Recap: Most Asian equity indices tumbled yesterday as the rising death toll from the coronavirus outbreak in China rattled investors' nerves, with human transmission seen in other countries including Britain, South Korea and Thailand. Gold prices rallied as investors sought refuge amid a global pandemic.
The SET index moved in a range of 1,507.36 and 1,548.11 points this week before closing yesterday at 1,514.14, down 3.5% from the previous week, in turnover averaging 62.12 billion baht a day.
Retail investors were net buyers of 16.4 billion baht. Foreign investors were net sellers of 11.4 billion baht, brokerage firms sold 4.3 and institutional investors offloaded 1.3 billion worth of shares.
Newsmakers: Coronavirus cases in China exceeded 9,600 as of yesterday, with 213 deaths. The World Health Organization on Thursday declared the outbreak a global public health emergency.
- While the WHO says travel bans and restrictions on commerce are not necessary, the US has told Americans not to travel to China. British Airways and the Asian budget carriers Lion Air and Seoul Air are suspending all flights to China. Several other airlines including Finnair, Cathay Pacific and Jetstar Asia are reducing flights to the country.
- Google is temporarily closing all of its offices in China, Hong Kong and Taiwan as a result of the coronavirus. Other tech giants, including Amazon and Microsoft, have also taken action to protect staff from infection. Starbucks has closed half of its outlets in China.
- As of 11pm London time yesterday, Britain was no longer part of the European Union. The country is now free to negotiate its own trade pacts, but a transition period until Dec 31 will keep it inside the EU's customs union and single market.
- US President Donald Trump on Wednesday blasted his former national security adviser John Bolton as he emerged as a potential 11th hour witness in the president's impeachment trial, complicating the White House's bid for a speedy acquittal.
- British Prime Minister Boris Johnson insisted the UK can have technological progress while preserving national security, as he prepared to approve a role for the Chinese telecoms giant Huawei in developing its 5G telecoms network despite strong US opposition.
- A Los Angeles jury on Wednesday ordered Apple and Broadcom to pay $1.1 billion to a California university for infringing WiFi technology patents in what is thought to be one of the largest patent verdicts ever.
- Thai hotels are bracing for a slump in bookings as the Chinese government's ban on outbound group tours cuts the number of independent travellers, who make up 60% of all Chinese visitors.
- Thai AirAsia expects to lose 300,000 Chinese passengers during the first quarter, as flights to China make up 30% of its total revenue.
- Tourism and Sports Minister Phiphat Ratchakitprakarn says the government should not scrap visas on arrival for Chinese travellers despite the public health minister insisting on a suspension.
- Thailand is expected to lose 80-100 billion baht in income, mainly from tourism, because of the coronavirus outbreak, shaving economic growth by 0.5 to 0.7 percentage points this year, according to the University of the Thai Chamber of Commerce.
- Widespread drought, a strong baht, disarray over the fiscal budget, toxic dust and the Chinese virus outbreak may bludgeon Thailand's economic growth to below 2.5% this year, says the Thai Chamber of Commerce.
- The Fiscal Policy Office downgraded its GDP growth forecast to 2.8% this year after factoring in impacts from the coronavirus and a further delay in the 2020 budget bill.
- The government has been able to disburse 300 billion baht in obligated budget funds during the protracted delay in passing the 3.2-trillion-baht fiscal 2020 budget.
- Fresh incentives meant to spur private investment of 110 billion baht and add 0.25 percentage points to economic growth sailed through the cabinet on Tuesday. The measures include a corporate income tax deduction of 2.5 times expenditure on machinery, a one-year tax exemption for importing new machinery, and low-interest loans from the Exim Bank for exporters to modify their machinery for export.
- The Bank of Thailand says it is unconcerned about pre-finance loans for property developers going bad, given the sound financial condition of large developers.
- The Energy Ministry has ordered PTT Plc to study the feasibility of liquefied natural gas (LNG) imports from spot markets in order to take advantage of lower prices.
- The bank resulting from the merger of TMB Bank and Thanachart Bank is targeting flat lending growth as the best-case scenario, with deposit growth expected to range from flat to 2% this year.
- Kasikornbank (KBANK) has launched a 4.6-billion-baht share buyback to shore up share prices that have slid more than 10% in less than a month.
- PTT Exploration and Production Plc (PTTEP) expects compound annual growth rate of 6% for petroleum sales volume during 2020-25, in line with the "expand and execute" business strategy.
- Siam Cement Group (SCG), Thailand's largest industrial conglomerate, expects 2020 revenue to stay flat because global and local economic sentiment are unfavourable.
- WHA Corporation Plc has decreased its five-year investment budget for 2020-24 to 52 billion baht, blaming a host of risks such as the US-China trade war and bearish global economy.
- SET-listed Sena Development Plc (SENA) expects to shift focus to low-rise properties, its core business, and away from expensive high-rise condos in response to a likely economic slowdown this year.
- Coming up: China will release January manufacturing PMI on Monday and Russia will release preliminary fourth-quarter GDP figures.
- The Reserve Bank of Australia will announce its interest rate decision on Tuesday. Canada and the US will release December trade figures on Wednesday.
- Australia will release December trade figures on Thursday and the Reserve Bank of India will announce its interest rate decision the same day. Germany will release December trade data on Friday and the US will release January non-farm payrolls.
Stocks to watch: Asia Plus Securities says investors are growing more anxious about the 2019 coronavirus outbreak. Fund flows have been switching to safe-haven assets, thus lowering bond yields. The SET index has declined as the downside outlook for GDP growth and market earnings (EPS growth) worsens, with fund outflows expected to continue. Its top picks for next week are CPF and TU.
Finansia Syrus Securities recommends defensive fundamental stocks and high-dividend stocks that have experienced a minimal impact from global uncertainties. DBS Vickers Securities Thailand recommends high-dividend yield stocks including KKP, TISCO, LH, DREIT, LALIN, AIMIRT, HREIT, DIF and JASIF.
Technical view: Maybank Kim Eng Securities Thailand sees support at 1,507 points and resistance at 1,550. Finansia Syrus Securities sees support at 1,500 and resistance at 1,550.
