Global equity run-up reflects vaccine progress

Global equity run-up reflects vaccine progress

Recap: Global stocks, including Asia ex-Japan and the FTSE, hit new highs as vaccine progress lifted the outlook for economic recovery. Good news made risky assets attractive while precious metal funds including gold and silver saw outflows.

The SET index moved in a range of 1,408.02 and 1,454.94 points this week before closing yesterday at 1,449.83, up by 0.8% from the previous week, in heavy daily turnover averaging 88.51 billion baht.

Institutional investors were net buyers of 543.77 million baht and brokers bought 119.84 million. Foreign investors were net sellers of 593.32 million and retail investors offloaded 70.29 million baht worth of shares.

Newsmakers: President-elect Joe Biden, stressing the urgency of stopping more Covid waves, says he will order Americans to wear masks in all federal buildings and on interstate transport such as airplanes and buses for the first 100 days of his presidency.

  • Americans should brace for a "surge upon a surge" in the coronavirus as millions of travellers return home after the Thanksgiving holiday, US government scientist Anthony Fauci has warned. New daily cases on Thursday in the US exceeded 200,000 for the first time.
  • President-elect Biden presented his economic team on Tuesday and pledged they would lead the charge on a plan to provide more relief for the faltering US economy, which his nominee for Treasury secretary -- former Fed chief Janet Yellen -- called an "American tragedy".
  • Britain on Wednesday became the first Western country to approve a Covid-19 vaccine for general use, announcing a rollout of the Pfizer/BioNTech drug from next week in a historic advance for humanity's fightback against the virus.
  • Europe's medicines regulator said on Tuesday it would decide by Dec 29 whether to grant emergency approval to the Covid-19 vaccine developed by Germany's BioNTech and its US partner Pfizer, ahead of a rival treatment from US-based Moderna.
  • Trade talks between Britain and the EU have run into fresh problems with Britain complaining the EU has introduced "new elements" just days before a deadline to reach a deal. Businesses fear chaos if Britain formally exits the bloc on Dec 31 without a trade pact.
  • Australia's parliament on Thursday passed legislation giving the federal government power to veto any agreement struck with foreign states, a move likely to anger China and intensify a bitter diplomatic spat between the two countries.
  • Japan has announced a plan to ban sales of new petrol-fuelled cars in 15 years' time as part of efforts to reach carbon neutrality by 2050.
  • China's factory activity grew at its fastest pace in over three years in November, statistics showed, as the world's second-largest economy continued its recovery from the coronavirus.
  • Hong Kong and Singapore further delayed their keenly anticipated travel corridor, a setback for the region's airlines and tourism businesses seeking to start a recovery from the pandemic.
  • Malaysian authorities are preparing to file charges against Top Glove Corp over poor worker accommodation that has been linked to more than 2,000 cases of Covid-19 among employees of the world's biggest maker of medical gloves.
  • The Bank of Thailand saw a need to preserve limited monetary policy room to use at the most effective time when it kept its benchmark rate steady at a record low last month, according to minutes of its last policy meeting published on Wednesday.
  • Recent central bank measures that aim to restrain the surging baht will likely be followed by "further strict" steps, but policymakers are unlikely to impose outright capital controls, Finance Minister Arkhom Termpittayapaisith said.
  • Thailand recorded a current account surplus of US$990 million in October, down from $1.31 billion the previous month, the Bank of Thailand said on Monday.
  • The Board of Investment (BoI) has approved 56.4 billion baht worth of new medical and biotechnological investment projects as part of a move to make Thailand a medical industry hub in Asean.
  • Thailand's tourism-dependent economy should receive 8 million foreign visitors next year and see a recovery to a pre-coronavirus pandemic level of 40 million visitors by 2024, Finance Minister Arkhom Termpittayapaisit said on Wednesday.
  • Thailand needs to revamp its tourism industry in the post-Covid period by accelerating average spending per head by 30% to offset the estimated 8 million arrivals next year, says the Tourism Authority of Thailand.
  • Consumer sentiment rose to the nine-month high in November mainly driven by higher consumption thanks to the government's co-payment scheme that subsidises 50% of food and goods purchased at small shops, and the Shop and Payback tax-rebate scheme.
  • The Joint Standing Committee on Commerce, Industry and Banking is urging the government to extend its economic stimulus campaigns for 3-6 months to continue ongoing efforts to boost spending.
  • Bank share prices rallied by 30% in November as investors gained confidence in a recovery amid progress in the development of vaccines, say analysts, although non-performing loans are expected to surge in the second half of 2021 once debt-relief schemes come to an end.
  • The Public Debt Management Office (PDMO) is preparing to create a secondary market for the trade of government savings bonds next year to facilitate investors' transactions in these debt securities.
  • The Digital Economy Promotion Agency (Depa) has introduced its digital blueprint for Thailand as a driver of digital transformation, to cope with rapid changes in technology, consumer behaviour and the business environment.
  • Bitcoin surged to all-time high at US$19,857, or 589,700 baht on Bitkub, the local digital exchange, up 30% in the past month and 177% from a year ago, spurred by worries over inflation led by the central banks' monetary easing to stimulate weak economies. After failing to break $20,000, the price eased back on profit-taking late in the week.
  • Four Thai conglomerates -- B.Grimm Group, Amata Corp, PTT Plc and Global Power Synergy Plc -- have entered into an agreement to develop an 800-square-kilometre industrial estate in Myanmar.
  • Hotel operators in Chiang Mai are monitoring the market closely after new coronavirus cases reemerged in northern provinces among a handful of Thais who had crossed the border illegally from Myanmar.
  • The Hyatt Regency Bangkok Sukhumvit Hotel launched a 1-million-baht package for a one-year stay to tap business clients, aiming to sell 100 cards and add 15% to occupancy rates by year-end.

Coming up: Canada will release November PMI on Monday. Germany will release the December economic sentiment index on Tuesday and October trade figures on Wednesday. China will release November inflation the same day.

  • The US will release November trade figures on Thursday and Britain will release October trade figures. Australia will release December consumer confidence on Saturday.

Stocks to watch: KTB Securities (Thailand) recommends taking underweight positions in stocks that enjoyed a pandemic-related run-up, given optimism about vaccines and a recovery. Its picks are MTC, CHAYO, TMB, BCPG, IRPC, MINT, SCGP and BBL.

SCB Securities recommends stocks that will recover in line with the economic cycle and have potential for growth, among them TOP, PTTEP, HMPRO and MINT, and large-cap stocks expected to benefit from fund flows, namely AOT, SCC, KBANK, PTT, CPALL and PTTGC.

Technical view: DBS Vickers Securities sees support at 1,400 points and resistance at 1,460. Philip Securities sees support 1,430 and resistance at 1,480.

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