Recap: World shares ticked up on Friday, buoyed by comments from US President Donald Trump that talks aimed at dialling down the damaging trade war with China were "moving right along". Investors are keeping a close watch on Opec after members failed to agree on further oil output cuts that could stem price pressure from a global glut and weak economic growth.
The SET index moved in a range of 1,558.50 and 1,589.34 points before closing at 1,558.99, down 2% on the week, in turnover averaging 40.1 billion baht a day.
Retail investors were net buyers of 5.8 billion baht and institutional investors purchased 3.4 billion in shares. Foreign investors were net sellers of 6.7 billion baht and brokerage firms offloaded 2.4 billion.
Newsmakers: President Trump hinted that a trade deal with China might be delayed until next year, or even until after the November election. While his frequently shifting comments keep everyone off-balance, China is fuming about political signals from Washington. Beijing suspended US warship visits to Hong Kong and sanctioned American NGOs in retaliation for a US bill backing pro-democracy protesters in Hong Kong. The House subsequently passed a bill to counter the "arbitrary detention, torture and harassment" of Uighur Muslims in China.
- Hong Kong's business outlook worsened further in November with the city mired in recession amid ongoing protests and a volatile macroeconomic picture. The purchasing managers' index fell to 38.5, down from 39.3 a month ago. It has been below the 50 level that divides expansion and contraction since April 2018. Hong Kong is set to record its first budget deficit in 15 years, the city's finance chief warned on Monday.
- President Trump plans to reimpose tariffs on steel and aluminium from Brazil and Argentina, hitting back at their "unfair" policies. He also threatened tariffs of up to 100% on US$2.4 billion in French goods in retaliation for a digital services tax that Washington says is discriminatory.
- Japan is preparing an economic stimulus package worth US$120 billion to support fragile growth, government officials said on Tuesday, complicating government efforts to fix public finances.
- The cabinet has approved Super Savings Funds as a new tax-saving fund to replace long-term equity funds (LTFs), for which the tax incentive is due to lapse at year-end. The ceiling contribution entitled to a personal income tax deduction will rise to 30% of annual assessable income, not exceeding 200,000 baht, for the savings fund.
- Inflows to LTFs during the first 10 months fell dramatically by more than 5 billion baht compared with the same period last year as the economic slowdown and subdued equity returns have dampened incentives, says Morningstar Thailand.
- The Bank of Thailand has allayed businesses' unease over the baht's gain, saying the currency could reverse its trend, with two-way dollar/baht movements are expected to increase next year.
- Prime Minister Prayut Chan-o-cha has called for the country to spend more in US dollars to increase capital outflows and weaken the baht.
- The Thai National Shippers Council has cut its export growth forecast for the fifth time, predicting outbound shipments will contract by between 2.5% and 3% this year, mostly because of the world economic slowdown, the trade war and strong baht.
- Consumer prices ended four consecutive months of deceleration in November after rising by 0.2% year-on-year.
- Initial public offerings are expected to continue unabated next year regardless of economic conditions or stock market fluctuations as there is still a need to raise funds through the capital market, says Finansia Syrus Securities.
- Foreign investors continued to be net sellers of Thai equities worth 7.7 billion baht last month, a trend seen across most Asian bourses, says the Stock Exchange of Thailand.
- Zero-coupon debentures may become more popular as issuers and fixed-income mutual funds are seeking a way to reduce the impact from the 15% withholding tax imposed on gains from fixed-income mutual funds.
- The Revenue Department is warning 3 million individuals and 200,000 corporate entities to enter the formal tax system or risk facing backdated tax payment investigations.
- The cabinet on Tuesday approved a royal decree and two ministerial regulations to allow owners of many types of property to enjoy deductions of 50-90% under the Land and Building Tax Act which is due to come into force on Jan 1.
- The Energy Fund Administration Institute said the reduced retail price for gasohol E85 will end sometime in 2020 as the fuel has not been embraced by motorists over the past decade.
- TMB Bank has raised 38 billion baht through its shareholders' exercise of transferable subscription rights (TMB-T1) for newly issued shares as part of its planned acquisition of Thanachart Bank, worth 167 billion baht.
- Advanced Info Service Plc (ADVANC) and Total Access Communication Plc (DTAC) have expressed concerns over possible technical impediments to the use of 2600-megahertz spectrum in February's 5G licence auction as 20 megahertz of bandwidth on the range is being used by the army's security agency.
- DTAC, the country's third largest mobile operator, on Monday urged the telecom regulator to postpone the 5G spectrum auctions scheduled for February until 3500-megahertz spectrum can be offered.
- Krungthai Card Plc (KTC), an unsecured loan provider under Krungthai Bank, is poised to set aside higher loan-loss provisions next year as the economy will likely remain sluggish, a new financial reporting standard is implemented and business expands.
Coming up: Germany will release October trade figures on Monday. On Tuesday, China will release November inflation, Britain will announce October trade figures, Germany will release the December ZEW economic sentiment index and Australia will announce November business confidence.
- The US will announce November inflation on Wednesday. On Thursday, Britain will hold its general election, the Federal Open Market Committee will release its economic projections, the European Central Bank will hold a press conference, and Germany will announce November inflation.
- Japan will release the fourth-quarter Tankan large manufacturers' index on Friday, Australia will release December consumer confidence, Germany will release preliminary December manufacturing PMI and the US will announce November retail sales.
Stocks to watch: Tisco Securities recommends BJC, saying its share price has bottomed out and a rebound is in sight from this quarter and into next year. Recommended dividend stocks in Q1 next year are AP, BBL, KKP, MAJOR, QH, SCB, SCC and TVO. Equities poised to gain from an upward revision in credit ratings are BBL, KBANK, SCB, KTC and MTC.
- Merchant Partners Asset Management recommends dividend shares such as ADVANC, INTUCH, LH and SPALI.
Technical view: Merchant Partners sees support at 1,548 points and resistance at 1,575. Asia Plus Securities sees support at 1,500 and resistance at 1,600 points.
