Global investors ride shutdown rollercoaster

Recap: Global stock markets endured wild swings last week. Most plunged on worries about the US government shutdown over the budget impasse, and a potential debt default if lawmakers fail to raise the debt ceiling by Oct 17, before bouncing back on anticipation that the Federal Reserve will not start reducing its stimulus this year.

The SET Index traded in the range of 1,381.26 and 1,432.45 points before closing at 1,427.72 points, up 0.7% on the week, with moderate turnover of 33.85 billion baht a day. Foreign investors remained net sellers of 4.69 billion baht. Brokers were net buyers of 1.12 billion, local institutions bought 2.58 billion and retail investors 986.42 million baht.

Big movers: Winner Group Enterprise (WINNER) debuted on the MAI and closed on Friday at 3.50 baht, 75% above the IPO price at 2 baht.

The top three in turnover were TRUE, up 8.2% to 8.55 baht; KBANK, down 2.75% to 177 baht; and SCB, unchanged at 154 baht.

International Engineering (IEC), tops in volume, was steady at 0.04 baht. AEC Securities (AEC), renamed from United Securities, was the top gainer rising 23.7% to 12 baht. Food and Drink (F&D), the top loser, shed 15.3% to 33.25 baht.

Newsmakers: The US budget deadlock and impasse over raising the debt ceiling have sparked investors' hopes that the Fed will refrain from scaling down its stimulus this year.

- JPMorgan Chase estimated each week of a government shutdown would reduce the annualised pace of Q4 economic growth by 0.12 percentage point.

- The Constitution Court dismissed petitions seeking an injunction against forwarding a charter amendment on the composition of the Senate to His Majesty the King for royal endorsement. However, other challenges are still pending.

- The Constitution Court on Friday ruled unanimously that the 2014 Budget Bill was constitutional.

- The government has cut its inflation target this year to between 2.1% and 2.6% from an earlier projection of 2.8% to 3.2% due to easing oil prices and the strong baht. Commerce Ministry figures showed inflation based on 450 consumer items hit a 46-month low in September at 1.42% year-on-year against 1.59% in August.

- Total Access Communication is proposing another attractive trade-off to its concession owner CAT Telecom in a bid to get much-sought-after fourth-generation (4G) mobile broadband off the ground. DTAC proposes to provide 4G service under a wholesale-reseller agreement, much like the contentious contract CAT previously signed with True Corp.

- WHA Corp, the SET-listed warehouse and logistics firm, has joined with KPN Group, a high-rise property developer, to build a 710,000-square-metre warehouse with a solar rooftop at a cost of 3.6 billion baht.

- Nok Air will offer flights from its Don Mueang hub to Hua Hin starting on Nov 15 to raise its domestic feeder route footprint. The budget airline will be the first carrier in many years to offer a scheduled service to the beach resort.

- Mobile market leader Advanced Info Service is gearing up for fourth-generation (4G) network expansion on multi-frequency networks next year.

Coming up this week: The local market focus will shift to the Senate debate on the 2-trillion-baht borrowing bill to finance government infrastructure investments.

- Thai banks will open the third-quarter earnings season with results later this week.

- Global trade is expected to be volatile until the US shutdown and debt ceiling disputes are resolved.

- Thaire Life Assurance's first trading day is scheduled for Oct 10. It set its IPO price at 9 baht.

Stocks to watch: KGI Securities recommends stocks that benefit from China's rising demand for petrochemicals and from the rise in shipping freight rates. It has buy ratings on PTTGC, IVL, IRPC, TTA and PSL.

Asia Plus Securities recommends stocks benefiting from the tourism high season in Q4. AOT and ERW are its top picks.

Technical view: Krungsri Securities sees support at 1,416 and 1,390 and resistance at 1,440 and 1475. KT Seamico sees support at 1,396 and resistance at 1,431 and 1,450.

About the author

Writer: Nuntawun Polkuamdee & Darana Chudasri