Recap: US stocks retreated last week as concerns rose about Iraq and after disappointing data on US jobs and consumer spending. Trade on the Thai stock market was choppy due to profit-taking after the recent rally.
Further improvements to the country’s decrepit rail network will figure prominently in the revised infrastructure investment plan of the NCPO.
The SET Index moved in a range of 1450.95 and 1,470.85 points, before closing at 1,456.02, down 0.1% from the previous week, in heavy trade averaging 53.93 billion baht a day.
Foreign investors were net sellers of 2.03 billion baht but remain net buyers for the month of 6 billion. Retail investors were net buyers of 1.52 billion baht and brokers were net buyers of 1.06 billion. Institutional investors sold 560.78 million baht more than they bought.
Big movers: The top stocks by trading value were TRUE, up 20% on the week to 8.70 baht after its deal with China Mobile; and ADVANC, down 7.1% to 223 baht. IEC led in share volume and was the top gainer, jumping 50% to 0.03 baht. SIM was the top loser, sinking 21% to 2.94 baht.
Newsmakers: World oil prices surged as Sunni Islamist militants, after taking over Iraq’s second-biggest city Mosul, advanced toward Baghdad amid fears of an all-out civil war.
Concern over global economic growth mounted after the World Bank cut its 2014 forecast to 2.8% from 3.2% estimated in January due to bad weather in the US, the Ukrainian crisis and economic imbalances in China. It also trimmed its forecast for developing countries to 4.8% from 5.3%, foreseeing a third consecutive year of growth below 5%.
The World Bank revised down its growth forecast for Thailand from 3% to 2.5%, reflecting higher risks from household debt as well as political uncertainty.
The National Council for Peace and Order (NCPO) has outlined an eight-year (2015-22), 3-trillion-baht infrastructure development programme, or 1 trillion baht more than the plan proposed by the former government, though the financing approach is expected to be different. The programme will include rail, road, water and air transport upgrades and a revised water management project, but no high-speed trains. More details are to be discussed on Thursday.
The NCPO has approved a budget of at 2.575 trillion baht for fiscal 2015 starting on Oct 1, with a deficit of 250 billion baht, 50 billion higher than proposed by the Budget Bureau.
True Corporation completed its almost decade-long quest for a strategic partner by forging an alliance with China Mobile International Ltd (CMI) to support a regional growth plan. CMI, a wholly owned subsidiary of China Mobile Communication Co, will pay 28.6 billion baht for an 18% stake in the Thai telecom, internet and media group backed by billionaire Dhanin Chearavanont.
Kasikornbank, the country’s fourth largest lender by assets, said it achieved its retail banking business growth target for the first four months of this year, thanks largely to its provincial-oriented strategy. However, political tension during the period sapped loan demand.
Billionaire Charoen Sirivadhanabhakdi’s appetite for deals seems to be far from being sated, with market speculation that he is targeting the SET-listed developer Property Perfect Plc (PF). However, PF chief executive Chainid Adhyanasakul has denied the rumours that the liquor tycoon plans to take over his company.
Siam Cement Group in Indonesia is preparing to introduce three flagship products made at its cement plant in Karawang, West Java, with the construction industry in Jakarta as its initial market.
Amid the tepid market, the developer Sansiri says it has suspended plans to buy land this year for future development, but is pressing ahead with 19 residential project launches. It has revised its 2014 investment plan, given that the residential market looks likely to decline by at least 20%.
The national telecom regulator is floating the idea of blocking bidders with spectrum holdings above 25 megahertz of bandwidth on the 1800-MHz spectrum from taking part in the August auction for fourth-generation (4G) mobile broadband service. The move seems directed at second-ranked operator Total Access Communication (DTAC), which owns 50 MHz of the 1800-MHz spectrum.
Planet Communication Asia (PCA) will float 75 million new IPO shares at 2.80 baht each from today until Wednesday. Finansia Syrus Securities is the lead underwriter.
US retail sales rose just 0.3% in May, compared with forecasts for a gain of 0.6%. Initial claims for unemployment benefits climbed 4,000 to 317,000, against a forecast of 310,000, for the week ended June 7.
Coming up this week: The Thai Hotel Investment Freehold and Leasehold Property Fund (THIF), comprising holdings of billionaire Charoen Sirivadhanabhakdi and the country’s largest property fund IPO to date, will begin trading on the SET today.
Euro zone inflation data will be released today.
The Bank of Thailand’s Monetary Policy Committee (MPC) will meet on Wednesday.
The US Federal Open Market Committee (FOMC) will meet tomorrow and Wednesday with results to be announced around 2am Thursday Thailand time.
The water purifier company Thiensurat Plc (TSR) will debut on the SET on Thursday. It sold 86 million IPO shares at 3.50 baht each last week.
Stocks to watch: Asia Plus Securities says property plays are its top picks, in particular AP, ANAN and RML. The broker also recommends stocks that will benefit from state infrastructure projects, expected to proceed between 2015 and 2022. They include ITD, CK, STEC, UNIQ and NWR. However, it notes the share prices of most contractors are relatively high with P/E ratios exceeding 20 times. Its top picks are UNIQ and SEAFCO. The lifting of the curfew, meanwhile, will help tourism-related stocks. The top picks are MINT, CENTEL and ERW with at least a 15% upside.
Capital Nomura Securities also sees the infrastructure investment projects benefiting the construction sector, especially CK, ITD and STEC.
Technical view: Bualuang Securities sees support at 1,430 and resistance at 1,475. Asia Plus sees support at 1,421 and resistance at 1,483.