Recap: The Stock Exchange of Thailand moved sideways with volatile trade influenced by external factors such worries about the US credit rating and pressures from foreign capital outflow.
The SET Index traded in a range of 1,482.64 and 1,511.95 points and closed at 1,497.30, down 0.1% from the previous week, with daily average trading value of 56.09 billion baht.
Foreign investors were net sellers of 10.1 billion baht last week. The four-day sell-off that began on Tuesday was the biggest in several months. Other groups were net buyers, with institutional investors purchasing 3.30 billion baht, retail investors 5.08 billion and brokers 1.71 billion baht.
Big movers: The waste management specialist Akkhie Prakarn (AKP) made an impressive MAI debut last Thursday at 5.85, breaking the ceiling on its first day, and closed the week at 7.05 baht, against an IPO price of 2 baht. PTT closed down 1.1% at 334 baht, while Berli Jucker (BJC) rose 5.4% to 87.50 baht. ADVANC shed 2.4% to 203 baht and JMART gained 23% to 18.70 baht.
Newsmakers Political uncertainty in Europe could delay crisis resolution. In Spain, Prime Minister Mariano Rajoy has denied accepted kickbacks over the past two years when he was pushing an unpopular 60-billion-euro austerity package. In Italy, former premier Silvio Berlusconi is leading some opinion polls ahead of the Feb 25 election, largely on populist promises of generous tax rebates that the government can't afford.
- The European Central Bank kept its policy interest rate at 0.75%. President Mario Draghi said euro appreciation had dampened inflation, which promptly caused the euro to drop as investors interpreted it as a signal of a further rate cut.
- Credit Suisse revised upward Thailand's 2013 economic growth forecast to 5% from 4.4% to reflect stronger-than-expected industrial production in Q4 2012 and an improved export outlook.
- Concern is growing over US spending cuts of around $85 billion to reduce the budget deficit, scheduled on March 1, if legislators fail to negotiate a solution.
- Funds continued to flow into Asia last week but volume eased, while Thailand and South Korea registered a net outflow. Finansia Syrus Securities attributes the outflow from Thailand to concern about perceived conflict between the government and the Bank of Thailand over baht appreciation and interest rates.
- The Monetary Policy Committee (MPC) will review its 2.75% policy rate on Feb 20. Kasikorn Securities expects the rate to remain low and finish the year at 2.5%. It says the government will control inflation by freezing diesel prices. But UBS Securities expects the policy rate to rise by year-end to 3.5%, and the central bank to allow the baht to strengthen to 27 to the dollar.
- Kasikornbank is joining the Japan Bank for International Cooperation (JBIC) to offer special loans of 1.7 billion baht to assist Thai-Japanese joint ventures to be competitive in of the Asean Economic Community (AEC).
- The SME Bank has taken the unusual step of asking the Finance Ministry to compensate it for bad debts related to government public-service initiatives. Executive chairman Pichai Chunhavachira said the bank's NPLs were 40.2% or 39 billion baht of its total of 97 billion in outstanding loans. Ministry assistance would eliminate about 18% of its NPLs.
- The NBTC has approved auction rules for 24 commercial digital TV channels and says full details will be announced in either March or April.
- Berli Jucker (BJC) said last week it planned to acquire a distribution centre in Vietnam as part of its expansion drive in Southeast Asia.
- Hemaraj Land and Development Plc (HEMRAJ) has set aside 40 billion baht for investments for the next five years, including 8 billion this year for industrial estates, utilities, power and property businesses.
- Kiatnakin Bank reported a sharp 60% rise in fee income, mainly from brokerage and investment banking fees, following its merger with the finance company Phatra Capital.
- Honda Automobile (Thailand) will invest more than 20 billion baht to build a new assembly plant and expand its existing facility to tap strong domestic demand and exports. About 17.2 billion baht will be used to build the assembly and engine plant in Prachin Buri.
Coming up this week: China will report loan growth for January, Japan and the euro zone will report Q4 2012 GDP. US budget talks will continue to be closely watched.
Stocks to watch: Asia Plus Securities recommends undervalued stocks with P/E ratios below 13 times and Beta lower than 1. Recommended are TVO, INTUCH, SNC, KCAR, SMIT, MK, IFS, TK and KK.
- The cabinet last week announced the companies approved to bid for water management projects worth 350 billion baht. Among them are ITD, CK, LOXLEY, UNIQ and CNT.
- Premier Product Plc (PPP), a manufacturer and distributor of water treatment and storage systems, will make its SET trading debut on Thursday. It floated 82.5 new million shares at 5 baht each.
Technical View: Asia Plus Securities sees support at 1,483 to 1,498 points and resistance at 1,525. Thanachart Securities sees support at 1,495 and resistance between 1,510 and 1,515.
About the author
Writer: Nuntawun Polkuamdee & Darana Chudasri