Host of worries add up to rocky start to Q4

Recap: Global stocks began the fourth quarter on the back foot yesterday as fears are mounting about high inflation, slowing growth, rising interest rates, a global energy crunch that is causing prices to soar, and regulatory risk in China.

The SET index moved in a range of 1,593.32 and 1,639.97 points this week before closing yesterday at 1,605.17, down 1.59% from the previous week, in daily turnover averaging 98.84 billion baht.

Retail investors were net buyers of 6.11 billion baht. Foreign investors bought 2 billion baht and brokerage firms purchased 1.33 billion baht worth of shares. Institutional investors sold 9.45 billion baht worth of shares.

Newsmakers: A vote on a $1.2-trillion US infrastructure bill remains stalled amid infighting among members of President Biden's own Democratic Party. Progressive Democrats say they will oppose the infrastructure bill unless party moderates commit to an even broader $3.5-trillion social spending package.

• The Biden administration is taking aim at so-called stablecoins as it begins to lay the ground for stricter regulation of cryptocurrencies that could shape the future of digital money.
• US and EU officials on Wednesday pledged to join forces to deal with a host of technology and trade issues to secure semiconductor supplies and counter China's dominance.
• The US car manufacturer Ford says it plans to invest $11.4 billion in electric vehicle production, building four new plants that will create 11,000 new jobs by 2025.
• A long-planned round of Australia-EU free trade talks has been postponed, a European official confirmed yesterday, amid fury in Paris over Canberra's decision to cancel a major French submarine contract in favour of an offer for help from Washington acquiring nuclear-powered subs.
• Malaysia's AirAsia X on Monday posted a record quarterly loss of $5.9 billion, eight times more than a year ago, as a multi-billion-dollar provision to cover debts drove operating costs higher.
• Hong Kong is experiencing an explosion in investment scams, with the number of cases more than tripling in the first seven months of 2021, and the amount of money stolen increasing nearly 20-fold, according to police statistics.
• Myanmar's currency has lost more than 60% of its value since the beginning of September, driving up food and fuel prices in an economy that has tanked since the military coup eight months ago.
• The Finance Ministry might pump fresh money into the economy in the fourth quarter and extend stimulus measures in an effort to revive the nation, says minister Arkhom Termpittayapaisith.
• The cabinet on Tuesday approved a public debt management plan that includes new borrowing of 1.34 trillion baht for fiscal 2022, which started yesterday.
• The Bank of Thailand believes the economy bottomed out in the third quarter and should gradually pick up from the fourth quarter as the Covid outbreak eases, allowing the government to loosen restrictions to boost local demand and tourism. The central bank held its key interest rate unchanged at 0.5% on Wednesday.
• The World Bank has downgraded its economic growth forecast for Thailand this year to 1% from its earlier forecast of 2.2%.
• Headline inflation in August contracted 0.02% year-on-year, the first drop in five months, reflecting a decline of fresh food prices and the boost from state stimulus measures to ease the cost of living during the pandemic.
• The government plans to introduce more measures to help small and medium enterprises (SMEs) retain workers and create new jobs, with 46.9 billion baht to be allocated.
• The Covid outbreak caused the manufacturing production index (MPI) to dip by 4.15% year-on-year to 87.71 points in August, but the index kept growing during the first eight months of this year, the Office of Industrial Economics (OIE) reported.
• The Eastern Economic Corridor Office and the Japan External Trade Organization (Jetro) have pledged to work together to encourage Japanese firms and other companies located in the EEC to tap more into digital manufacturing platforms to reduce production costs.
• The travel industry appears resigned to writing off another high season, with the tourism confidence index at an all-time low, despite reopening plans and domestic stimulus campaigns.
• Thailand is looking to Indian tourists for holiday season revenue in the absence of mass-market holidaymakers from countries such as China.
• The Special Tourist Visa long-stay programme to be extended until Sept 30 next year to attract wealthy foreigners.
• Phuket expects to generate tens of billions of baht from 1 million foreign arrivals over the next six months, tourism authorities announced as they outlined their reopening timetable.
• The Covid task force has approved the reopening of more businesses, a shorter curfew and quarantine periods and expanded pilot reopening areas, but the state of emergency will remain until the end of November.
• The Tourism Authority of Thailand (TAT) has floated the idea of launching its own crypto token -- the TAT Coin -- to capitalise on a growing market of holders of cryptocurrencies, but first needs to consider regulations and viability.
• Thai Airways International (THAI) has announced it will start selling tickets on select international flights to destinations with high vaccination rates, from Oct 1.
• Having contracted over the past two years, Thailand's overall food exports are forecast to grow by 3-5% this year, boosted by the recovering economies of Thailand's key trading partners, baht weakness and progress in vaccine production and inoculations.
• Thailand is on track to export 6 million tonnes of rice this year -- still well below the 10 million tonnes or more that it once shipped abroad when it led world producers -- due to an anticipated uptick in demand, the Thai Rice Exporters Association said yesterday.
• The Ministry of Transport aims to open a national shipping line by next June, in a bid to reduce reliance on foreign ships and promote the export and import sector.
• The cabinet has approved a new excise tax structure for cigarettes, effective from Oct 1, according to a Finance Ministry source.
• The Tobacco Authority of Thailand (ToAT) plans to set up a subsidiary to move into the hemp business, with the aim of increasing tobacco farmers' income by three to four times the present level, said governor Phanupol Rattanakanjanapatra.
• The Bank for Agriculture and Agricultural Cooperatives has started offering loans to plant cannabis for community enterprises and agricultural cooperatives.
• A 3-5% rise in smartphone prices is likely in the second half this year because of the baht's depreciation and a supply shortage, industry executives say.
• The SET-listed developer Sansiri Plc will spend 500 million baht to install 1,500 electric vehicle (EV) wall chargers at new housing units being launched in 2021-22 to capitalise on rising EV sales.
• T&B Media Global (Thailand) plans to invest 10 billion baht to launch the Translucia metaverse, the first virtual world in Thailand, with the property developer Magnolia Quality Development Corp.

Coming up: Canada will release August building permits on Monday and the US will release August factory orders. On Tuesday Australia will release August trade figures and the central bank will announce its latest policy decision. The US will release August trade figures and September non-manufacturing, services and composite PMI.

• New Zealand's central bank will announce its policy decision on Wednesday. Due the same day are August retail sales in the euro zone and US non-farm employment in September. Germany will release August industrial production data on Thursday.
• China will release the September services PMI on Friday. The US will release September data on hourly average earnings, non-farm payrolls and unemployment. Canada will also release September employment data.

Stocks to watch: Trinity Securities recommends retail stocks that will benefit from government relief packages to boost local consumption. Its picks are CPALL, COM7, MAKRO, HMPRO, GLOBAL and DOHOME. Electricity stocks that will gain from a pickup in economic activity include GULF, GPSC and BGRIM. Petroleum station stocks are also set to benefit from the uptick in travel. Top picks are OR and PTG.

• Tisco Securities recommends laggard stocks with prospects for reporting good third-quarter performance, including BBL, JWD, MTC, SFLEX, SMPC, SPALI, SPRC and TWPC.

Technical view: Tisco Securities sees support at 1,590 points and resistance at 1,660. Trinity Securities sees support at 1,550 and resistance at 1,650.