Set rides wave of ECB euphoria to 5.3% Gain

Set rides wave of ECB euphoria to 5.3% Gain

Recap: An aggressive stimulus move by the European Central Bank (ECB) stoked a global stock rally last week. The Thai market also tracked the euphoria.

Catch the wind: WEH listing is still in the pipeline.

The SET Index moved between 1,524.62 and 1,601.05 points. It closed at 1,598.33, gaining 5.3% from the previous week, on heavy turnover averaging 52.51 billion baht a day.

Foreign investors snapped their selling streak with net buys of 3.66 billion baht for the week. Institutional investors were net buyers of 8.33 billion baht and brokers bought 4.26 billion. Retail investors were net sellers of 16.25 billion baht.

Big movers: Top gainer DTCI soared 127% to 53 baht and top loser POLAR fell 29% to 0.71 baht. Tops in value were TRUE, up 4.9% to 12.80 baht; ITD, up 12% to 8.85 baht; and PTT, gaining 8.1% to 348 baht.

Newsmakers: The ECB announced a larger-than-expected bond-buying programme at 60 billion euros a month through September next year, for a total of 1.14 trillion euros. It also kept interest rates at record lows as the euro moved to an 11-year low against the US dollar.

Euro zone business activity picked up to a five-month high in January. The Markit Economics PMI for the 19-nation currency bloc rose to 52.2 points from 51.4 in December.

China's economy last year grew by 7.4%, its slowest pace in 24 years, official data showed, as property prices cooled and companies and local governments struggled under heavy debt burdens, keeping pressure on Beijing to take aggressive steps to avoid a sharper downturn.

The IMF sharply cut its 2015-16 world growth forecasts, saying lower oil prices would not offset pervasive weakness. It said poorer prospects in China, Russia, the euro area and Japan would trim world growth to 3.5% this year,from 3.8% forecast earlier, and 3.7% in 2016.

The Bank of Japan cut its inflation forecast and the governor conceded it might take longer than expected to hit 2% inflation, underlining the challenges of meeting the target as oil prices continue to slump.

The National Legislative Assembly voted 190-18 to impeach former prime minister Yingluck Shinawatra, resulting in her being banned from politics for five years. Former House speaker Somsak Kiatsuranon and ex-Senate speaker Nikhom Wiratpanich survived impeachment votes. The vote against Ms Yingluck came hours after the Office of the Attorney General said it would move to indict her on criminal charges in connection with her government's costly and corruption-riddled rice-pledging programme.

Prime Minister Prayut Chan-o-cha has ordered state agencies to remove all barriers to promoting tourism under the "2015 Discover Thainess" campaign. The government also plans to issue multiple-entry visas for foreign tourists, speed up visas for medical purposes and meetings, incentives, conventions and exhibitions (Mice), as well as issue a single visa for Cambodia, Laos, Myanmar and Vietnam in order to boost travel among Asean members.

Gen Prayut has asked state agencies to revise their annual spending plans in line with falling oil prices. Budget Bureau director Somsak Chotrattanasiri said the sharp fall in crude oil to about $50 a barrel was expected to cut construction costs of megaprojects by 5%. Out of state enterprises' investment budgets of 400 billion baht in fiscal 2015, about 150 billion worth of construction contracts have already been signed, leaving 250 billion pending consideration.

Despite continued uncertainty about the global economy, Standard Chartered Bank remains bullish on the Thai economy and is maintaining its 6% growth forecast for this year. It said expansion would be underpinned by public and private investment coupled with foreign direct investment (FDI) inflows from Japan aimed at consolidating production bases in the country.

MAI-listed Solution Corner (1998) Plc (SLC) runs the risk of violating a rule prohibiting the owner of a digital TV channel from holding more than 10% in another channel, says the National Broadcasting and Telecommunications Commission (NBTC). SLC recently bought 12.27% of SET-listed Nation Multimedia Group Plc (NMG), which owns Nation TV and Now TV, through its subsidiary NBC Next Vision Co. Through its subsidiary Spring News Corp, SLC owns the Spring News channel.

CK Power (CKP) has agreed to buy a 30% stake in Xayaburi Power (XPCL) from its parent firm, the contractor Ch. Karnchang (CK), and to participate in a rights offering of XPCL in order to maintain its shareholding in the Laotian power plant. The purchases are worth 5.51 billion baht in total.

Wind Energy Holding Co (WEH), Thailand's largest renewable energy company, said it would proceed with its plan to list on the SET. However, the company is looking to adjust its shareholding to clean up its murky image first. Company founder Nopporn Suppipat is currently on the run from authorities who are seeking him in connection with the multi-billion-baht bribery and extortion network allegedly headed by former Central Investigation Bureau chief Pongpat Chayapan.

Coming up this week: Thailand's manufacturing production index and utilisation rate for December will be released tomorrow. Due the same day are US durable goods orders and new home sales for December.

The Bank of Thailand's Monetary Policy Committee (MPC) will meet on Wednesday. A change in the benchmark interest rate of 2% is seen as unlikely despite calls for a reduction to stimulate the economy.

The US Federal Open Market Committee will meet tomorrow and Wednesday with a decision around 2am Thursday Thailand time.

US pending home sales and euro zone consumer confidence will be announced on Thursday.

Stocks to watch: Asia Plus recommends buying laggard stocks including SCC, KBANK, INTUCH and TTW. Bualuang Securities recommends KTB, ITD, MONO and TPCH and is overweight on TOP.

Technical view: Asia Plus sees support at 1,575 and resistance at 1,625. Finansia Syrus Securities pegs support at 1,580 and 1,573 with near-term resistance at 1,600 and 1,649.

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