Asian equities dip as Fed signals imminent rate hike

Asian equities dip as Fed signals imminent rate hike

Recap: While the Dow Jones set fresh records before slipping on Friday, Asian stock markets retreated as investors reassessed the minutes of the Federal Reserve's last policy meeting, which kept the prospect of a March interest-rate increase in play. The Thai stock market tracked regional bourses in muted trade.

The SET index moved in a narrow range of 1,561.46 and 1,583.31 points and closed at 1,564.59, down 0.8% from the previous week, in moderate turnover averaging 43.5 billion baht a day. Institutional investors were net buyers of 1.2 billion baht and foreign investors bought 44.1 billion. Brokers cashed out 883.5 million and retail investors sold 320.3 million baht.

Big movers: Megachem (Thailand) (MGT) gained 28% above its IPO price of 1.89 baht on its first day of trade on the MAI and finished the first week at 2.26 baht with a 19.6% rise. Top gainer RCI rose 25% to 2.88 baht, while top loser ETE fell 28.5% to 5.90 baht. MAX led in volume, losing 14.3% to 0.07 baht. Leading in turnover were PTT, up 0.8% to 399 baht; JAS, dipping 7.4% to 8.80 baht; and IVL, off 2.7% to 36 baht.

Newsmakers: US central bankers say they may need to increase interest rates "fairly soon", but appear split on the timing amid uncertainty over President Donald Trump's tax and spending policies, according to the minutes of the Fed's Jan 31 meeting. Its next scheduled meeting is March 14-15.

A Bank of Japan policymaker expressed concern that current policy, aimed at keeping long-term interest rates low to spur domestic demand, may eventually hurt the economy.

Japan's exports rose just 1.3% year-on-year in January, compared with 5.4% in December, as a decline in shipments to the US, the Lunar New Year holidays and concerns about growing trade protectionism clouded the outlook. Exports have grown for two months following 14 straight months of contraction. Imports posted their first increase since December 2014 as oil prices rose.

Britain's economy grew 0.7% in the last quarter of 2016 but growth for the whole year was weaker than previously thought and there are signs of weakness ahead, data showed, suggesting the Brexit vote will start to take its toll in 2017.

South Korea's central bank kept its policy interest rate unchanged at 1.25% as improvements in exports and inflation offset concerns over a political scandal that has hurt domestic confidence.

Thailand's economic growth slowed in the fourth quarter of 2016 to 3.0%, bringing full-year expansion to 3.2% compared with 2.9% in 2015, the National Economic and Social Development Board (NESDB) said.

The Commerce Ministry has set a lofty target of 5% export growth this year, well outstripping the projection of 2.9% by the NESDB.

The Securities and Exchange Commission (SEC) has tightened regulations governing non-rated and non-investment-grade bonds by limiting each intermediary, including asset management companies, to holding one-third of each issue and barring them from being the issuer's major creditor.

PTT Plc has expressed interest in buying in a large upstream gas field in Sarawak from Petronas of Malaysia.

Advanced Info Service (AIS) will reduce semi-annual dividend payments in 2017 to a minimum of 70% of net profit from 100% earlier. The mobile market leader said it needed more cash reserves to service debt incurred from the 900-Megahertz licence auction, and for new spectrum auctions and partnerships.

BCPG Plc, the electricity-generating arm of Bangchak Petroleum Plc (BCP), has earmarked 10 billion baht to buy a stake in a 500-megawatt Asian renewable power plant. Total capital expenditure this year is set at 16 billion.

AIA Group Ltd and Manulife Financial Corp are among bidders for the life insurance operations of Siam Commercial Bank in what could be the biggest-ever acquisition of a Southeast Asian insurer, Bloomberg reported. Other prospective bidders are said to include Thai billionaire Charoen Sirivadhanabhakdi with Singapore's Great Eastern Holdings, Hong Kong tycoon Richard Li's FWD Group, and Prudential Plc.

Thaicom Plc says it may ditch plans to launch the Thaicom 9 satellite if the government forces it to pay extra charges above the current annual licence fee.

The Treasury Department has reached an agreement with Airports of Thailand (AoT) to apply two lease rates in a new contract for Suvarnabhumi airport. Rates will be based on revenue-sharing at 5% for aviation areas and return on assets (ROA) for non-aviation space with commercial use. The formula is aimed at avoiding imposing additional costs for passengers and airlines.

Thai Union Group (TU) reported a 7.3% rise in consolidated sales to 134 billion baht for 2016. The US accounted for 39% of total sales by the world's largest tuna processor.

Property Perfect (PF) is banking on a property recovery with plans to launch 16 new projects worth a combined 22.2 billion baht this year. It aims for 80% growth in presales to 18.3 billion baht.

Ananda Development (ANAN) plans to launch 17 new projects worth a combined 41.8 billion baht, expecting 30.4 billion baht in presales with growth of 21% this year.

Siam Commercial Bank expects transactions at physical branches to decrease by 40-50% in the next three to five years as customers shift to the digital channel.

The hotel group Erawan Group Plc (ERW) plans to invest 2.2 billion baht to open nine new properties in Thailand and the Philippines and increase revenue this year by 10% from 5.6 billion baht last year.

Coming up this week: Thailand will release trade and manufacturing production figures for January today.

The US tomorrow will release revised fourth-quarter 2016 GDP figures, with forecasters expecting 2.1% growth. President Donald Trump will deliver his first address to Congress on Wednesday morning Thailand time.

Thai inflation, Chinese manufacturing and non-manufacturing PMI and euro zone manufacturing PMI are due on Wednesday, followed by the Thai consumer confidence index on Thursday.

Stocks to watch: Tisco Securities recommends buying laggards and growth stocks, with picks including JWD and TPIPL. The broker also recommends stocks that gain from government investment. They are CK, STEC, UNIQ and SEAFCO.

Thanachart Securities has buy recommendations for WORK, KKP and PLANB, and stocks with better-than-expected Q4 results, such as BEC, TPCH, BLA, HANA and MC.

Technical view: DBS Vickers Securities sees support at 1,550 with resistance at 1,590 points. RHB Retail Research tips support at 1,560 and resistance at 1,608 points.

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