Recovery outlook lifts most bourses but SET falters

Recovery outlook lifts most bourses but SET falters

Recap: Global shares were mixed while European and US markets were steady yesterday as investors weighed the outlook for economic recovery, while US banks rose after passing stress tests. For the week, global shares are poised for their biggest advance since April, with the MSCI World index up 2%.

The SET index moved in a range of 1,569.93 and 1,613.66 points this week before closing yesterday at 1,582.67, down 1.88% from the previous week, in daily turnover averaging 79.97 billion baht.

Retail investors were net buyers of 8.11 billion baht and brokerage firms bought 1.86 billion baht. Institutional investors were net sellers of 5.44 billion while foreign investors offloaded 4.52 billion baht worth of shares.

Newsmakers: Microsoft Corp has taken its place alongside Apple as just the second US public company to reach a $2-trillion market value, buoyed by its dominance in cloud computing and enterprise software.

  • A US House of Representatives committee has approved five antitrust bills, three of them aimed at Big Tech. The most aggressive proposed legislation could require platforms to sell off some business lines.
  • The US economy remains on a positive trajectory even as it contends with higher inflation, according to congressional testimony by Federal Reserve Chair Jerome Powell. Two other two Fed officials have warned that inflation could rise more than policymakers' expectation in the near term.
  • A deal reached on Thursday between President Joe Biden and senators for $579 billion in new spending to repair roads, railways and bridges does relatively little to fight climate change, an issue the president has called an "existential threat".
  • China will create millionaires at a quicker pace than the United States in the five years through 2025, as a rapid recovery from the world's worst public-health crisis in a century helps corporate chieftains generate and accumulate wealth faster, according to the 12th Global Wealth Report by Credit Suisse.
  • State-run Commercial Aircraft Corporation of China (Comac) expects to obtain airworthiness certification from Chinese air traffic regulators this year for its 168-seat, narrow-bodied C919 airplane, a potential rival to the Airbus A320 and Boeing B737.
  • The Boeing 737 Max 10, the largest member of the US platemaker's best-selling single-aisle airplane family, has made its maiden flight, in a further step towards recovering from the safety grounding of a smaller model.
  • Gold prices remained well below $1,800 but were poised for their first weekly gain in four weeks, propped up by a subdued dollar as investors awaited a clearer view of US inflation prospects.
  • Oil prices headed for a fifth weekly advance amid shrinking stockpiles. The market is now worried about the inflationary impact of more costly oil if Opec and its allies do not restore more production soon enough.
  • The global chip shortage is pushing up prices of items such as laptops and printers and is threatening to do the same to other top-selling devices including smartphones.
  • Bitcoin plunged below $30,000 for the first time since January after China broadened a crackdown on its massive energy-hungry cryptocurrency mining industry with a ban on mines in a key southwestern province.
  • The Bank of Thailand left its key interest rate unchanged this week at a record low 0.5% and cut its 2021 economic growth forecast from 3.0% to 1.8%, reflecting the impact of the third Covid wave.
  • The baht slid to its lowest point in more than a year on Wednesday, around 31.8 to the US dollar, after the central bank slashed its growth forecast.
  • Fitch Ratings has affirmed Thailand's long-term foreign-currency issuer default rating (IDR) at BBB+ with a stable outlook.
  • The cabinet formally approved the Phuket sandbox tourism scheme, with the island set to reopen on July 1, followed by Koh Samui, Koh Phangan and Koh Tao on July 15.
  • The Phuket reopening is expected to draw 600,000 foreign and local tourists to the resort island and generate cash flow of about 15 billion baht in the next three months, tourism authorities say.
  • The Sandbox still has inconvenient regulations to fix, including duplicate tracking apps and other confusing rules. In any case, key short-haul markets are likely to be absent in the early months of the scheme.
  • The Tourism Authority of Thailand (TAT) aims to offer city bubble and activity-based travel agreements in sandbox areas to ease quarantine requirements in Thailand and the visitor's home country.
  • The plan to reopen the country comes with conditions, with a major requirement that only provinces that have vaccinated 70% of their population will be allowed to open completely.
  • The Finance Ministry has asked state-run banks to consider lowering interest rates to zero until the end of this year as part of government efforts to curb household debt.
  • Ceiling interest rates of consumer loan products, currently over 20% per year, are expected to be reduced by at least 1-2 percentage points.
  • Exports in May surged 41.6% from the low base of a year earlier, but still well above forecasts for 30% growth. Commerce Minister Jurin Laksanawisit said the momentum was expected to continue.
  • The Export-Import Bank of Thailand (Exim Bank) has set a target to increase the number of small and medium-sized enterprise (SME) exporters to 100,000 in next four years from around 30,000 at present, said the president Rak Vorrakitpokatorn.
  • The cabinet cancelled privileges granted decades ago to Thai Airways giving it the right to operate duty-free shops at Don Mueang airport without winning a formal bid, as it is no longer a state enterprise.
  • Property developer Magnolia Quality Development Corp (MQDC) says it registered 7 billion baht in sales at The Forestias, a major development own Bang Na-Trat Road, in just the last three months.
  • Thailand ranked last among eight Asia-Pacific economies for 5G download speeds in a survey by the mobile analytics company Opensignal. South Korea topped the list with 5G download speeds of 380.5 Mbps.
  • Individual taxpayers have until Wednesday to file their returns. The Revenue Department says it's still waiting to hear from about 1 million of the 10.6 million taxpayers expected to file.
  • A total of 78 candidates have applied for seven positions on the National Broadcasting and Telecommunications Commission (NBTC) board. It is the third attempt to fill the seats in a process that has dragged on for four years.

Coming up: Thailand will release May industrial production on Monday and the Bank of Japan will release a summary of opinions. On Tuesday, Japan will release May jobs and retail sales, Germans will release June inflation and the US will release June consumer confidence.

Thailand will release May trade, current account, consumption and investment data on Wednesday, the US will release May pending home sales, and Japan will release May industrial production. The same day, China will release June purchasing managers index (PMI) data, Germany will release June unemployment and May import prices, and the euro zone will release June inflation data.

 

Japan will release the second-quarter tankan large manufacturing industry outlook on Thursday, and China, Germany and eurozone will release June manufacturing data. Germany will release May retail sales on Friday, and the US will release June nonfarm payrolls and unemployment data.

Stocks to watch: Capital Nomura Securities says the agricultural and food sector benefits from the weakening baht. With every 1 baht of depreciation against the dollar, TU, CPF, ASIAN, NER, XO and SAPPE will add 1-3% in net profits. SVI, HANA, KCE and AMATA will add 2-3% while EPG will add 3%. However, the weak baht will negatively affect airlines and power producers.

SCB Securities recommends defensive and high dividend yield stocks, semiconductor and healthcare businesses and firms that benefit from economic reopening. Its picks are GPSC, BGRIM, KCE, HANA, BDMS, RJH, CPN, CRC, BEM and ZEN. Mid- to small-cap recommendations include CPW, PM, SFT, TPAC and WICE.

Technical view: Maybank Kim Eng Securities sees support at 1,550 points and resistance at 1,610. Asia Plus Securities sees support at 1,550 and resistance at 1,610.

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