ECB uncertainty, US tech plunge rattle investors
Recap: Global stock markets were mixed following a European Central Bank meeting that left investors with questions about extra monetary stimulus, and a plunge in major US tech shares. Fears of a hard-landing Brexit were also fanned after the EU told Britain that it should urgently scrap a plan to break their divorce treaty.
The SET Index moved in a range of 1,276.38 and 1,305.85 points before closing yesterday at 1,279.96 points, down 2.4% from the previous week, in daily turnover averaging 44.80 billion baht.
Retail investors were net buyers of 5.64 billion baht and brokerage firms purchased 78.30 million. Institutional investors were net sellers of 4.03 billion and foreign investors sold 1.69 billion baht in shares.
Newsmakers: The pharmaceutical company AstraZeneca "voluntarily paused" a clinical trial of its coronavirus vaccine in what it called a routine action after a volunteer developed an unexplained illness. It said the vaccine, developed with the University of Oxford, could still be ready by year-end.
- The United States has revoked visas of more than 1,000 Chinese students and researchers under a presidential order that accused some of espionage.
- Prospects for any additional virus relief in the US dimmed on Thursday, when a slimmed-down Republican plan failed in the Senate, where Democrats voted unanimously to block it, calling it inadequate.
- Britain has defended a plan to breach its EU divorce treaty by altering terms related to Northern Ireland trade, but critics say the action would undermine Britain's global standing and hopes for an orderly exit from the EU.
- European countries have threatened sanctions against Russia over the alleged nerve agent attack on opposition leader Alexei Navalny.
- Cabinet Secretary Yoshihide Suga, the right-hand man of Prime Minister Shinzo Abe, holds a commanding lead heading into Monday's Liberal Democratic Party vote to choose a successor to Mr Abe, who is stepping down for health reasons. Whoever wins the LDP vote is assured of becoming prime minister.
- The Malaysian government said it would seek to reroute a US$10.6-billion rail project being built across the peninsula under China's Belt and Road initiative, and will reassess the cost and schedule with the Chinese contractor.
- Myanmar's election campaign began on Tuesday with Aung San Suu Kyi's party tipped for victory again, The Nobel laureate remains much loved at home, though her reputation abroad is in tatters because of the country's treatment of the minority Rohingya. Nevertheless, she is appealing for a landslide to counter the still mighty military.
- Stocks fell in Indonesia on Thursday after Jakarta reimposed social distancing measures amid a continued rise in coronavirus cases.
- The government's plan to reopen to long-term foreign visitors should be finalised before the end of October, a senior official said on Wednesday. It seeks to allow visitors to enter the country through international airports provided they do a mandatory 14-day quarantine at the port of entry.
- Thailand will have to tolerate the possibility of new virus cases when it reopens to international tourists, but the country can minimise the impact and avoid a bruising level of unemployment with risk management, says the Tourism Authority of Thailand.
- Consumer sentiment rose for a fourth straight month in August, boosted by the continued easing of coronavirus curbs, state relief programmes, low interest rates and lower diesel prices.
- Thailand's cross-border trade fell 8.5% year-on-year in the first seven months, largely due to the closure of border checkpoints and the slowing economies of neighbouring countries.
- Unemployment reached at least 2.5 million in the first half of this year and will keep growing next year if state stimulus packages are not strong enough, the Joint Standing Committee on Commerce, Industry and Banking has warned.
- The value of Thailand's exports could fall by 10% this year due to the impact of the pandemic and a persistently strong baht, said the Thai National Shippers' Council, warning that a slump in imports was also a worry.
- The government is planning new projects worth about 30 billion baht to support the farm sector and create rural jobs as it tries to revive the economy.
- The cabinet has approved a 23-billion-baht job creation scheme for new graduates in bid to revive the economy. Authorities are still fine-tuning plans for a 3,000-baht cash handout for up to 15 million people. The 5,000-baht Covid-19 relief payments will end at the end of this month.
- More taxpayers' money is about to be poured into new feasibility studies for a canal across southern Thailand, an idea that dates back four centuries and has consumed hundreds of millions of baht in consultants' fees in the past five decades. The state planning agency is also looking at a double-track railway linking Chumphon and Ranong to spur the regional economy.
- Prime Minister Prayut Chan-o-cha has also ordered fresh studies of a 100-kilometre southern land bridge consisting of a road and railway to link seaports on the Gulf of Thailand and the Andaman Sea. The idea was first floated by the Thaksin Shinawatra administration, with estimated the cost at 1.4 trillion baht.
- Business leaders have asked the state-owned Thai Credit Guarantee Corporation to raise the maximum loan guarantee to 50% to allow small firms to better access financial sources under the Bank of Thailand's 500-billion-baht soft loan programme.
- The Stock Exchange of Thailand will consider whether to retain revised rules introduced earlier this year to tame trading volatility and due to expire on Sept 30. They include daily ceiling and floor limits on share prices of 15%, compared with 30% normally, and some curbs on short-selling.
- The Bank of Thailand plans to issue new bonds based on the Thai Overnight Repurchase Rate (THOR) next year, aiming to encourage the use of the new reference rate after the London Interbank Offered Rate (Libor) is phased out starting at the end of 2021.
- Revised loan-to-value regulations for mortgage loans will remain in place to curb risks accumulating in the property sector, says the Bank of Thailand.
- Nissan has ended production of its Sylphy, Teana and X-Trail models in Thailand and has turned to subcompact, small multi-purpose and electric vehicles.
- Travel insurance premiums are poised to drop by 90% this year because of travel restrictions, says Cigna Thailand.
Coming up: Britain will release August unemployment figures on Tuesday and Germany will release the September economic sentiment index.
- Japan will release August trade figures on Wednesday, Britain and Canada will announce August inflation data and the US will release August retail sales.
- Both the Bank of England and the US Federal Reserve will announce interest rate decisions on Thursday, with Thailand releasing August new car sales the same day. Japan will release August inflation data on Friday.
Stocks to watch: Asia Plus Securities recommends stocks with strong fundamentals and immunity to domestic political conflict. The foreign shareholding should also be lower than the market average to reduce volatility from heavy sell-offs. Suggested picks are SVI, DCC, MCS, BEM, STGT and DCC.
UOB Kay Hian Securities Thailand recommends good fundamental stocks as tensions between China and the US remain intense ahead of the US presidential election on Nov 3. Its picks include CPF, TU, TIP, THRE, ADVANC, INTUCH, DIF, JASIF, SUPEREIF, BTSGIF, BCH, CHG, WHAUP, EASTW and SUPER. Stocks poised to benefit from consumption stimulus measures are CPALL, ZEN and M.
Technical view: Maybank Kim Eng Securities Thailand sees support at 1,275 points and resistance at 1,310. DBS Vickers sees support at 1,270 and resistance at 1,309.