Global Covid surge, Thai protests add to risk
Recap: Global stocks remain shaky, subdued by fears that a rapid rise in new Covid-19 infections may prompt governments to tighten social restrictions. The US presidential election campaign and troubled Brexit talks add to looming uncertainties.
On the domestic front, escalating anti-government protests in Thailand could push one of this year's worst-performing stock markets even lower.
The SET index moved in a range of 1,226.95 and 1,277.64 points this week before closing yesterday at 1,233.68, down 2.6% from the previous week, in daily turnover averaging 49.29 billion baht over four trading days.
Retail investors were net buyers of 8.3 billion baht and brokerage firms bought 515.4 million. Institutional investors were net sellers of 4.7 billion baht and foreign investors sold 4.1 billion worth of shares.
Newsmakers: US President Donald Trump declared himself "immune" to Covid-19 and returned to the campaign trail, where he and rival Joe Biden held duelling town hall meetings on separate TV networks on Thursday night.
- The UK and EU remained locked in talks over a deal on their future relationship, with each daring the other to blink even after Boris Johnson's deadline for abandoning the negotiations expired on Thursday. EU leaders agreed to keep talking but also decided to step up contingency preparations should the troubled negotiations fail.
- Malaysia announced new movement restrictions in Kuala Lumpur and neighbouring Selangor on Wednesday, as the country grapples with a fresh surge of Covid-19 cases.
- The organiser of Vietnam's first Formula One grand prix has cancelled the race, having already postponed the event initially scheduled for April due to the Covid-19 pandemic.
- The coronavirus can survive on items such as banknotes and phones for up to 28 days in cool, dark conditions, according to a study by Australia's national science agency.
- Fujifilm Holdings Corp has applied for approval in Japan for its anti-influenza drug Avigan as a treatment for Covid-19. A late-stage study of Avigan showed reduced recovery times for Covid-19 patients with non-severe symptoms, it said.
- Chinese cotton mills have been ordered to stop buying Australian cotton, an Australian government source says, the latest sign of worsening trade relations between the two countries.
- China's central bank is issuing 10 million yuan (US$1.5 million) worth of digital currency to 50,000 randomly selected consumers in the country's first public test of a digital yuan payment system.
- Malaysia Airlines will have to "shut down" if its lessors decide not to back its latest restructuring plan, said group chief executive officer Izham Ismail.
- Hyundai Motor Group will invest S$400 million (US$294 million) in a new innovation centre in Singapore that Prime Minister Lee Hsien Loong says may produce up to 30,000 vehicles a year by 2025.
- Thousands of anti-government protesters dispersed peacefully from the Ratchaprasong intersection in Bangkok's inner business district on Thursday night following the government's declaration of an emergency decree and the arrests of more than 20 leaders of the protests held the previous day at Government House.
- The Federation of Thai Industries is worried over a further blow to the economy if political protests escalate, warning the country cannot endure more risks after being left exhausted by the impact of Covid-19.
- The cabinet on Monday approved tax incentives to boost domestic consumption, notably a deduction of up to 30,000 baht for purchases of goods and services from October to December, which is expected to inject 120 billion baht into the economy.
- New Finance Minister Arkhom Termpittayapaisith aims to manage the economy based on four criteria: financial liquidity, consumer purchasing power, tourism business assistance and expediting fiscal budget disbursement. He admits there is a possibility the government will seek more loans given waning domestic and external demand.
- A record 340 billion baht moved out of mutual funds in Thailand in the first nine months of the year, leaving a total of 4.8 trillion baht, down 11.6% from the end of last year, according to Morningstar Thailand.
- Cash flow of 192 billion baht is expected to circulate in the economy as a result of the three new government measures aimed at stimulating consumer purchasing power, says the Finance Ministry.
- The Bank of Thailand is considering relaxing rules related to offshore market investment for individual investors to help manage foreign exchange amid excess capital across the world.
- The central bank plans to introduce additional debt restructuring packages using targeted measures to help pandemic-hit borrowers once the second-phase debt relief scheme expires at the end of this year.
- New land appraisal prices, used as a base for land and building tax collection, may not expand by the previously forecast rate of 8% because of the impact of Covid-19, says the Treasury Department.
- Business sentiment rose for the fourth straight month in September, boosted by improving prospects, state relief measures to help people and companies struggling with the sagging economy, and stable retail oil prices.
- The government is being urged to waive the special business tax for property transactions between cash-strapped developers and new investors to avoid possible non-performing loans as the fallout from Covid-19 hits the economy and property market.
- Ngern Tid Lor Co, a microfinance company controlled by Bank of Ayudhya Plc, has picked banks to explore a potential initial public offering that could raise as much as 30 billion baht, Bloomberg reported.
- Bangkok Bank (BBL) expects its tier-one capital (shareholders' equity and retained earnings) will return to the normal ratio of 18% this year after it shored up adequate tier-one capital (AT1) through an offshore bond issue last month.
- SET-listed B.Grimm Power Plc is planning to use biomass-derived fuel for power generation as it continues to expand in the renewable energy field, says chief executive Preeyanart Soontornwata.
- Thai Beverage, the Singapore-listed leading food and beverage company, will invest 1 billion baht in fiscal 2021 to expand its food business in the Thai market, with 40-50 restaurant branches part of the expansion plan.
Coming up: Japan will announce September trade data on Monday, China will release third-quarter GDP data and Thailand will release September new car sales. China will announce the one-year prime lending rate on Tuesday.
- Britain and Canada will announce September inflation data on Wednesday. Thailand will release September trade figures on Thursday and Germany will release November consumer confidence.
- Britain will release October consumer confidence on Friday and Japan will release September inflation data.
Stocks to watch: Capital Nomura Securities recommends stocks of firms that will benefit from domestic consumption stimulus programmes, among them HMPRO, CRC, ILM, MAKRO, SABINA and CPALL. Its picks in the promising ICT sector are SPVI, COM7 and JMART.
Firms with a positive third-quarter earnings outlook are TU, CPF, ICHI, HTC, WICE, BEM, SMT, KCE, HANA, XO, SAPPE, DELTA and GLOBAL.
UOB Kay Hian Securities Thailand recommends stocks of firms with minimal exposure to the impact of the pandemic, such as CPF, TU, TIP, THRE, ADVANC, INTUCH, DIF, JASIF, SUPEREIF, BTSGIF, BCH, CHG, WHAUP, EASTW and SUPER.
Technical view: Kasikorn Securities sees support at 1,200 points and resistance at 1,250. Maybank Kim Eng Securities Thailand sees support at 1,200 points and resistance at 1,257.