Emerging market bourses enjoy best week since 2011
Recap: Emerging market stocks ended the week on an upbeat note, posting their biggest weekly gain since 2011 as investors moved into search-for-yield mode. They are counting on companies benefiting from easing coronavirus restrictions and an economic recovery propelled by a wide range of stimulus measures.
The SET index moved in a range of 1,348.99 and 1,438.09 points before closing at 1,435.70, up 7% from the previous week, in heavy turnover averaging 94.8 billion baht a day for four operating days.
Institutional investors were net buyers of 8.6 billion baht, foreign investors bought 6 billion and brokerage firms purchased 4.3 billion worth of shares. Retail investors were net sellers of 18.9 billion baht.
Newsmakers: China will ease its ban on foreign airlines from Monday, changing course a day after Washington demanded the country reopen to US airlines or face curbs on Chinese carriers flying passengers to America. Foreign airlines excluded from an earlier pact will be able to operate one commercial passenger flight to China per week initially.
- Hong Kong's legislature passed a contentious bill that outlaws disrespecting the Chinese national anthem amid a wave of protests by pro-democracy lawmakers who claimed it will encroach on people's rights and freedoms.
- Brazil and Mexico reported record daily coronavirus death tolls as governments in Latin America battled to fortify their defences with fresh lockdown orders and curfews.
- The European Central Bank beefed up its bond-buying programme on Thursday in its latest effort to support a euro zone economy pummelled by more than two months of shutdowns.
- Japan could allow business visitors from Australia, New Zealand, Thailand and Vietnam to enter the country after a decline in virus infection cases.
- Indonesia is pulling out of the annual Islamic pilgrimage to Mecca over coronavirus fears, removing the largest contingent of worshippers.
- Singapore will have to find ways to rely less on foreign workers and accelerate automation of some tasks in its post-pandemic economy, said Indranee Rajah, second minister for finance. The city-state of 5.8 million has recorded nearly 37,000 coronavirus cases, the vast majority of them among migrant labourers living in cramped dormitories.
- Google has rejected demands it pay hundreds of millions of dollars per year in compensation to Australian news media under a government-imposed revenue sharing deal.
- Indonesia's Lion Air, which suspended all scheduled domestic flights late last month, says it will remain grounded indefinitely -- including international services -- because of the impact of coronavirus-related restrictions on travel.
- The Bank of Thailand has sought the opinion of foreign-exchange dealers on whether to shift gold price quotations to US dollars for exports, imports and related activities as part of an effort to curb the baht's rapid gains. It is also considering whether to scale back issuance or temporarily scrap sales of short-dated bonds to weaken the currency.
- Thailand is forecast to see a double-digit economic contraction in this quarter, with a hard landing for private consumption and tourism, says Asia Plus Securities.
- The country's main industries and economic growth are expected to take longer than one year to return to pre-pandemic levels, while an unemployment spike is the greatest concern, says Kasikorn Research Center.
- Despite a rise in exports for a second straight month in April, the Thai National Shippers' Council (TNSC) its forecast for an 8% contraction this year. It cites uncertainty over the end of the pandemic, the weak global economy and weak purchasing power because of widespread unemployment.
- Domestic tourism stimulus measures, including proposals for gift vouchers and cash handouts, are expected to be concluded next week, says Tourism Authority of Thailand (TAT) governor Yuthasak Supasorn.
- The 14-day quarantine for visitors from high-risk provinces remains an obstacle for hotels in Phuket even though they have been allowed to reopen. Hoteliers on Koh Samui, meanwhile, are hopeful for last-minute bookings as the lockdown eases further.
- The cabinet on Tuesday approved a 90% cut in the land and buildings tax for this fiscal year, the latest move to alleviate fallout from the pandemic.
- The consumer price index, a gauge of headline inflation, fell 3.44% year-on-year in May, the biggest decline in nearly 11 years, led by lower prices for energy and fresh produce and the government's efforts to reduce living costs.
- Consumer sentiment picked up for the first time in 15 months in May, boosted by lockdown easing, government relief efforts and an economic stimulus programme.
- Investor confidence for the coming three months to August remains in neutral territory as bullish hopes based on government stimulus are offset by listed companies' performance and an uncertain economic recovery.
- Deteriorating economic conditions will lead to more interest-payment delays and defaults on debentures, with one listed company already defaulting, says the Thai Bond Market Association.
- Thailand's stock market is projected to dip over the next 1-3 months, with the net profit of SET-listed firms bottoming out in this quarter, say analysts.
- The luxury low-rise housing market remains robust, with signs of recovery last month after a drop from March to April, as the segment has real demand that has been less affected by the outbreak, says CBRE (Thailand) Co.
- The opening of the MRT Blue Line extension from Hua Lamphong to Thon Buri in the fourth quarter of 2019 boosted residential prices in the first quarter of 2020, with the area around Wat Mangkon station posting the highest increase in four years.
- Domestic smartphone sales fell 12.1% in the first quarter with Xiaomi the only brand recording year-on-year growth, according to the global research firm Gartner.
- SET-listed B.Grimm Power is designing a business action plan for wholly owned B.Grimm LNG, which has received a licence to import 650,000 tonnes of liquefied natural gas (LNG) annually.
- SET-listed PTT Global Chemical (PTTGC) is planning to acquire new assets related to specialty polymer production during the recession.
Coming up: Japan will release final first-quarter GDP data on Monday. Tuesday will see the final first-quarter GDP reading for the euro zone, Australian May business confidence and German trade figures for April.
- Australia will release June consumer confidence on Wednesday and China and the US will release May inflation data.
- The US Federal Reserve will announce its interest rate decision on Thursday morning Thailand time and Britain will release April trade figures on Friday.
Stocks to watch: UOB Kay Hian Securities Thailand recommends short-term investment in stocks of companies expected to report good second-quarter performance, such as IVL, SCC, STA, TIP and VRANDA. For defensive stocks, the firm suggests GPSC, BCPG, RATCH, BCH, CHG, SSP and SUPER.
DBS Vickers Securities Thailand recommends stocks with good fundamentals for the second quarter, with its top picks being BJC, CPALL, DIF and GPSC. High dividend yield stocks under the brokerage's coverage are KKP, TISCO, LH, TPRIME, LALIN, AIMIRT, WHART, DIF and JASIF.
Technical view: Maybank Kim Eng Securities Thailand sees support at 1,400 points and resistance at 1,460. UOB Kay Hian sees support at 1,400 and resistance at 1,450.