Growing confidence keeps shares rising

Growing confidence keeps shares rising

If you build a sandbox, will they come?
If you build a sandbox, will they come?

Recap: Global shares extended their record highs with the MSCI All Country World Index poised for a fourth weekly advance amid growing confidence. European shares rallied after the European Central Bank raised its inflation forecast and renewed its pledge of aggressive emergency bond-buying. Emerging market shares rallied while Thai stocks continued to climb.

The SET index moved in a range of 1,605.31 and 1,636.92 points this week before closing yesterday at 1,636.56, up 1.55% from the previous week, in daily turnover averaging 163.75 billion baht.

Foreign investors were net buyers of 7.45 billion baht and brokers bought 479.28 million baht. Retail investors were net sellers of 6.1 billion baht while institutional investors sold 1.83 billion baht worth of shares.

Newsmakers: Group of Seven leaders at a summit in England have pledged to deliver at least 1 billion extra doses of coronavirus vaccines over the next year to help cover 80% of the world's adult population. The US plans to buy 500 million Pfizer doses to share internationally.

  • The US added 559,000 jobs last month as hard-hit sectors rehired workers who had been laid off during the worst days of the pandemic. But analysts warned the virus was continuing to complicate the economy despite massive government stimulus.
  • Several of the richest Americans including Elon Musk and Jeff Bezos have paid zero personal income tax in some recent years, according to an investigative report published on Tuesday, which comes as Washington weighs new proposals to address tax avoidance.
  • The G7 wealthy nations have endorsed a plan to ensure the world's biggest companies pay a minimum tax rate, probably around 15%. But Amazon.com may escape it as the tax would apply to firms with profit margin of 10% or more. Amazon's margin is below 7%.
  • China is asserting sweeping powers to seize assets and block business transactions in a new law intended to hit back against sanctions against major Chinese businesses by the US and its allies. Effective immediately, the law is intended to counter "hegemonism and power politics", said the Xinhua News Agency.
  • China's exports rose 27.9% in May while imports grew at the fastest pace in more than a decade as the global economy powers back from the pandemic, official data showed Monday.
  • Hordes of beaming tourists flew into the sun-soaked resort of Malaga on Monday after Spain opened its borders to all vaccinated travellers from all over the world.
  • The International Air Transport Association said Thursday its digital travel pass would "go live" in the Middle East in the coming weeks, as Europe and the US relax travel restrictions.
  • Shopee, Southeast Asia's e-commerce market leader, plans to expand into Colombia and Chile, Reuters reports. The Singapore-based unicorn launched a pilot in Brazil in 2019 to test the Latin American market and opened in Mexico in February.
  • Legislators in El Salvador have approved a law that will make bitcoin legal tender, making it the world's first nation to adopt a cryptocurrency.
  • The revelation this week that US officials had recovered most of the bitcoin ransom paid in the recent Colonial Pipeline ransomware attack exposed a fundamental misconception about cryptocurrencies: They are not nearly as hard to track as cybercriminals think.
  • London's financial hub status appears safe despite Brexit, says a study by the London-based think tank New Financial. It found five times more international financial activity in the UK than in France or Germany in 2019, and while there have been some shifts since then, they have not made much of a dent.
  • China's top banking regulator has warned retail investors to avoid financial derivatives, amid rising volatility in global commodities. Investors who speculate in currency, gold or other commodity futures are set to pay the same heavy price as those betting that property prices will never fall, said Guo Shuqing.
  • The Chinese ride-hailing giant Didi Chuxing has filed to list its shares in New York, in what could be one of the biggest IPOs this year. Initial news reports suggest it could raise as much as $7 billion.
  • The first new automobile assembly plant built in Detroit in 30 years has been opened by the Jeep maker Stellantis AV, which invested $1.6 billion in the facility and will hire 2,100 local workers.
  • The third wave of the pandemic is projected to end in July, which could support Thai economic growth of 5% in the final quarter if the government can maintain a vaccination rate of 400,000 doses per day, says Kasikorn Research Center.
  • Thailand is targeting 3 million foreign tourists this year, tied to a phased reopening to vaccinated visitors later this year, the Tourism Authority of Thailand said on Wednesday.
  • The government has formally approved the reopening of Phuket to vaccinated foreign tourists from July 1. But the total absence of Chinese travellers and a requirement that visitors stay on the island for 14 days (up from 7) before going elsewhere mean expectations are low.
  • South Korea is in talks with Thailand for travel bubble agreements that would also include Singapore, Taiwan, Guam and Saipan to revive tourism.
  • The Bank of Thailand bank will allow commercial banks to pay interim dividends, as lenders are strong and have sufficient capital to withstand the impact of Covid outbreaks, governor Sethaput Suthiwartnarueput said on Thursday.
  • The Federation of Thai Industries (FTI) is in talks with Chulabhorn Royal Academy to purchase Chinese-made Sinopharm vaccines for workers and to improve confidence after the Thailand Industry Sentiment Index (TISI) sank for two straight months.
  • The state-private partnership expects to start distributing Sinopharm vaccines to factory workers in five industrial estates and around Map Ta Phut port on July 9.
  • The cabinet on Tuesday approved the allocation of 2.25 billion baht to hire 10,000 new university graduates for one year, in a move to help people suffering financially from the coronavirus outbreak.
  • Finance Minister Arkhom Termpittayapaisith on Wednesday defended the executive decree to borrow 500 billion baht to combat the public health crisis, insisting the loan would not exceed the public debt ceiling of 60% to GDP. Earlier pandemic-linked borrowing has pushed that figure to around 58%.
  • Fresh investment measures including a plan to allow rich foreigners to hold 10-year visas, own land and property and pay a flat 17% personal income tax on local earnings are yet to be settled.
  • The Commerce Ministry says a new Consumer Price Index (CPI) for services will better reflect changes in service prices than the existing CPI, which gauges headline inflation. Also in the pipeline is a separate Business Confidence Index (BCI) for service business operators.
  • The venture fund of the seafood giant Thai Union Group Plc has invested in the Israeli startup ViAqua Therapeutics, which uses RNA technology to improve animal health in aquaculture.
  • Thai Airways International will start direct flights from five European cities to Phuket in July in line with a plan to reopen the island for tourists.
  • The global entertainment giant Walt Disney Company has chosen Advanced Info Service (AIS) to distribute its Disney+ Hotstar streaming service in Thailand, with high take-up expected given the rising popularity of streaming services since the pandemic started.
  • Thai stocks are expected to rise 3-5% per month over the next two months with foreign funds returning to the bourse as vaccinations pick up and foot traffic at retail stores revives, says Asia Plus Securities.
  • SET-listed Bangkok Aviation Fuel Services Plc (BAFS) plane to acquire another renewable power facility at around 700 million baht to offset a plunge in revenue in its refuelling business during the pandemic. It recently acquired seven operation solar farms with a combined capacity of 34.4 megawatts.

