New lockdowns hit sentiment despite Ant excitement

New lockdowns hit sentiment despite Ant excitement

Recap: A fresh wave of coronavirus-driven lockdowns in Germany and France and jitters ahead of the US presidential election sent most Asian stock markets into the red despite the excitement over the Ant Group IPO, which attracted US$3 trillion in orders from individual investors for its dual listing in Hong Kong and Shanghai.

The SET index moved in a range of 1,187.49 and 1,217.88 points this week before finishing at 1,194.95 points, closing below 1,200 for first time since early April and down 1.5% from the previous week, in daily turnover averaging 49.19 billion baht.

Retail investors were net buyers of 11.78 billion baht. Foreign investors were net sellers of 7.73 billion baht, institutions sold 3.37 billion and brokerage firms offloaded 685.13 million baht worth of shares.

Newsmakers: Early voting in the US election, both in person and by mail, has now topped 80 million, more than half of the total turnout in 2016. Many of those casting their ballots early are seeking to reduce their exposure to coronavirus.

  • The US presidential election will take place on Tuesday and a preliminary indication of the outcome should emerge by around noon Wednesday Thailand time. But it could take days more to count absentee and mail ballots, and that could be followed by weeks of court fights if the results are close.
  • Germany and France are reinstating national lockdowns as Europe confronts a surge in coronavirus cases and deaths. Spain, home to more than one million cases, has declared a national state of emergency and imposed a night-time curfew.
  • Italy has closed gyms, swimming pools, cinemas and theatres. Restaurants, bars and cafes must stop table service at 6pm offer only take-away until midnight. Contact sports are prohibited.
  • Myanmar extended a ban on international commercial flights and issuance of all types of visa until the end of November to contain the spread of the coronavirus outbreak ahead of the general elections on Nov 8.
  • Malaysia's king urged federal lawmakers on Wednesday to give their full support to the 2021 budget to be introduced next week, as Prime Minister Muhyiddin Yassin grapples with the fallout from the pandemic and a leadership challenge.
  • The Chinese financial technology giant Ant Group is preparing to make the world's largest stock market debut. Backed by Jack Ma, the billionaire founder of the e-commerce platform Alibaba, Ant is to sell shares worth about US$34.4 billion on the Shanghai and Hong Kong stock markets.
  • Lee Kun-hee, the chairman of South Korea's largest conglomerate, Samsung Group, has died aged 78. Mr Lee helped to grow his father's small trading business into an economic powerhouse, diversifying into areas like insurance and shipping.
  • A Canadian judge has allowed allow Huawei executive Meng Wanzhou's lawyers to argue that the US misled Canada in its request for her extradition on charges related to violations of US sanctions in Iran. The next hearing in the case, which could last years, is scheduled for April.
  • The student-led protests against the government will not seriously affect the domestic economy as foreign investors view them as a short-term event, less frightening than the pandemic, says Industry Minister Suriya Jungrungreangkit.
  • Mr Suriya's upbeat assessment contrasts with that of the business sector as a whole. It sees domestic political risk as a crucial factor that may compound damage to the economy, on top of the deadly outbreak, according to a survey conducted by the University of the Thai Chamber of Commerce from Oct 20-22.
  • Japan's Tokyu Department Store has become the latest Japanese retailer to pull out of Thailand. The Tokyo-listed company informed suppliers early this week that it plans to close its last branch at MBK shopping mall at the Pathumwan intersection in Bangkok in January.
  • The economy will contract by slightly less than originally forecast -- 7.7% compared with 8.5% -- according to a new Fiscal Policy Office report. It based its view on a recovery among Thailand's Asian trading partners, but without factoring in domestic political turbulence.
  • A former finance minister has proposed the 400-billion-baht economic rehabilitation fund be used to provide low-interest loans to the private sector to stabilise the economy in the long run.
  • As the majority of foreigners signing up under the special tourist visa are from China, Thailand may gradually build up this market for a healthier rebound of around 7.4 million arrivals next year, says the Tourism Authority of Thailand.
  • The tourism sector in Koh Samui is unfazed by a local coronavirus case found on the island, but operators have asked the government to be more rigorous about alternative state quarantine safety measures to prevent another incident.
  • The cabinet on Wednesday approved in principle a guideline to reopen the country for some foreign tourists and crews of foreign yachts under the special tourist visa scheme that allows long-term stays for people with lots of money and time to undergo a quarantine.
  • The National Economic and Social Development Council expects state enterprise investments totalling at least 200 billion baht to add 0.06 percentage points to economic output in 2021.
  • The use of free trade agreement privileges and the Generalized System of Preferences by Thai exporters fell by 14.8% year-on-year in the first seven months of 2020, in line with lower overall exports because of the pandemic.
  • Thailand's manufacturing production index gained momentum in September, increasing by 3.25% to 94.7 points from August, with household equipment and furniture among businesses that see bright prospects, says the Office of Industrial Economics.
  • E-commerce titans Lazada and Shopee, which have splurged to build their bases, racking up some 20 billion baht in losses over the past five years, are unsettling local distributors, dealers and modern trade operators that are losing revenue to the giants, says Pawoot Pongvitayapanu, founder of the local e-commerce platform
  • SET-listed SCG Plc (SCC), Thailand's largest industrial conglomerate, has adjusted its 2020 revenue estimate, believing it will fall by 9% from last year, not 6% as earlier expected, because of the impact of the pandemic.
  • PTT Exploration and Production Plc (PTTEP) returned to growth in the third quarter, following a 38% drop in revenue and 56% plunge in net profit in the second quarter. Revenue recovered by 19% and profit by 72% from the previous quarter, it said.
  • Tri Petch Isuzu Sales, the local distributor for the Japanese carmaker Isuzu, said its car sales for the first nine months of this year totalled 123,526 units, a 1.9% decrease year-on-year. It attributed the decline to the global economic slowdown and weak purchasing power.

Coming up: China will release the October manufacturing PMI on Monday and Thailand will release October manufacturing PMI and business confidence.

The Reserve Bank of Australia will announce its interest rate decision on Tuesday and the Eurogroup will hold a video conference the same day. Canada and the US will release September trade figures on Wednesday.

The Bank of England will announce its interest rate decision on Thursday. Due the same day are Australian trade figures for September and Thailand's October inflation rate and consumer confidence.

The US Federal Reserve will announce its interest rate decision on Friday.

Stocks to watch: Finansia Syrus Securities recommends firms expected to report good Q3 profit, among them CBG, SYNEX, SAPPE, PTG, TU, DOHOME, BCH, CHG, ZIGA, AP, ORI, SC, JWD, PRM and SISB.

Capital Nomura Securities suggests avoiding domestically focused stocks amid concern about street protests. It recommends global equities expected to post good Q3 earnings, such as electronics and food businesses. For domestic plays, suggested picks are KCE, HANA, CPF, TU and XO.

Technical view: Maybank Kim Eng Securities Thailand sees support at 1,180 points and resistance at 1,222. DBS Vickers sees support at 1,180 and resistance at 1,240.

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