Foreigners getting back in the game

Recap: Regional bourses last week rebounded significantly, driven by heavy foreign fund inflows after the recent sharp sell-off. The capital inflows also lifted the Thai stock market and pushed the Stock Exchange of Thailand (SET) P/E up closer to 15 times.

The SET Index climbed back beyond 1,400 and traded in the range of 1,352.86 and 1,442.19 points before closing on Friday at 1,401.08, a 4.8% gain from a week earlier, with heavy average turnover of 49.20 billion baht a day. Foreign investors were net buyers of 10.97 billion baht, local institutions 4.83 billion and brokers 2.82 billion, while retail investors pulled 18.62 billion baht out of the market.

Big movers: There was no IPO last week but MAI-listed Asia Joint Panorama (AJP) resumed trading on Wednesday after being removed from non-performing group (NPG). The stock surged to 20 baht before finishing the week at 8.75 baht, compared with 0.23 baht before the suspension.

The top three shares by trading value were big caps: TRUE gaining 7.4% to 7.25 baht, KBANK rising 7.8% to 160 baht and ADVANC increasing 3.2% to 261 baht. Natural Park (N-PARK), tops in volume, plunged 14.3% to 0.06 baht. Rayong Purifier (RPC), the top gainer, soared 45.9% to 1.59 baht, while GJ Steel, the top loser, fell 14.3% to 0.06 baht.

Newsmakers: The number of American filing new claims for jobless benefits dropped to a seven-year low of 292,000 for the first week of September, though officials cautioned that data from two states were not available.

- The Finance Ministry has forecast Thailand's economic growth will be in the range of 3.8% to 4%, down from its 4.5% projection earlier.

- The overall rejection rate of housing loan applications is now 20%, up from 12% early in the year, due to higher household debt incurred largely by the first-time car buyer scheme, says the Thai Condominium Association (TCA).

- The three-day sale of bidding documents for digital-TV auctions drew overwhelming response, with 49 envelopes purchased by 33 companies, says the National Broadcasting and Telecommunications Commission. But Col Natee Sukolrat, chairman of the NBTC's broadcasting committee, said the auctions may not go ahead as planned in mid-December, depending on the number of actual bidders.

- The Association of Securities Companies (Asco) has agreed to lower the ceiling of proprietary trading to 50% of shareholders' equity from 75% from Nov 1, but the rate of extra fees on day-trading accounts of stockbrokers has not finalised.

- PTT plans to dilute its 36% shareholding in Star Petroleum Refining Co (SPRC) through an IPO expected in mid-2014.

Coming up this week: Euro zone trade figures for July are due today.

- The US Federal Open Market Committee will meet on Tuesday and Wednesday, with results to be announced around 2am Thursday Thailand time.

- The Conference Board will release its August leading economic indicators for China tomorrow.

- The Thai government's 2-trillion-baht infrastructure borrowing bill is scheduled for second and third readings in the House on Thursday and Friday.

- Japan's trade balance for August and US existing home sales for August will be released on Thursday.

Stocks to watch: Thanachart Securities is overweight on construction due to attractive valuations following recent sharp price declines. It also has buy ratings on TTCL and STEC, and has upgraded CK from "hold" to "buy".

KGI Securities' top picks are AOT, AAV, MINT and CENTEL on anticipation they will benefit from the high tourism season in Q4. Asia Plus Securities recommends buying INTUCH, TPIPL, PS, ERW and TTA.

Technical View: Asia Plus sees support at 1,381, 1,370 and resistance at 1,422, 1,461 and 1,519. Kasikorn Securities tips support at 1,390 and resistance at 1,423.

About the author

Writer: Nuntawun Polkuamdee & Darana Chudasri