Rate worries lead to worst week of the year on SET

Recap: Asian shares were mixed while European shares rebounded yesterday as investors digested policy tightening by major central banks.

The SET index moved in a range of 1,544.26 and 1,616.31 points this week before closing yesterday at 1,559.39, down 4.49% from the previous week to record its worst weekly performance of the year. Daily turnover averaged 80.92 billion baht.

Retail investors were net buyers of 17.2 billion baht and brokerage firms bought 872.3 million baht. Foreign investors were net sellers of 12.33 billion baht and institutional investors offloaded 5.75 billion baht worth of shares.

Newsmakers: More central banks around the world are unleashing a greater amount of policy firepower as they seek to combat unrelenting inflationary pressures.

• The US Federal Reserve on Wednesday announced the most aggressive interest rate increase in 28 years, raising the benchmark borrowing rate by 0.75 percentage points as it battles against surging inflation.
• Natural gas prices in Europe jumped after Russia stepped up an energy war by cutting supplies through the largest link to the continent to less than half of its usual volume.
• The World Trade Organization concluded a landmark bundle of deals on Friday covering fishing subsidies, food insecurity and Covid-19 vaccines following hectic round-the-clock talks.
• Oil prices headed for their first weekly decline since April amid choppy trading as investors assessed further inflation-fighting moves by central banks.
• Gold prices slipped below $1,850 an ounce and were on track for a 1% weekly decline, dented by a stronger dollar and hawkish policy signals from central banks even as recessionary fears loom.
• Long bonds in Southeast Asia are set to outperform shorter-dated notes as policymakers turn more hawkish, turning the curve-flattening trade into a hot bet, analysts say.
• Further waves of reckoning are sweeping through the cryptocurrency industry, with the giant exchange operator Coinbase Global saying it would cut almost a fifth of its staff and the crypto lender Celsius Network examining restructuring options.
• Bitcoin shed another 7% to $20,969.32 on Thursday and is now down 56.5% from this year's high of $48,234 on March 28.
• Businesses' and consumers' annual global spending related to the metaverse could reach $5 trillion by 2030, according to a new report from the consulting firm McKinsey & Co.
• YouTube on Wednesday said that more than 1.5 billion people monthly tune into its Shorts video service, which competes with global sensation TikTok.
• Tesla founder Elon Musk met with Twitter staff and pitched a vision of a billion-user platform, but was hazy on potential layoffs, free speech limits and what's next in his chaotic buyout bid.
• The Bank of Thailand said on Wednesday it was closely monitoring capital movements and the baht, now trading at a 6-year low against the US dollar, and was ready to take action to curb any excessive volatility.
• Research houses are unanimous in predicting the BoT will raise interest rates, possibly as soon as its next meeting, but businesses are pushing for an easy, gradual approach.
• Government leaders are publicly making a case for keeping interest rates lower for longer, a call that is putting them at odds with the BoT, which believes it needs to act soon to keep inflation from overheating.
• The University of the Thai Chamber of Commerce downgraded its economic growth forecast to 3.1%, from the 4.2% projection it made in November 2021, largely due to rising energy prices.
• The weaker baht is expected to boost the Thai economy and increase real GDP by 0.4%, but not all manufacturers will reap the benefits, says the Industry Ministry.
• The government has pledged to extend until the end of September 10 existing measures devised to alleviate the hardship of low-income earners from a surge in oil prices.
• The Energy Ministry will aim to cap the retail price of diesel at 35 baht per litre -- 10 baht below the real market price -- until the end of this month as it waits for new price subsidy measures.
• The government wants to skim off some of the profits from oil refiners to help support the Oil Fuel Fund as it continues to subsidise fuel prices despite having slipped 85 billion baht into the red.
• The Finance Ministry plans to seek cabinet approval for a long-threatened financial transaction tax on individual stock investors soon.
• Tourism will be the key engine supporting Thailand's economic recovery, replacing the slowing export sector, says the Economic Intelligence Center of Siam Commercial Bank.
• The Tourism Authority of Thailand will propose visa fee exemption for international arrivals and an eligibility extension to 45 days from 30 for visitors from nations not requiring a visa to enter the country.
• The Commerce Ministry and food exporters brushed aside reports that Walmart, the largest US retailer, had dropped a Thai coconut milk brand amid allegations of forced monkey labour by animal-rights activists.
• Thai sugar cane output in the 2022-23 crop year is expected to increase by 15% to 106 million tonnes, leading to higher sugar exports, though the impact of Russia-Ukraine war continues to worry farmers.
• The Eastern Economic Corridor Office hopes to pursue a public-private partnership deal for seawater desalination projects at Map Ta Phut and Pattaya worth a combined 7.7 billion baht to ensure sufficient water supply in the area.
• Mobile market leader Advanced Info Service is teaming up with the Digital Economy Promotion Agency to launch the country's first 5G innovation centre at Thailand Digital Valley in the EEC.
• The State Railway of Thailand (SRT) is in talks with 10 logistics companies that have expressed an interest in making a complete switch to rail freight services and expects to help them complete the transition before the end of this year.
• Regulations aimed at relaxing enforcement of the penalties under the Personal Data Protection Act (PDPA) are expected to come into force next week.
• Channel 3 operator BEC World Plc has allocated 400 million baht to BEC Studios in the first phase of a strategic plan to produce content for export globally.
• The e-marketplace Shopee is laying off staff across Asean, including Thailand, according to industry sources, as it has become more cautious about spending and more focused on attaining profitability rather than burning cash.
• Mazda Sales (Thailand) Co studying a plan to launch both plug-in hybrid and hybrid electric vehicles in Thailand.
• The crypto platform Huobi Thailand Co will halt all operations on July 1 after the SEC revoked its licence for lack of compliance with regulations.

Coming up: The People's Bank of China will announce the prime lending rate on Monday. Canada will release April retail sales and the US will release May existing home sales on Tuesday.

• Britain and Canada will release May consumer prices on Wednesday. Germany will release June manufacturing PMI on Thursday. On Friday, Britain will release May retail sales, Germany will release the June business climate index and the US will release May new home sales.

Stocks to watch: KTB Securities believes tourism-related stocks will rally if the canncellation of the much-derided Thailand Pass goes ahead as planned on July 1, and if more stimulus measures are offered. It recommends investing in AOT and CENTEL as tourism plays. Other stocks with good prospects include BLA, ASIAN, EA, BEM and BGRIM.

• Asia Wealth Securities recommends investing 40% of one's portfolio in defensive stocks, including power plants with laggard prices, among them RATCH, EGCO, GPSC and BGRIM. Among hospital stocks, the brokerage chooses BH and BDMS. Stocks that benefit from higher interest rates are BLA, THREL and TIPH. AOT, BAFS, BEM, PTG and SUSCO will benefit from further economic reopening. For food and beverages businesses, the brokerage picks TU, CPF, GFPT, TFG and ASIAN.

Technical view: Thanachart Securities sees support at 1,534 points and resistance at 1,576. Capital Nomura Securities sees support at 1,536 and resistance at 1,580.