Trump tantrums keep traders on edge, SET dips
Recap: World stock markets retreated as investors shied away from riskier assets over renewed concerns about US President Donald Trump's controversial ban on refugees and travellers from seven Muslim-majority countries and protectionist rhetoric that fanned fears of a global trade war. Buying ahead of corporate earnings releases and hopes for dividend payments cushioned the Thai stock market against a steep fall.
The SET index moved in a range of 1,569.75 and 1,594.66 points and closed at 1,582.95, down 0.5% from the previous week, in brisk turnover averaging 50.7 billion baht a day. Institutional investors were net sellers of 2.92 billion baht and foreign investors sold 3.99 billion. Retail investors were net buyers of 5.27 billion baht and brokers bought 1.2 billion.
Big movers: Top gainer UTP surged 16.9% to close at 7.95 baht, while top loser BTWC slid 25.3% to 16.40 baht. TMB led in volume, gaining 4.3% to 2.42 baht. Leading in turnover were PTT, off 1.9% to 410 baht; AOT, up 2.5% to 416 baht; and PTTEP, steady at 97.75 baht.
Newsmakers: The Federal Reserve held interest rates steady in its first meeting since President Trump took office, but painted a relatively upbeat picture of the US economy that suggest it is on track to tighten monetary policy this year.
US economic growth slowed sharply in the fourth quarter as a plunge in soybean shipments weighed on exports, but steady consumer spending and rising business investment pointed to sustained strength in domestic demand. GDP increased at a 1.9% annual rate, preliminary figures showed, after 3.5% expansion in the third quarter.
China raised two short-term borrowing rates for the first time since 2013 in a sign that inflation fears are beginning to override the desire to spur growth. The People's Bank of China (PBOC) raised the seven-day repurchase rate -- a key tool used to adjust monetary policy -- to 2.35% from 2.25%, and the 14- and 28-day repo rates by 10 basis points.
Japan's central bank upgraded its economic growth forecasts, citing an improved global outlook and a weaker yen but the finance minister warned of "uncertainty" caused by the arrival of Donald Trump. The Bank of Japan expects GDP to expand 1.4% in the current fiscal year to March 31, compared with its previous 1% estimate, and 1.5% growth in the following 12 months, up from 1.3% forecast earlier.
The euro zone recovery is gathering speed, with growth up, inflation sharply higher and unemployment at an eight-year low. Inflation jumped to an annual 1.8% in January, the highest in four years and up from 1.1% the month before. Euro zone growth inched up by a quarterly rate of 0.5% in the fourth quarter of 2016 from 0.4% in the previous quarter.
India's economy is expected to grow by between 6.75% and 7.5% in the coming fiscal year, the finance ministry said in its pre-budget Economic Survey, roughly in line with this year's expected 7.1%.
Thailand's Fiscal Policy Office (FPO) has raised its GDP growth forecast for this year to 3.6% but marginally cut its estimate for last year to 3.2%. Contributing to this year's improvement will be accelerated state spending, higher farm incomes in line with rising commodity prices, improving private consumption, still-solid tourism and an export rebound.
Banks' bad loans by year-end are expected to be lower than last year's level, says Finance Minister Apisak Tantivorawong, as the economy will pick up speed.
Fitch Ratings expects a further deterioration in Thai banking performance this year after results for 2016 showed a rise in impaired loans and a slight decline in profitability. The rapid increase in leverage across the economy, particularly by households, has raised asset-quality risks, it said.
Thailand's industrial output rose for a second straight month in December, boosted by stronger demand for steel, electronics, rubber and jewellery.
Domestic car sales are expected to rise for the first time in five years in 2017, by 4.06% to 800,000 units, Toyota Motor Thailand said, citing new models and strong government spending among factors.
The consumer price index (CPI) rose at the fastest pace in more than two years in January, driven by higher food and oil prices. January CPI rose 0.16% month-on-month and 1.55% year-on-year.
Thai shippers are maintaining their export growth forecast of 2% this year after exports fared better than expected last year and ended three years of contraction.
Consumer confidence rose for a second month in January to the highest in 11 months, driven by government stimulus measures, improving exports and higher farm prices. The University of the Thai Chamber of Commerce (UTCC) index rose to 74.5 points from 73.7 in December.
♦CIMB Thai Bank (CIMBT) has voiced concerns that its non-performing mortgage loans will continue to grow as the debt-servicing capability of mass-market buyers deteriorates amid the uneven economic recovery. Its mortgage NPL ratio is expected to rise to 4.5% from 4% at the end of 2016.
♦BCPG Plc, the power arm of Bangchak Petroleum (BCP), will acquire a 40% stake in Petro Wind Energy Inc (PWEI) in the Philippines in a bid to expand renewable power generation to 1,000 megawatts by 2020.
Coming up this week: Indonesia will release GDP data today.
The Caixin China PMI Composite reading for January is due tomorrow.
The Monetary Policy Committee of the Bank of Thailand will meet Wednesday and is expected to leave its benchmark rate at 1.5%.
The Philippine central bank will meet on Thursday.
China will release January trade figures on Friday.
Stocks to watch: Bualuang Securities recommends short-term trading in PTT, AOT, THAI, KTB and MCOT, and high-dividend yield shares such as GLOW, IRPC, KTB, TCAP, JASIF, SC, SIRI and LPN.
Tisco Securities' recommendations for the month are ANAN, BJC, IRPC, KGI, KTB, LPN, S and TWPC. Stocks that are expected will show solid 2016 earnings are ANAN, BANPU, BEAUTY, BJC, CPALL, CPN, IRPC, MTLS, MALEE, ROBINS, S, SEAFCO, TWPC and UNIQ, while high-dividend plays (more than 4%) are AP, ANAN, ASP, BJCHI, IRPC, KGI, QH, NYT and TWPC.
Technical view: Bualuang Securities sees support at 1,550 with resistance at 1,620 points. Tisco Securities tips support at 1,570 and resistance at 1,600 points.