Surging Covid caseload dents investor confidence
Recap: Global stocks fell amid surging Covid-19 infections globally, with Hong Kong posting its biggest weekly drop in six months. European stocks fell along with US equity-index futures as investors weighed the receding prospects of a new American stimulus package.
The SET index moved in a range of 1,241.52 and 1,295.35 points this week before closing at 1,244.94 points, down 3.4% from the previous week, in daily turnover averaging 47.1 billion baht.
Retail investors were net buyers of 15.13 billion baht and brokerage firms purchased 1.4 billion. Institutional investors were net sellers of 10.16 billion and foreign investors offloaded 6.36 billion baht worth of shares.
Newsmakers: Massive sums of allegedly dirty money worth US$2 trillion flowed between 1999 and 2017 through some of the world's largest banks, according to a report by the International Consortium of Investigative Journalists. The investigation points in particular to five major banks -- JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank and Bank of New York Mellon -- accused of continuing to move assets of alleged criminals, even after being prosecuted or convicted for financial misconduct.
- The United States passed 200,000 deaths from the coronavirus pandemic, while a record-breaking wave of new infections has forced authorities in many European countries to reimpose lockdown restrictions.
- The Chinese vaccine developer Sinovac Biotech Ltd said on Thursday that countries running its final-stage clinical trials -- among them Brazil, Indonesia and Turkey -- will get its coronavirus shots at the same time as China, underscoring how vaccine supply agreements could cement diplomatic ties in the Covid-19 era.
- US President Donald Trump said he would nominate a replacement for the late Ruth Bader Ginsburg on the Supreme Court tomorrow, and insisted the Senate should vote on his choice before the Nov 3 election.
- An Oracle-led deal to restructure ownership of the popular video app TikTok to stave off a US ban appears to be faltering. President Trump has vowed to block any deal that allows the company's Chinese parent firm to retain any control.
- EU foreign ministers failed to agree on sanctions against Belarus, where President Alexander Lukashenko was sworn in at a secret ceremony this week despite widespread protests over a rigged election.
- Indonesia's economy is set to contract for the first time since the Asian financial crisis of 1998 as the country struggles to get virus cases under control.
- Myanmar plans to push ahead with the Nov 8 general election despite calls from opposition parties to postpone it because of a surge in coronavirus cases, which now are approaching 8,000.
- Ant Group, the financial arm of the Chinese e-commerce titan Alibaba, is planning the biggest IPO in history, raising as much as US$35 billion in a joint listing in Hong Kong and Shanghai.
- AirAsia Group says it is building a super-app from its existing mobile application and website to provide services such as e-commerce, deliveries and payments. It will be available next month in Thailand and Asean.
- Shares in HSBC plunged to a 25-year low Monday on fears the bank could be added to a Chinese list of firms deemed a threat to national security and following news it had been accused of allowing fraudulent activity to go unpunished.
- Australia's Westpac bank has agreed to pay a record A$1.3 billion (US$923 million) fine for more than 23 million breaches of money-laundering laws.
- Thailand's economic recovery is expected to take longer than previously anticipated, mainly due to the drastic decline in foreign tourist numbers, says the Bank of Thailand. It slashed its GDP growth forecast for 2021 from 5% to 3.6% as the pandemic continues to hamper international travel.
- The Stock Exchange of Thailand on Oct 1 will resume normal rules for short-selling prices with a zero-plus tick and ceiling and floor limits of 30%, as market volatility has eased.
- The government is considering an extension of excise tax reductions for jet fuel for another six months, claiming the impact of the pandemic on low-cost airlines remains unabated.
- A senior Social Security Office official defended its investment in the SET-listed Sri Panwa Hospitality Real Estate Investment Trust, saying it is in line with SSO regulations. SSO has invested about 500 million baht in SRIPANWA since 2013. So far, it has yielded around 200 million baht in returns.
- The Bank of Thailand is not concerned about liquidity in the banking system, a director said on Monday, after anti-government demonstrators called for people to close their accounts at Siam Commercial Bank.
- Krungthai Bank said it was ready to cooperate with local and international regulatory bodies to investigate fund transfers pending clearer information from the US Treasury Department's Financial Crimes Enforcement Network. KTB, Bangkok Bank, Kasikornbank and the Exit Bank were linked by the International Consortium of Investigative Journalists (ICIJ) to 92 suspicious transactions totalling US$41.35 million between 2000 and 2017.
- Hotel operators have welcomed the prospect of additional holidays in November and December but have raised concerns about unequal opportunities for hotels in different tiers.
- A seven-day quarantine for foreign tourists can be put into effect in November if the first batch of inbound tourists scheduled to arrive in October is clear of coronavirus infections, says the Tourism and Sports Ministry.
- New business registrations continued to fall in August, dipping 7% from the same month last year as the business sector frets over the pandemic.
- With rising demand for rubber gloves, products related to working from home, appliances, healthcare items and food because of the pandemic, the Commerce Ministry expects the country's overall exports to shrink by just 5-8% this year.
- The value of Thailand's digital industry is expected to climb 1.2% to 655.6 billion baht this year and surge 12.9% in 2021, driven by digital transformation, 5G and the adoption of artificial intelligence and the Internet of Things, says the Digital Economy Promotion Agency.
- SCG Packaging Plc (SCGP), the country's biggest packaging company, plans to raise as much as 39.5 billion baht in the nation's second-largest IPO this year. The unit of Siam Cement Group Plc set a price range of 33.50 baht to 35 baht for its offering of 1.13 billion shares in October.
- SET-listed developer Sansiri Plc has invested 25 million baht in a new venture, Hugs Insurance Broker Co, via wholly owned subsidiary Sansiri China Co to diversify into new business segments.
Coming up: Britain and the US will announce final second-quarter GDP data on Wednesday. Due the same day is a Chinese manufacturing PMI and update and the closely watched Tankan large manufacturers' index in Japan.
- Thailand on Wednesday will announce August industrial production, current account, private investment and consumption and July retail sales.
- The Reserve Bank of India will announce its interest rate decision on Thursday and the US will release August personal spending. Thailand will announce September manufacturing PMI, business confidence and inflation.
- Japan will release September consumer confidence and the US will announce September non-farm payrolls on Friday.
Stocks to watch: Capital Nomura Securities recommends retail businesses that will benefit from government measures to spur consumption spending. They include HMPRO, JMART, COM7, CPN, CRC, GLOBAL and DOHOME.
The broker is underweight on energy given falling crude prices and is wary of the tourism sector because of a second Covid wave in several countries. IT is more upbeat on food, technology and healthcare, with recommended stocks including TU, CPF, KCE, HANA, XO, ADVANC, INTUCH and BDMS.
Country Group Securities recommends high-dividend and growth stocks amid the low interest rate environment. Suggested stocks are ADVANC, RATCH, TTW, AUCT, VGI, BEM, MAJOR and TKN.
Technical view: Maybank Kim Eng Securities Thailand sees support at 1,232 points and resistance at 1,270. DBS Vickers sees support at 1,230 and resistance at 1,270.