Global equities mixed but SET hot streak continues

Global equities mixed but SET hot streak continues

Recap: US equity futures edged higher as investors assessed the prospects for more government stimulus to the economy. Europe and most emerging markets in Asia dipped on Friday as virus cases soared, with Shanghai and Hong Kong losing ground after Washington banned investments in firms linked to Chinese military. However, Malaysia, Singapore, Thailand, Indonesia recorded weekly gains.

The SET index moved in a range of 1,277.52 and 1,356.83 points this week before closing yesterday at 1,346.47 points, up 6.9% from the previous week, in heavy daily turnover averaging 110.2 billion baht.

Foreign investors were net buyers of 30.96 billion baht and brokerage firms purchased 3.97 billion worth of shares. Retail investors were net sellers of 29.41 billion baht and institutional investors offloaded 5.52 billion baht worth of shares.

Newsmakers: US President-elect Joe Biden has begun the transfer of power that Americans hope will turn the page on four years of divisiveness, even as his defeated rival Donald Trump refuses to concede and continues to cast doubt on the election results.

  • The global tally of people infected by the coronavirus has shot past 52 million as post-election street parties erupt in Myanmar, and Europe is once again the Covid-19 epicentre.
  • Pfizer Inc on Monday said the vaccine it is developing with BioNTech SE of Germany had prevented more than 90% of infections in a study of tens of thousands of volunteers, the most encouraging advance so far in the battle against the coronavirus.
  • Pfizer CEO Albert Bourla sold $5.6 million of his stock in the US pharmaceutical company on the same day it announced promising results for its Covid-19 vaccine candidate, filings showed on Wednesday.
  • Negotiations to secure an EU-UK trade deal will stretch into next week, officials said on Thursday, with an EU leaders' summit on Nov 19 seen as possibly the last chance to strike an accord.
  • The governing National League for Democracy party secured an even bigger landslide in Myanmar's Nov 8 election than it did in 2015, according to official results released yesterday. But the main military-allied opposition party is challenging the results, as the country's Covid surge severely curtailed campaigning.
  • Singapore Airlines plans to raise more liquidity after posting a record quarterly loss as the coronavirus decimated travel demand and charges from fuel hedging and fleet impairment weighed on its bottom line.
  • A travel bubble between Hong Kong and Singapore will begin on Nov 22, the two cities announced on Wednesday, as they moved to re-establish travel links and lift the hurdle of quarantine for visiting foreigners.
  • SoftBank said its first-half net profit soared 347%, sealing a strong recovery after a massive annual loss, as the Japanese tech holding firm shed assets to shore up its finances.
  • The 15-nation Regional Comprehensive Economic Partnership (RCEP) is scheduled to be signed at this weekend's virtual Asean leaders' summit hosted by Vietnam. The signing is the culmination of eight years of arduous negotiations among the 10 Asean states, China, Japan, South Korea, Australia and New Zealand. India backed out last year.
  • Huawei of China has vowed to invest 700 million baht to establish its third data centre in Thailand next year, in support of making Thailand a digital hub in Asean.
  • The Association of Thai Travel Agents (Atta) has urged the government to lure Chinese tourists from low-risk areas by offering quarantine-free stays starting in January under a bubble arrangement.
  • Finance Minister Arkhom Termpittayapaisith will propose that the cabinet maintain Krungthai Bank's status as a state-owned enterprise, with a duty to promote the government's economic activities.
  • Commercial banks' special mention loans (more than 30 days but less than 90 days overdue) declined in the third quarter, to 7.1% of credit outstanding from 7.5% in the second quarter. The Bank of Thailand attributed the improvement to debt relief measures for retail borrowers and small businesses.
  • The Finance Ministry plans to restructure the tax system next year to reflect changes in economic conditions and lower tax income because of the pandemic.
  • The SEC and Stock Exchange of Thailand are studying the feasibility of opening up the local stock market to listings from wholly foreign-owned firms. A pilot listing could take place in 2021, they say.
  • The Energy Regulatory Commission is planning to revise the high base tariff rate for electricity bills and study ways to liberalise the power industry to allow firms to compete with Electricity Generating Authority of Thailand to reduce household power bills.
  • The Eastern Economic Corridor Office plans to increase its investment of 1.7 trillion baht in targeted industries as global trade and investment are expected to rebound under a Joe Biden presidency in the US.
  • The decision by competition regulators to approve the CP Group takeover of Tesco Lotus was not the foregone conclusion most people expected. The vote by the Trade Competition Commission was a narrow 4-3 in favour, with the three dissenters warning that competition would be stifled now that CP controls the 2,000-outlet Tesco chain plus 12,000 7-Eleven stores and 130 Siam Makro outlets.
  • The Bank of Thailand will assess on a yearly basis whether to allow SET-listed financial institutions to make dividend payments or conduct stock buybacks in 2021 and 2022. It imposed restrictions this year, saying banks must preserve funds to cover pandemic debt relief.

Coming up: Thailand will release third-quarter GDP data on Monday and Japan will release a preliminary Q3 GDP reading. The US will release October retail sales on Tuesday.

  • The Bank of Thailand will announce its interest rate decision on Wednesday. Due the same day are Japan's October trade figures and October inflation data from Britain and Canada.
  • Japan will release October inflation data on Friday, Britain will release November consumer confidence, China will announce the one-year loan prime rate and Thailand will release October trade figures.

Stocks to watch: Finansia Syrus Securities has a positive outlook on bank stocks as the Bank of Thailand will allow banks to pay dividends after stress tests suggest there is adequate capital for reserves. But payment will be limited to 2019 operations and must not exceed 50% of net profit. FSS expects KKP to provide a dividend yield at 7.2%, followed by TISCO and SCB at 5.2% and 4.4%, respectively.

  • The brokerage expects the entertainment sector will recover gradually with 2021 earnings growth up 54% from this year. It recommends RS at a target price of 22 baht. RS reported its Q3 net profit rose 20% from the previous quarter, but was down 41% year-on-year.

Capital Nomura Securities recommends stocks of firms that beat Q3 profit estimates, including BDMS, EGCO, HTC, JMT, JMART, SVI, PTG MC, ICHI, OSP and SAPPE.

Technical view: Capital Nomura sees support at 1,319 points and resistance at 1,364. Finansia Syrus sees support at 1,300 and resistance at 1,350.

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