Fate of stimulus binge on investors' minds

Fate of stimulus binge on investors' minds

Recap: Global shares fluctuated ahead of the release of key US jobs data yesterday, which could give investors more clues about the strength of the economic recovery and how much longer officials will continue big economic stimulus programmes.

The "meme stock" frenzy gripping retail investors returned, resulting in a wild ride for shares of the US cinema chain AMC Entertainment Holdings. Meanwhile, gold was set for its worst week since March.

The SET index moved in a range of 1,578.09 and 1,627.67 points this week before closing yesterday at 1,611.53, up 1.87% from the previous week, in daily turnover averaging 100.91 billion baht.

Foreign investors were net buyers of 5.19 billion baht and brokerage firms bought 466.14 million baht. Institutional investors were net sellers of 3.71 billion baht and retail investors offloaded 1.95 billion baht worth of shares.

Newsmakers: Member nations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Wednesday agreed to allow Britain to start the process of joining the pact, Japan's economy minister said.

  • The World Health Organization approved the Sinovac Covid-19 vaccine for emergency use -- the second Chinese jab to receive the WHO's green light.
  • New applications for unemployment benefits in the US dropped below 400,000 for the first time since the pandemic caused mass layoffs, government data showed on Thursday.
  • Gold edged down from a five-month peak amid comments from Fed officials that pointed to a tapering of stimulus. Prices have held around $1,900 an ounce on growing demand for a safe-haven asset.
  • Cryptocurrencies such as bitcoin are a "farce" and a symptom of bubbles forming in financial markets, Amundi chief investment officer Pascal Blanque said on Thursday. Bitcoin, trading at around $39,000, fell 35% last month after China doubled down on efforts to prevent speculative and financial risks by cracking down on crypto mining and trading.
  • The EV maker Tesla has filed applications with the US Patent and Trademark Office to use its "T" logo design and two other iterations of its "Tesla" logo for use in restaurant services.
  • Global food prices jumped to their highest level in nearly a decade in May, soaring 40% from a year ago, the UN Food and Agriculture Organization said. The FAO food price index has risen for 12 straight months, driven by higher costs of vegetable oils, sugar and cereals.
  • Facing scrutiny at home, billionaire Jack Ma's Ant Group is building a government relations team to burnish its reputation with policymakers in the Asian markets on which its international ambitions now hinge.
  • The beleaguered airline PT Garuda Indonesia is considering trimming its Airbus A330 orders and reducing the number of wide-body jets in its fleet, as it overhauls its business to survive the pandemic.
  • After kicking their massive lending powers into overdrive to help the nations hardest hit by Covid-19 last year, the IMF and the World Bank are now focusing on getting vaccines to poor countries to keep the pandemic from derailing the global economic recovery.
  • Opec and its allies on Tuesday approved an earlier decision to go ahead with production increases over the next two months, as they see the oil market tightening further than previously anticipated.
  • Oil majors are under growing pressure to stop drilling for crude to help curb climate change, but companies say they will wean themselves off fossil fuels at their own pace.
  • Parliament on Wednesday passed by a narrow margin the first reading of a 3.1-trillion-baht budget bill for the 2022 fiscal year starting Oct 1, aimed at reviving an economy hit by coronavirus outbreaks.
  • The cabinet on Tuesday approved a combined 164 billion baht worth of fresh measures to help alleviate the hardships of people affected by the pandemic, as well as to fund public health projects.
  • The government will introduce a new 50% co-payment subsidy for the monthly salaries of employees of small and medium-sized enterprises (SMEs).
  • The Employers' Confederation of Thai Trade and Industry (EconThai) is concerned about the impact of high underemployment on purchasing power. The latest data showed the number of unemployed individuals -- defined as people working less than 20 hours a week -- had reached 4.3 million since the pandemic began last year.
  • The Thailand Regional Economic Sentiment Index dipped in all regions in May except the Northeast and the East following the third wave of the pandemic in April, the Fiscal Policy Office said.
  • Thailand's exports are expected to rise 15% in the second quarter from the rock-bottom base of a year earlier, powered by improved global demand, the Thai National Shippers Council said.
  • The value of cross-border trade rose 26.7% year-on-year in the first four months, increasing the government's confidence that the figure will grow 3-6% this year after declining 1.7% in 2020.
  • The manufacturing production index (MPI) increased in April by 18.5% year-on-year to 91.88 points; however, capacity utilisation decreased due in part to the impact of the third wave of Covid-19.
  • The Bank of Thailand has introduced a new auto loan debt mediation programme, aiming to help 100,000 borrowers ease their debt burden.
  • State-owned GH Bank targets 4 billion baht in online sales of second-hand houses this year, 14% higher than last year, even as the pandemic batters the economy, says president Chatchai Sirilai.
  • Thailand-based Flash Group, which provides e-commerce logistics services, including the delivery service Flash Express, says it has become the country's first unicorn with a valuation topping US$1 billion after a new funding round.
  • The Chinese automaker Great Wall Motor (GWM) is transforming the former GM Thailand plant in Rayong into its first smart factory in Southeast Asia in a move to boost sales in international markets.
  • Taiwan-based Foxconn has announced a partnership with the majority state-owned energy group PTT Plc to make electric cars in Thailand, adding to a string of such deals by the iPhone assembler as it makes forays into the car market.

Coming up: China will release May trade figures and Germany will release April factory orders on Monday. Japan will release first-quarter GDP and April current account data on Tuesday, Germany and the euro zone will release April industrial production and June economic sentiment. The same day, the euro zone will release first-quarter employment data, and the US and Canada will release April trade balance figures.

  • China will release May consumer and producer prices, Germany will release April trade figures and the Bank of Canada will announce its policy decision on Wednesday. The European Central Bank will hold a briefing on its latest policy decision on Thursday, and the US will release May inflation data.
  • The US will release May federal budget balance and June consumer sentiment, and Japan will release the second-quarter tankan survey of large manufacturers.

Stocks to watch: Capital Nomura Securities recommends investment in cyclical, inflation-hedging, value and laggard stocks. Its picks are BBL, BDMS, BJC, CPALL, CPF, TOP, TVO, HANA, SCC, SCGP and SPALI. Among mid- to small-cap stocks, the brokerage likes SPA, ICHI, SAPPE and BEC.

Stocks that are expected to be added to the SET50 Index are STGT, IRPC, STA and KCE, while those expected to be added to SET100 are STGT, RCL, PSL, PTL, SYNEX, SINGER, ICHI, TKN and AAV.

UOB Kay Hian Securities recommends energy, petrochemicals, insurance and high-dividend stocks including PTT, PTTGC, IVL, IRPC,TVO, CPI, TU, CPF, THRE, TIP, TQM, ADVANC, BTSGIF, CPNREIT, AIMIRT, FTREIT, EASTW, WHAUP, TTW and TIP.

Technical view: UOB Kay Hian sees support at 1,606 points and resistance at 1,680. SCB Securities sees support at 1,600 and resistance at 1,645.

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