Economic optimism lifts global shares higher

Economic optimism lifts global shares higher

Recap: Global shares rebounded and the dollar continued climbing on Friday on optimism about the global economic recovery. The easing of global bond market yields helped lift equity sentiment. Asian stocks rose from a three-month low as Chinese stocks rebounded from an earlier sell-off prompted by rising tensions with the US.

The SET index moved in a range of 1,555.38 and 1,580.74 points this week before closing yesterday at 1,574.86, up 0.7% from the previous week, in daily turnover averaging 84.76 billion baht.

Brokerage firms were net buyers of 1.07 billion baht, foreign investors bought 351.02 million and retail investors purchased 150.25 million baht worth of shares. Institutional investors were net sellers of 1.58 billion baht.

Newsmakers: US President Joe Biden said he would unveil his economic rejuvenation plan next week, promising a major ramp-up in investment and infrastructure spending. The latter could involve spending up to $3 trillion but could be a hard sell in Congress.

  • The US recovery from the Covid-19 pandemic "looks to be strengthening", Federal Reserve chairman Jerome Powell said on Monday, but vowed the central bank would continue its efforts to aid racial minorities and other groups hurt most by the downturn.
  • Bitcoin prices continued to fall amid a retreat from assets that had earlier ridden a wave of stimulus-infused optimism among retail traders. The largest cryptocurrency was trading at a two-week low of $52,750 on (1.64 million baht) yesterday.
  • Tencent's billionaire founder Pony Ma -- China's second richest man -- has met with anti-monopoly regulators and agreed his firm will be "as compliant as possible", after rival tech giant Alibaba was battered by legal woes.
  • The European Union imposed sanctions on Monday on four Chinese officials, including a top security director, for human rights abuses in Xinjiang, the first sanctions against Beijing since an arms embargo in 1989 following the Tiananmen Square crackdown.
  • France, Germany and other EU nations called in Chinese ambassadors on Tuesday to protest at sanctions imposed by Beijing targeting their citizens, as China and Europe faced off over claims of rights abuses against China's Muslim Uighur minority.
  • The European drugmaker AstraZeneca on Wednesday revised down by three percentage points to 76% the effectiveness of its Covid vaccine after American authorities raised concerns that results reported from its US trial were "outdated".
  • The Thai Food and Drug Administration on Thursday approved Johnson & Johnson's single-shot Covid vaccine for local emergency use, giving the country a third weapon against the virus in its arsenal.
  • The Bank of Thailand cut its economic growth forecast this year to 3% from 3.2% made in December, given the impact of the second wave of Covid infections and tepid tourism. It kept its key interest rate unchanged at an all-time low, as expected.
  • The government vows to rev up a 4D scheme -- Digitalisation, Decarbonisation, Decentralisation and De-risk -- to lift economic growth this year, as it sticks to its 4% growth target.
  • Exports in February dropped a bigger-than-expected 2.6% from a year earlier, weighed down by lower gold shipments, the Commerce Ministry said.
  • Thailand is not expected to return to its pre-pandemic level of international tourist arrivals of almost 40 million until 2024, according to Finance Minister Arkhom Termpittayapaisith.
  • The cabinet has approved financial measures worth 350 billion baht, including soft loans and so-called asset warehousing, to help businesses recover from impact of the pandemic.
  • The cabinet has approved the extension of the We Travel Together scheme to cover an additional 2 million people to boost domestic tourism. Officials expressed confidence there would not be a repeat of the widespread fraud seen in earlier versions of the programme.
  • The government pledges to roll out the third phase of the co-payment subsidy scheme, possibly in the third quarter, but must first tackle loopholes that could give rise to fraud and re-evaluate the scheme's efficacy in stimulating spending and the overall economy.
  • Despite relatively low prospects for the country's economic growth, the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) is upbeat about achieving 4% growth in farm lending to 69 billion in its new financial year starting April 1.
  • The Customs Department is seeking ways to reduce the impact of the exemption on import tax and value-added tax (VAT) for imported goods worth up to 1,500 baht. Finance Ministry officials say the tax break hurts small local businesses that have to pay the tax on local sales, especially those made via e-commerce.
  • The State Railway of Thailand (SRT) is preparing to call bids for two double-track railway projects worth 128 billion baht in the North and Northeast, with results expected by the end of this year.
  • The Transport Ministry plans to launch three motorway projects worth 83.5 billion baht this year in areas in and around Bangkok.
  • Siam Commercial Bank (SCB) has announced a joint venture with the giant Indonesian travel portal Traveloka to offer financial services and products to Thai customers.
  • Thailand and the UK plan to sign a memorandum of understanding to set up a joint committee on commerce and economic cooperation, paving the way for a future free trade agreement (FTA).
  • The Commerce Ministry is taking steps to lift rice exports this year to 6 million tonnes, valued at around 150 billion baht, with Indonesia, China, Bangladesh and Iraq as main markets under government-to-government (G2G) deals. Exports have been falling steadily from more than 10 million tonnes annually a few years ago, and the country last year slipped into third place globally behind India and Vietnam.
  • The Tobacco Authority of Thailand (TOAT) is teaming up with the Government Pharmaceutical Organisation to produce hemp and cannabis extracts for medical purposes.
  • Huawei Technologies Thailand is joining hands with the Digital Economy Promotion Agency (Depa) to gear up for 5G, artificial intelligence (AI) and cloud development to drive Thailand's digital economy and competitiveness.

Coming up: The US will release March consumer confidence on Tuesday, Japan will release February retail sales and Germany will release March inflation data.

  • Thailand will release February industrial production, current account, trade and private consumption figures on Wednesday. The same day, Germany will release March unemployment, the euro zone will release March inflation data, and the US will release March nonfarm employment and February pending home sales.
  • Japan will release the first-quarter Tankan manufacturers' index on Thursday, and Australia will release February retail sales. Germany and the US will release March manufacturing PMI. The US will release March nonfarm payrolls and unemployment on Friday.

Stocks to watch: UOB Kay Hian Securities recommends stocks with high growth potential and prospects for good first-quarter results: SCC, BANPU, SUPER, TVO, PTT, FTREIT and WHART. Retail and tourism firms expected to benefit from continuing reopening of the economy are CPN, CRC, MAJOR, SPA and BDMS.

SCB Securities recommends selective buying of stocks that benefit from baht depreciation including electronics and vehicle-related firms. Its picks are HANA, KCE and AH. Mid- to small cap stocks that are expected to report high Q1 profit growth are STARK, TWPC, SISB and TNP.

Technical view: DBS Vickers Securities sees support at 1,530 points and resistance at 1,600. UOB Kay Hian sees support at 1,550 and resistance at 1,600.

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