Optimism about US-led recovery lifts shares

Optimism about US-led recovery lifts shares

Recap: US shares rose on Friday amid optimism over the prospect of economic recovery bolstered by favourable US data. Asian shares advanced in the morning with the regional benchmark heading for the best week in three months.

The SET index moved in a range of 1,547.14 and 1,595.45 points this week before closing yesterday at 1,581.98, up 1.9% from the previous week, in daily turnover averaging 110.62 billion baht.

Institutional investors were net buyers of 8.38 billion baht and brokerage firms bought 2.14 billion baht worth of shares. Foreign investors were net sellers of 7.08 billion baht and retail investors offloaded 3.44 billion baht in shares.

Newsmakers: US President Joe Biden's push to get major economies to agree on a 15% minimum tax rate for multinational corporations has hit turbulence after Ireland's finance minister expressed "significant reservations" about the plan.

  • The number of US workers seeking and receiving unemployment benefits through state and federal programmes has reached the lowest level since the pandemic began, as 22 states prepare to end a $300 monthly benefit ahead of schedule.
  • Amazon.com is buying the Hollywood studio MGM in an $8.45-billion deal that the e-commerce company is betting can jump-start its Prime Video streaming platform and position it to compete with industry heavyweights including Netflix and Walt Disney Co.
  • The French energy group Total and US-based Chevron have suspended some payments from a gas pipeline that would have reached the Myanmar military. Total and Chevron hold 59.2% of the shares in the pipeline that feeds Thailand, with Thailand's PTTEP Plc and junta-linked Myanma Oil and Gas Enterprise holding the remainder.
  • A Dutch court ordered the oil giant Shell on Wednesday to slash its greenhouse gas emissions in a landmark victory for climate activists that could have implications for energy firms worldwide.
  • Shareholders of two US oil giants rejected their responses to climate change on Wednesday, installing activist board members at ExxonMobil and directing Chevron to deepen its emissions cuts.
  • The International Energy Agency has called for an immediate ban on new oil, coal and gas development, saying it's the only way to ensure the world can meet the climate goals of the Paris agreement.
  • Oil prices pushed higher yesterday, with benchmark Brent crude testing $70 a barrel for the first time in two years, supported by expectations of a strong rebound in global fuel demand in the third quarter.
  • Gold has been one of the best-performing commodities this month, erasing almost all of this year's losses. Investors have been lured back by gold's appeal as an inflation hedge, driving prices closer to $1,900 an ounce.
  • Energy regulators in China's Sichuan province are asking local power companies for information on cryptocurrency mining, potentially leading to a clampdown in the country's second-biggest bitcoin production hub.
  • The US Department of Commerce has recommended preliminary anti-dumping duties of up to 21% on car and light truck tyres exported from Thailand. Those exports were worth $2 billion in 2019. It also said tyres from South Korea, Taiwan and Vietnam had been dumped at below-market prices in the US.
  • The Chulabhorn Royal Academy is preparing to import 1 million doses of Sinopharm vaccine in June, and to oversee their distribution to groups that can use the jabs, to "plug the gaps" in the government's chaotic vaccine programme. The FDA approved Sinopharm yesterday, following the shock intervention of the royally affiliated medical research institute.
  • Thailand is in dire need of a great overhaul in the post-Covid period with a focus on narrowing economic disparity and investing in advanced technology and environmental conservation, says the head of the National Economic and Social Development Council (NESDC).
  • The NESDC said the impact of the pandemic pushed the country's official unemployment rate to a 12-year high of 1.96% in the first quarter. The official rate counts anyone who works for even one hour in a week as employed. The real unemployment rate is several times higher.
  • Thailand's economy has been now been mired in a contraction for five consecutive quarters, counting the 2.6% annualised drop in GDP in the first quarter of this year.
  • The economy could still grow 2% this year, if the government meets its target of 100 million Covid vaccine doses within the year, said Don Nakornthab, head of the Financial Stability Department at the Bank of Thailand.
  • The state-owned Government Savings Bank (GSB) is offering soft loans totalling 10 billion baht to help small and medium enterprises (SMEs) in the tourism sector improve their liquidity, says president Vitai Ratanakorn.
  • The Thai Bankers' Association is committed to granting soft loans worth 100 billion baht to small businesses under the Bank of Thailand's amended scheme for the next six months.
  • Exports are maintaining healthy growth momentum as the world economy revives, fetching more than US$20 billion for three consecutive months and expanding 13.1% in April, the highest growth rate in 36 months.
  • Thai exports to Myanmar are forecast to fall by as much as 82% or 96.5 billion baht this year because of the political chaos in the country, according to the University of the Thai Chamber of Commerce (UTCC).
  • Thailand's agri-food sector contracted by 6% or 228 billion baht last year with a corresponding decline of 8% or 730,000 people in its workforce, largely due to the effects of the pandemic, according to a report by Oxford Economics.
  • Thai Airways International has started selling direct flights from four cities in Europe to Phuket as the province counts down to its hoped-for quarantine-free reopening to international travellers in July.
  • Local tour operators are aiming to offer vaccine tourism packages to people from neighbouring countries if and when vaccines private hospitals can procure jabs.
  • The Thai government's promotion of electric vehicle (EV) production is forcing the SET-listed rubber auto parts manufacturer Inoue Rubber Thailand to adopt a technology-intensive approach to create products that better match EV designs.
  • The national oil and gas conglomerate PTT Plc is preparing to make its debut in the EV assembly industry in the third quarter after the launch of battery businesses last year.
  • The value of the legal medical cannabis industry in Thailand is forecast to be worth US$237 million in 2024, according to the "Asian Cannabis Report" by Prohibition Partners. Legalising recreational cannabis use would bring the value to $661 million, it said.

Coming up: Thailand will release April industrial production, private consumption, private investment, current account and trade figures on Monday. The same day, Japan will release April industrial production and retail sales, and China will release May manufacturing PMI.

  • The Australian central bank will announce an interest rate decision on Tuesday, and the US, Germany and the euro zone will release May manufacturing PMI. Also due are German unemployment figures and May inflation data from the euro zone.
  • The US will release May non-manufacturing PMI on Thursday. Thailand will release May inflation data on Friday, and the US will release May nonfarm payrolls and unemployment figures.

Stocks to watch: Maybank Kim Eng Securities recommends energy and petrochemical stocks as global oil demand continues to soar as the economy revives, lifting oil prices to two-year highs, as well as petrochemical margin spreads. Its picks from the group are PTTEP, PTTGC, IVL, PTT and IRPC.

  • UOB Kay Hian Securities recommends stocks that can serve as a hedge against inflation such as finance and insurance firms. It also likes some property firms. Its picks are KBANK, SCB, BBL, BLA, TIP, THRE, BKI, MTI, SPALI, LH, AP and PSH. Firms that will recover along with the economy include AWC, MINT and CPN. Other interesting energy and commodity stocks include PTT, PTTGC, IVL, IRPC, TVO, CPI, TU and CPF.

Technical view: DBS Vickers Securities sees support at 1,550 points and resistance at 1,600. UOB Kay Hian Securities sees support at 1,565 and resistance at 1,600.

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