Recap: The Stock Exchange of Thailand corrected slightly after outperforming the region over the past two weeks and beating year-end targets at about 1,300 points, with no new factors to drive the market. Trade was quieter than in the previous week as investors did not want to hold positions during the long holiday.
The SET index moved in the range between 1,326.68 and 1,342.53 points and closed on Friday at 1,334.95, up 0.82% from the week before, on daily average trade worth 34.1 billion baht. Foreign investors were net buyers of 4.32 billion baht and brokers 2.3 billion. Local institutions were net sellers of 1.92 billion baht and domestic retail investors sold 4.71 billion.
Big movers: Ananda Development (ANAN), a specialist in condominiums near the skytrain, made a weak debut on Friday, closing at 3.80 baht, 9.52% below its IPO price of 4.20.
Confirmation that 3G licensing will go ahead led to brisk activity in ICT shares, but ADVANC fell 2.7% to 214 baht as investors had priced in the good news earlier. ADVANC parent INTUCH gained 1.2% to 65 baht. PTT rose 1.9% to 326 baht and SCB gained 4.6% to 170 baht. BLAND remained tops in volume, up 3.25% to 1.27 baht.
Newsmaker: China is expected to announce further economic stimulus measures after new leader Xi Jinping signalled he will focus on promoting consumption.
- Hope rose for a solutions to the US fiscal cliff problem amid signs that Republicans' opposition to President Barack Obama's proposal for limited tax increases was weakening, said Country Securities Group.
- The 3G saga may not be over yet despite the Central Administrative Court's dismissal last Monday of a petition by the Ombudsman, saying it was not a directly affected party. The Green Politics Group has asked the Ombudsman to petition the Supreme Administrative Court to look into the 3G auction. If this effort fails, Green Politics will ask a consumer protection agency to file a complaint. A group of senators, meanwhile, has asked the Ombudsman to seek a ruling from the Constitution Court on the authority of the NBTC.
- The Finance Ministry will speed up its planned divestiture of its shares in listed and non-listed companies.
- The reduction in the corporate income tax rate could cause the Revenue Department to fall short of its collection target in fiscal 2013, cautions director-general Satit Rungkasiri. On Jan 1, corporate income tax rates will fall to 20% from 23% now and from 30% last year.
- The Bank of Thailand projected 2013 GDP growth at 4.6%, in line with forecasts by other institutions, on the back of the government economic stimulus policy. Spending on water management projects worth 350 billion baht and basic infrastructure worth 2.2 trillion over several years, coupled with more spending by consumers earning higher minimum wages, should help offset increasing external risks, notably in Europe.
- The retail industry is expected to grow by 7-8% next year on the back of rising farm product prices and higher wages, which will increase purchasing power. The biggest winner will likely be the convenience-store segment, which is projected to expand by at least 15%, said the Internal Trade Department.
- The lawyer representing Siva Nganthavee will this week appeal against the Civil Court's verdict in one of the cases against Banpu Plc, demanding the president and chief executive of the coal miner as well as two directors be held responsible for billions of baht in damages after Mr Siva's company was allegedly cheated out of an opportunity to develop a major project in Laos.
- Central Plaza Hotel Plc (CENTEL) reported a 225% year-on-year rise in third-quarter net profit to 104 million baht. For the first nine months, net profit totalled 833 million, said chairman Suthikiati Chirathivat. Hotel business revenue rose 23%, while food business revenue was up 25.5%, on the expansion of food outlets and strong growth in the tourism industry.
- Thai Tap Water Supply (TTW) has announced plans to become an integrated utilities and services provider, with annual revenue to more than double to 10 billion baht in the next five years.
- Sino-Thai Resources Development (STRD) will change its name to Asia Joint Panorama (AJP), effective this Thursday. However, the company is now in the non-performing group and suspended from trade. It will trade under a new symbol when it is allowed to resume trading.
- Siam Cement Group (SCC) expects revenue will reach 400 billion baht this year, up from 386 billion last year, thanks to growth in the cement business and return from investment. It plans to invest 200 billion baht over the next five years to expand business, focusing on Asean.
Coming up this week: Economic data releases from China, which announced November inflation and industrial production data yesterday, will continue throughout the week with retail sales, trade balance, bank lending and other figures. Japan will also announce third-quarter GDP.
- The local cosmetics retailer and distributor Beauty Community (BEAUTY) will make its trading debut on Wednesday at the IPO price of 8 baht.
- The clock is ticking on negotiations to avoid the US fiscal cliff, which could have implications for US equities this week.
- The US Federal Reserve will stage a two-day meeting tomorrow and Wednesday, while EU leaders will hold a summit on Wednesday and Thursday to discuss banking and fiscal issues.
- Markets will watch Egypt, where protests are intensifying ahead of Saturday's planned referendum on a controversial constitution.
Stocks to watch: Asia Plus Securities recommends banking and hire-purchase stocks due to aggressive bookings of 28,488 cars in the first six days of a motor show, on course for a record. Heavy bookings by first-time car buyers to take advantage of tax breaks before they end on Dec 31 will benefit the auto hire-purchase sector in the fourth quarter and throughout the first half of 2013. TCAP stands to benefit the most, followed by SCB, BAY, TISCO and KK.
ASP also notes sector rotation, shifting from telecoms that were starting to become overbought, to banking. However, Thanachart Securities remains positive on telecoms shares and recommends speculative buys of INTUCH at 63.50 to 64.50 baht, ADVANC at 206-210 and DTAC at 85.60 to 86 baht. ASP suggests speculative buying in SEAFCO after the contractor posted a third-quarter net profit of 35 million baht, up both year-on-year and quarter-on-quarter, on revenue recognition from the Blue Line rail project.
Technical view: Asia Plus Securities sees support at 1,353 and resistance at 1,379 points. Thanachart Securities sees support between 1,325 and 1,335 and resistance at 1,345 to 1,350 points.