Asian markets jump as US inflation cools

RECAP: Asian stocks rose for a fifth straight day on Friday, on course for their best week this year, as cooling US inflation stoked speculation that the Federal Reserve could pause interest-rate increases after this month.

Thai shares staged a rally on global factors despite continuing political uncertainty locally. The SET Index move in a range of 1,482.21 and 1,519.08 points this week before closing yesterday at 1,517.92, up 1.84% from the previous week, in daily turnover averaging 41.95 billion baht.

Institutions were net buyers of 2.91 billion baht, while foreign investors were net sellers of 2.17 billion, followed by brokers at 376.04 million and retail investors at 368 million baht.

NEWSMAKERS: US inflation cooled for a 12th straight month in June as flat grocery prices partly offset a rebound in gasoline costs and rents. Consumer prices overall increased 3% from a year earlier, down from 4% in May.

• Chinese exports fell for a second straight month in June, underscoring weak external demand and slowing domestic growth amid high interest rates. The value of outbound shipments slumped 12.4% from a year earlier to $285.3 billion.
• The Chinese producer price index fell for a ninth consecutive month, down 5.4% from a year earlier, marking the steepest decline since December 2015. Consumer inflation, meanwhile, was at its lowest since 2021.
• Vehicle sales in China grew 9.8% to 13.24 million in the first half of 2023, partly driven by a low base in the same period last year.
• The Uniqlo owner Fast Retailing reported a net profit of 238.5 billion yen ($1.7 billion) for the nine months through May, beating the previous year's record of 237.8 billion yen for the period.
• Japan's Sumitomo Mitsui Financial Group has launched a new digital-only banking service in the US, as it seeks a piece of the fast-growing but fiercely competitive North American consumer finance market.
• The number of corporate bankruptcies in Japan for the first six months of 2023 rose 32.1% from a year earlier to a five-year high of 4,042, as businesses took on increased debt to stay afloat amid the coronavirus pandemic.
• The Taiwanese electronics manufacturer Foxconn has pulled out of a $19.5-billion joint venture with the Indian mining conglomerate Vedanta Group to produce semiconductors locally, dealing a blow to New Delhi's efforts to make India a chipmaking hub.
• LG Electronics targets revenue of 20 trillion won ($15.6 billion) for its automotive components segment in 2030, more than doubling last year's sales, the South Korean company said on Wednesday.
• Meta Platforms' Twitter rival Threads crossed 100 million sign-ups within five days of launch, dethroning ChatGPT as the fastest-growing online platform to hit the milestone.
• The Singapore state-owned investor Temasek on Tuesday reported a $6-billion net loss for the year through March, as it warned global economic and geopolitical headwinds are weighing on investment activities.
• Thailand's parliament will attempt again to elect a prime minister on July 19, after Move Forward Party leader Pita Limjaroenrat's first attempt fell 51 votes short of a majority on Thursday. A third vote is possible on July 20.
• Even if he does succeed in becoming premier, Mr Pita now faces two cases before the Constitutional Court: one involving media share ownership, and a second complaint lodged by an activist lawyer about his party's plans to amend the lese-majeste law.
• If a prolonged delay in forming a government leads to protests and they turn violent, the country could stand to lose about 500 billion baht in tourism revenue, or a one-percentage-point decline in GDP, says the University of the Thai Chamber of Commerce.
• Thai rice exports this year could rise as much as 17%, to 9 million tonnes, because of a surge in demand driven by concerns over the potential impact of the El Niño weather phenomenon. Importers worldwide are building up stockpiles on fears that drought will reduce harvests.
• The SET has cautioned investors to carefully study information about Nusasiri Plc (NUSA) after its auditor raised an issue about the complexity of the deal structure for a hotel the property developer intends to buy, as well as its business licence in Germany.
• Consumer confidence rose for a 13th straight month in June, reaching a 40-month high, driven by a resilient tourism sector and increasing agricultural product prices.
• The Bank of Thailand warns that online financial fraud is increasing as criminals use false base stations to send messages to consumers to convince them to install malware-embedded apps on their phones.
• Bitkub Capital Group, the parent of Thailand's largest digital asset exchange Bitkub Online, said it had laid off 5.5% of its personnel and curbed employee benefits contain costs amid economic headwinds.
• Central Pattana Plc, Central Retail Corp Plc and Centara Hotels and Resorts have joined forces with J Front Retailing, a leading retailer in Japan.
• The national artificial intelligence (AI) committee will ask the new government to allocate a budget of 1 billion baht to accelerate the creation of 30,000 AI jobs over three years.
• SET-listed Banpu Power (BPP), the power generation arm of the energy conglomerate Banpu Plc, has completed a 16-billion-baht buyout of Temple II gas-fired power plant in Texas to strengthen its power business in the US.
• SET-listed BCPG, the power generation arm of the energy conglomerate Bangchak Corp, has completed the purchase of two more gas-fired power plants in Pennsylvania for 8.9 billion baht as it continues to increase generation capacity in the US.
• The Thai Hire-Purchase Association has asked the Office of the Consumer Protection Board to approve a higher maximum interest rate for hire-purchase loans as the business is being affected by rising rates.
• PTT Plc is stepping up efforts to use more renewable power and further develop its hydrogen fuel business, part of a move to grow the company in a sustainable manner.
• Applications for investment promotion in the first half of this year soared by 70% year-on-year to 364 billion baht in value, led by a 141% jump in foreign-funded projects, said the Board of Investment.
• The Social Security Fund declined last year by 17.6 billion baht, the first drop in five years, as a result of decreased market capitalisation and reduced contributions to alleviate the financial burden of subscribers during the pandemic.

COMING UP: China will report Q2 GDP and June industrial production on Monday, Due Tuesday are US retail sales, housing and business inventory updates. The EU will release June inflation on Wednesday, and China will update lending rates on Thursday. Locally, banks will continue to report their Q2 earnings next week.

STOCKS TO WATCH: DAOL Securities expects the Fed will reach its limit on interest rates, and that China is primed for economic stimulus. Local stocks that would benefit are PTTEP, IVL, HANA and PSL.

• Finansia Syrus Securities recommends selective investment in firms expected to report strong Q2 earnings, such as CPALL, CPN, MINT, NSL and TOA.
• Krungsri Capital Securities believes the Pheu Thai Party has a better opportunity to lead the government than Move Forward. Stocks that have declined on concerns about impact from a Move Forward administration are worth looking at. Among them, GULF, CRC, CPALL, BJC, CPAXT, PTTGC, TRUE and THCOM. Stocks linked to Pheu Thai are SIRI, SC, ADVANC, THCOM and INTUCH. But if street rallies and violence occur, avoid tourism and hotel stocks.

TECHNICAL VIEW: Krungsri Capital Securities sees support at 1,480 points and resistance at 1,550. InnovestX sees support at 1,465 and resistance at 1,534.