thai leadership and his seat as a list MP on Thursday, saying he wanted to protect the party from further criticism. Party members will meet within 60 days to pick a new executive committee and a new leader. Their master, Thaksin Shinawatra, was granting audiences to supplicants in Hong Kong over the weekend. Planes to the territory were packed with Pheu Thai politicians, though one insisted he was only there to buy an iPhone.
- Royal Bank of Scotland (RBS) is seeking a bigger role in Thailand by adding infrastructure investment to its core transaction service business.
- Oversea-Chinese Banking Corp of Singapore and CIMB of Malaysia are considering bidding for General Electric's $1.6-billion stake in Bank of Ayudhya Plc (BAY). Sources told Bloomberg that the two banks had signed non-disclosure agreements that allow them to do due diligence on BAY. GE currently owns 25% of BAY, the country's fifth-largest lender, after selling a 7.6% stake to institutional investors last month.
Coming up this week: Third-quarter SET earnings reports will begin with the banking sector.
- The SET, Phatra Securities and Bank of America Merrill Lynch will hold an investor roadshow in London on Wednesday and Thursday. Taking part will be nine blue-chip listed firms: BCP, CPN, CPF, KSL, MINT, PTTEP, PTTGC, TOP and TICON.
- G7 finance ministers and central bank governors will meet in Tokyo ahead of the annual IMF-World bank meetings that will take place on Friday.
Stocks to watch: Asia Plus recommends selling fully valued stocks and buying low-beta stocks, high-dividend and high-growth stocks in consumer finance and property. Its picks are KCAR, AEONTS, NOBLE, and ROJNA.
- Krungsri Securities recommends monthly investments in auto parts, specifically SAT and IHL, given the jump in car sales jump for the past two months. For property picks, it likes QH, as well as LPN and SPALI for high growth.
Technical view: Phillip Securities sees support at 1,285 and resistance at 1,320. Globlex Securities sees support at 1,300 and resistance at 1,350.
About the author
Writer: Nuntawun Polkuamdee & Darana Chudasri