Investors spooked by Covid news flee risky assets

Investors spooked by Covid news flee risky assets

Recap: Global markets, from stocks to commodities, tumbled yesterday as news of a possibly vaccine-resistant Covid variant propelled investors to seek refuge in safe-haven assets including gold.

The SET index moved in a range of 1,608.55 and 1,658.6 points this week but sank 37.85 points yesterday to finish the week at 1,610.61, down 2.09% from the previous week, in daily turnover averaging 93.57 billion baht.

Retail investors were net buyers of 12.24 billion baht, institutional investors sold 5.98 billion and brokerage firms sold 3.21 billion baht. Foreign investors offloaded 3.05 billion baht worth of shares.

Newsmakers: President Joe Biden approved the release of up to 50 million barrels from the US strategic oil reserve on Tuesday in an attempt to flatten fuel price rises -- and possibly reverse his sagging political fortunes.

  • Oil prices extended their declines yesterday on concerns that a global supply surplus could swell in the first quarter following the coordinated release of crude reserves by major consumers including the US, China, India and Japan.
  • US pressure on Opec and its allies to pump more oil and cool red-hot crude prices has shone a spotlight on a relatively new problem for the producer group: it doesn't have much extra capacity to hike output faster, even if it wanted to.
  • President Biden on Monday tapped Jerome Powell to serve a second term as chairman of the US Federal Reserve, allowing him to keep leading the response to the economic damage caused by Covid-19 while dealing with a wave of record inflation.
  • Chinese regulators have asked executives of the ride hailing giant Didi Global to devise a plan to delist from US stock markets, just months after its debut, on security fears about leakage of sensitive data, Bloomberg has reported.
  • A patch of virtual real estate in the online world Decentraland sold for a record US$2.4 million worth of cryptocurrency, the buyer crypto investor and Decentraland said.
  • Samsung said on Tuesday it will build a microchip factory in Texas, a $17-billion investment that comes as semiconductor shortages are causing supply chain delays across many industries.
  • The Philippines, one of the world's biggest importers of rice, is taking steps to temporarily limit imports of the grain from Vietnam amid a big harvest at home.
  • China took note of an expression of "regret" by JP Morgan CEO Jamie Dimon for joking that his bank would outlast the Communist Party, and said it hoped the media would stop "hyping" the issue.
  • Australia has outlined a plan to spur investment in new gas pipelines to beef up supply, despite the government's pledge to achieve net zero carbon emissions by 2050.
  • Thailand's GDP is expected to grow by 1.2% by the end of this year after the country reopened to foreign visitors this month, Finance Minister Arkhom Termpittayapaisith said.
  • Bank of Thailand officials believe the economy bottomed out in the third quarter and will grow close to forecasts, but recovery will remain fragile and is subject to uncertainty, according to minutes of the central bank's last policy meeting.
  • The Finance Ministry and the Bank of Thailand have both made clear that they will not use drastic fiscal and monetary measures in mitigating the impact of the prolonged pandemic as such extreme measures might affect economic stability.
  • Thailand aims to join talks on membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), despite opposition from some politicians and business groups over fears the pact could harm farm and healthcare businesses.
  • Thai exports rose 17.4% year-on-year in October, prompting the Commerce Ministry to say that 15-16% full-year growth is possible, much higher than the 4% target set earlier.
  • Amid talk of an early election, the government plans to dole out 155 billion baht in cash to millions of farmers reeling from Covid, floods, droughts and poor crop prices.
  • The Industry Ministry aims to boost Thailand's post-pandemic GDP with bio-, circular and green (BCG) economic development and turn the country into an Asean bio-hub by 2027.
  • Thailand's labour market has been severely affected by months of strict Covid curbs, with the official unemployment rate jumping to 2.25% in the third quarter from 1.9% in the previous three months, while household debt continued to grow.
  • The cabinet on Tuesday approved a soft loan package worth 5 billion baht to help create jobs, mainly for the unemployed.
  • The price of diesel will fall below 28 baht per litre after energy officials decided to reduce the proportion of palm oil-derived methyl ester to 7% and postponed the introduction of 10% and 20% methyl ester blended diesel from next month to March 2022.
  • Power bills are set to increase by 4.6% from January to April to an average of 3.78 baht per kilowatt hour (unit) as the country needs to import costly liquefied natural gas (LNG) for electricity generation, says the Energy Regulatory Commission.
  • A fund will be set up to subsidise electric vehicle prices so that they are closer to the cost of internal combustion engine cars and promote EV adoption, according to Finance Minister Arkhom Termpittayapaisith.
  • Thailand welcomed 20,272 foreign tourists in October, up from 1,201 in the same period a year earlier, government data showed, thanks to good early response to the Phuket Sandbox programme.
  • A new tourism ecosystem targeting global cryptocurrency holders could provide a huge boost to national GDP if the Tourism Authority of Thailand (TAT) shifts away from traditional marketing, says Jirayut Srupsrisopa, founder of the local crypto exchange Bitkub.
  • The new digital business giant that will be formed through the merger of True Corp and Total Access Communication (DTAC) will have a 33.1% stake equally held by Charoen Pokphand (CP) Group and Norway's Telenor.
  • Asset World Corp Plc plans to allocate 3.43 billion baht to develop an integrated wellness project comprising luxury hotels and residences, scheduled to open in 2026.
  • SET-listed Thonburi Healthcare Group (THG) is planning to venture into Hemp Smart City development as part of its wellness and medical tourism project in the resort district of Cha-am in Phetchaburi.
  • Honda Automobile (Thailand) is considering building an electric vehicle (EV) battery factory in Thailand to serve the country's fledging EV industry.
  • A joint venture led by Gulf Energy Development Plc is preparing to develop the third-phase Laem Chabang deep-sea port into a gateway of trade and investment in the Eastern Economic Corridor (EEC) area.

Coming up: Australia will release third-quarter company gross operating profits on Monday. Canada will release third-quarter current account data and the US will release October pending home sales.

  • China will release November composite and manufacturing PMI on Tuesday. Germany will release November unemployment, Canada will release third-quarter GDP and the US will release November consumer confidence. Australia will release third-quarter GDP on Wednesday, and the US will release November nonfarm employment change and manufacturing PMI.
  • Japan, Germany the euro zone and Britain will release November services PMI on Friday. The US will release November nonfarm payrolls and unemployment.

Stocks to watch: Asia Plus Securities recommends stocks expected to benefit from the upcoming Motor Show events, as well as banking stocks that will gain from an increase in hire-purchase loans such as TISCO, SCB, KBANK, KKP, BAY and MTC. Interesting automotive and other related stocks include MTC, SAT, STANLY, AH, EA, GPI and MVP.

  • Capital Nomura Securities recommends hospital stocks for the short term due to the emergence of a new Covid variant. Top picks from the group are BCH and CHG. Other stocks that may benefit from a pandemic flare-up are STGT and XO. Among export-oriented stocks, it suggests KCE.

Technical view: Maybank Kim Eng Securities sees support at 1,600 points and resistance at 1,630. Capital Nomura sees support at 1,570 and resistance at 1,630.

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