Strong economic signals lift stocks worldwide

Strong economic signals lift stocks worldwide

Recap: Global stocks hit record highs on Friday, spurred by US government stimulus impact, strong corporate earnings, and Chinese economic data showing clear signs of recovery. Countries that are ahead in the vaccination race have all helped push global equities to new heights.

The SET index moved in a range of 1,539.24 and 1,562.07 points this week before closing yesterday at 1,548.96 points, down 1.11% from the previous week, in daily turnover averaging 83.84 billion baht for just two operating days.

Retail investors were net buyers of 5.4 billion baht and foreign investors bought 269.41 million. Institutional investors was net sellers of 5.13 billion baht while brokerage firms sold 541.08 million baht worth of shares.

Newsmakers: President Joe Biden was preparing yesterday to welcome Japanese Prime Minister Yoshihide Suga for his first in-person summit, with the leaders expected to announce a $2-billion 5G initiative as part of a US push to compete with China.

  • China's imports and exports boomed again in March, data showed on Tuesday, as the recovery in the world's number-two economy continued apace and demand picked up in key overseas markets. The country announced an 18.3% year-on-year surge in GDP -- albeit from the rock-bottom base of the first quarter of 2020 when the pandemic was at its worst.
  • Mitsubishi Motors Corp is cutting production by a combined 7,500 vehicles in Japan and Thailand in April due to difficulty in securing computer chips, executives said on Monday.
  • The cryptocurrency exchange Coinbase made a dramatic US stock market debut on Wednesday, with a valuation of $82 billion, amid frenzied interest in bitcoin and other virtual currencies despite concerns about a bubble. Bitcoin was trading yesterday near $62,200 (1.94 million baht)
  • Microsoft has agreed to buy the artificial intelligence company Nuance Communications for $16 billion, extending a run of big acquisitions to accelerate growth in everything from healthcare to video gaming.
  • People will "likely" need a third dose of the Pfizer Covid-19 vaccine within a year of being fully vaccinated, the company's chief executive said on Thursday. Albert Bourla also said that annual vaccinations against the coronavirus may well be required.
  • The European Union said on Wednesday that it would obtain 50 million Pfizer vaccine doses earlier than expected, as rival drugmaker AstraZeneca faces a fresh setback after Denmark banned its use over links to blood clots, which European health regulators have stressed are "very rare".
  • The Thai government says it is confident it can overcome the current Covid crisis without needing to impose a nationwide lockdown. New cases yesterday reached a record 1,582 as people began streaming back to the capital after the long Songkran break.
  • More working from home and remote schooling will be in the cards for many people, at least for the next two weeks, as authorities try to wrestle the virus into submission. Provincial governors, meanwhile, will be given free rein to decide whether curfews are needed in their jurisdictions.
  • Retailers and malls nationwide have been asked to close one hour earlier, at 9pm, as part of a business effort to help curb the third Covid outbreak.
  • The AstraZeneca vaccine will continue to be the mainstay for the country's Covid-19 vaccination programme, Public Health Minister Anutin Charnvirakul insists. As of yesterday, 581,308 people, or 0.87% of the population, had received at least one shot. Health authorities say the pace will pick up dramatically once AZ doses become more widely available in June.
  • More than 28,000 people per day could be infected by Covid-19 over the next month if no disease control measures are put in place, a senior public health official warned early this week as the third Covid wave intensified.
  • The Finance Ministry is speeding up its study on the pros and cons of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It is also working on protective measures to cushion against the impact of the pact if Thailand decides to join.
  • Two new emergency decrees -- one on the reduction of default interest rates and another to provide assistance worth 350 billion baht to business affected by Covid-19 -- came into effect on Monday.
  • Immigration rules could be revamped this year to make it easier for expats and long-term tourists to stay in Thailand, part of strategy to boost investment and tourism. They could include an end to the 90-day reporting rule and changes that would make it easier for foreigners to own houses and land.
  • The Commerce Ministry's Intellectual Property Department has approved two patents for cannabis and hemp inventions after their extracts were delisted as Category 5 narcotics.
  • Kasikornbank is exploring new services based on decentralised finance (DeFi) using blockchain and independent of central financial intermediaries as it tries to expand business regionally via the digital platform.
  • Despite a drop in car sales in February because of the second Covid wave, the electric vehicle (EV) industry is upbeat, hoping 2021 will bring significant progress for the development of its infrastructure.
  • VST ECS Thailand, a member of the Hong Kong-listed ICT distributor VST ECS Group, is expanding its reach to the EV sector as part of its diversification strategy beyond the IT sector to ensure sustainable growth.

Coming up: Japan will release March trade and February industrial figures on Monday. Sue Tuesday are reserve Bank of Australia meeting minutes, a Japanese tertiary industry activity update, and German producer prices.

  • The US will release crude oil inventory figures on Wednesday, Australia will release monthly retail sales and Canada will report March inflation and an interest rate decision.
  • Thailand will announce March trade data on Thursday, the US will release March existing home sales and the European Central Bank will hold a policy meeting. Due Friday are Japanese inflation data, German and eurozone manufacturing and service purchasing managers indices, and US new home sales.

Stocks to watch: Thanachart Securities recommends local stocks expected to rise along with global markets, especially those with strong Q1 earnings, such as electronics and petrochemical firms. For the medium term, the brokerage recommends focusing on accumulating domestic bank, retail and food stocks, which are expected to benefit from the economic recovery in the next 1-2 months. Top picks are KCE, BANPU, PSL and PTTGC.

Capital Nomura Securities says stocks that could outperform during the new Covid outbreak include HANA, KCE, SAWAD, GULF, RATCH, GPSC, INTUCH, BDMS, BCH, ICHI, SAPPE and HMPRO. It recommends SPALI for a high dividend yield.

Technical view: Finansia Syrus Securities sees support at 1,530 points and resistance at 1,600. DBS Vickers sees support at 1,500 and resistance at 1,580.

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