Coming up: The euro zone and Japan will release April industrial production data on Monday and Canada will release April manufacturing sales. The Reserve Bank of Australia (RBA) will announce monetary policy meeting minutes on Tuesday, Germany will release May inflation data and the euro zone will release April trade balance figures. The same day, the US will release May retail sales, producer prices and industrial production updates.

  • China will release May industrial production and fixed asset investment figure on Wednesday, Canada will release May inflation data and the US will release May housing starts and building permits.
  • The US Federal Reserve will announce the results of its latest policy meeting on Thursday morning Thailand time. New Zealand will release first-quarter GDP data, Australia will release May employment data and the euro zone will release May inflation. Germany will release May producer prices on Friday.

Stocks to watch: SCB Securities recommends stocks related to vaccines, reopening, commodities and electric vehicles. Its picks are BCH, PM, TPAC, WICE, SFT, CPW, TWPC, TMT, PTTEP, TVO, EA, GPSC, KCE and GULF.

UOB Kay Hian Securities recommends laggard stocks in telecommunication, REITs and electricity. Its picks are ADVANC, RATCH, EGCO, CPNREIT, BTS, BTSGIF and BEM. Other interesting themes are energy, petrochemicals, agriculture, insurance, steel, digital TV, logistics and shipping. Picks include PTT, PTTGC, IVL, IRPC, TVO, CPI, TU, CPF, THRE, TIP, TQM, TSTH, GJS, AMC, BEC, WORK, MONO, JKN, SONIC, NCL, TTA, PSL and RCL.

Technical view: UOB Kay Hian Securities sees support at 1,615 points and resistance at 1,680. Phillip Securities sees support at 1,600 and resistance at 1,660.

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