Recap: Rising trade war tensions and the prospect of early elections in Italy and Britain hit European stock markets yesterday, but the weakening Chinese yuan dominated headlines, with central banks in Asia Pacific poised for more policy easing to shore up economic growth.
The SET index moved in a range of 1,647.49 and 1,681.81 points before closing at 1,650.64, down 2% from the previous week, in turnover averaging 65.1 billion baht a day.
Retail investors were net buyers of 8.9 billion baht and institutional investors bought 5.2 billion. Foreign investors were net sellers of 10.8 billion baht and brokerage firms sold 3.4 billion worth of shares.
Newsmakers: The US has formally accused China of manipulating its currency after the yuan fell to an eight-year low against the dollar, fuelling speculation that Beijing is allowing depreciation to counter threatened US tariffs. The yuan has passed 7 to the dollar, the weakest in 11 years, but has not been as weak as markets had expected.
- The value of exports from China rose 3.3% year-on-year to US$221.5 billion in July, defying market expectations of a 2% drop.
- North Korea threatened on Tuesday to carry out more weapons tests after it fired its fourth set of missiles in less than two weeks following the start of joint military exercises between the US and the South.
- Britain is seeking to fast-track a crucial post-Brexit trade deal with the US, after Prime Minister Boris Johnson dispatched his top diplomat and foreign trade minister to Washington.
- HSBC announced that group chief executive John Flint had stepped down after less than two years on the job, as the banking giant revealed decent first-half profits but warned it faced "challenging" geopolitics.
- The Bank of Thailand stunned the market on Wednesday by following the lead of other central banks with a 25-basis-point rate cut, the first decrease since 2015, in an effort to boost the economy. However, the baht still rose 0.2% against the dollar on Thursday, defying conventional wisdom that a rate cut weakens a currency.
- The Bank of Thailand and the Thai Bankers' Association plan to sign an agreement on five directives for responsible lending, including debt-service ratio, to take effect from January.
- A full draft of the new town plan for the government's flagship Eastern Economic Corridor (EEC) sailed through the approval process of the EEC Policy Committee chaired by the premier. The plan covers 8.29 million rai in 30 districts of Chon Buri, Rayong and Chachoengsao.
- Commerce Minister Jurin Laksanawisit has pledged to speed up talks on pending free trade agreements (FTAs), both regional and bilateral, including the Regional Comprehensive Economic Partnership (RCEP), Thai-EU FTA and talks with Turkey, Sri Lanka, Pakistan and Britain.
- Consumer confidence fell to a 21-month low in July, as the public was concerned about the slow economy, political instability, uncertain global economic prospects because of trade conflict, and relatively low farm prices.
- Thai tourism operators hope to obtain a windfall as travellers change their plans in light of protests in Hong Kong and Beijing's ban on individual travellers to Taiwan.
- Property developers have repeated their request for the central bank to suspend its tougher loan-to-value rules, pointing to a 13% decline in second and subsequent mortgages from commercial banks fell in the first half of this year.
- New retail space in Bangkok and the surrounding area declined by about 10% year-on-year in the first half because retailers delayed expansion, focusing instead on small stores to connect better with customers.
- The Trade Competition Commission has delivered a milestone ruling, fining M-150 Co, the manufacturer of M-150 energy drinks and a part of Osotspa Plc, 12 million baht for using market dominance to restrict fair competition. The Trade Competition Act was amended in 2017 to correct flaws that had resulted in zero successful prosecutions since 1999.
- The SEC is checking the accuracy of a claim by SET-listed PP Prime Plc (PPPM) about payments to debenture holders. Registrar Siam Commercial Bank said an automatic transfer to debenture holders' accounts was made in error, and no money had been deposited in the debenture transfer account.
- The Dutch bank ING, Thanachart Capital (TCAP) and the Finance Ministry are expected to hold stakes of 21%, 20% and 18%, respectively, in the new bank formed from the merger of TMB Bank and Thanachart Bank, say two sources familiar with the matter.
- Bank of Ayudhya (BAY) has entered a share purchase agreement to acquire a 50% stake in SB Finance Company Inc (SBF) for an estimated 1.83 billion Philippine pesos (1.08 billion baht), marking its first foray into the Philippines.
- Krungsri Consumer Group, an unsecured lending arm of Bank of Ayudhya, expects that 15% of new loan applicants will be rejected once the Bank of Thailand guideline capping a borrower's debt-service ratio at 70% for those earning up to 30,000 baht a month is adopted.
- Siam Commercial Bank (SCB) will gradually realise income over 15 years from selling the majority stake in subsidiary SCB Life Assurance to Hong Kong-based FWD Group Financial Services, plus a 15-year bancassurance agreement, worth 92.7 billion baht, its chief says.
- Mobile market leader AIS reported a net profit of 8.23 billion baht for the second quarter, up 2.9% year-on-year, due to continued growth of the mobile business and fixed broadband.
- SET-listed Thai Union Group Plc (TU), the global seafood conglomerate, said second quarter net profit rose 10.5% year-on-year to 1.5 billion baht, attributed to falling material prices and higher sales revenue from frozen seafood, as well as pet care and value-added products.
Coming up: The US and Germany will release July inflation figures on Tuesday, with the latter announcing August economic sentiment the same day. Australia will announce July business confidence and Britain will release July unemployment claims.
- Germany will release its second-quarter GDP growth estimate on Wednesday and Britain will announce July inflation. Australia will release August consumer confidence on Wednesday and July unemployment on Thursday. The US will release July retail sales on Thursday and consumer sentiment on Friday.
Stocks to watch: Asia Plus Securities recommends Thai equities gaining from the trade war, such as CPF, TFG, GFPT, BR, WHA and AMATA. High-dividend picks are LH, KKP, DCC, MCS, INTUCH, BBL, SCCC, ADVANC and EASTW.
Capital Nomura Securities suggests focusing on the down trend in interest rates, with stock picks SAWAD, AMANAH and JMART. High-dividend picks are ADVANC, INTUCH and KKP.
Technical view: Maybank Kim Eng Securities Thailand sees support at 1,630 points and resistance at 1,695. DBS Vickers Securities Thailand sees supports at 1,640 and resistance at 1,690.