Stocks rally on FED signal but SET fails to respond

Stocks rally on FED signal but SET fails to respond

Recap: Global stock markets rallied strongly and foreign fund flows returned to risky asset classes including equities after the US Federal Reserve signalled that it would not start raising its interest rates until later this year, easing concerns of an increase as soon as June.

The SET Index moved sideways in a range of 1,511.40 and 1,544.69 points and closed at 1,541.55, down 0.75% from previous week, on daily turnover averaging 42.78 billion baht.

Foreign investors were net buyers of 2.07 billion baht, followed by brokers at 970.18 million and retail investors at 104.98 million. Institutional investors were net sellers of 3.14 billion baht

Big movers: Top loser AJD fell 39.6% to 1.22 baht and top gainer TSI rose 138% to 16.90 baht. JAS led in volume and value, down 17.4% to close at 5.95 baht. Tops in value were TRUE, losing 3% to 12.90 baht; ADVANC, up 3.3% to 249 baht; and IFEC, down 9.1% to 14 baht. There were no new listings last week.

Newsmakers: Japan's central bank said tumbling world energy prices could push inflation to zero, which could frustrate attempts to spur the sluggish economy.

Foreign direct investment (FDI) in China grew at its weakest pace in six months in February. February FDI rose just 0.9% from a year earlier, slowing sharply from 29.4% in January, adding to mostly weak February data, which has raised expectations of further moves by Beijing to spur growth.

Major Asean economies drew more FDI combined than China for the second straight year in 2014. FDI into Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam rose to a record US$128 billion, according to Thomson Reuters show, against $119.56 billion for China. FDI to the Philippines grew the fastest, at 66%, but inflows to Thailand fell.

The Energy Regulatory Commission (ERC) wants some power producers to postpone commercial operations until 2022, as power demand is growth slowing. Producers with plants due to begin operating between 2017 and 2021 include Egat, Gulf Power and National Power Supply Co.

merger between the Thailand Futures Exchange (TFEX) and the Agricultural Futures Exchange of Thailand (AFET) will be completed in July, with trading expected to start by September.

The gloomy economy and high household debt are obstacles to Thai banks maintaining profitability and controlling bad loans, but Fitch Ratings says the outlook remains stable because of strong capital and reserve buffers.

The US Federal Reserve trimmed its GDP growth forecast to a range of 2.3% to 2.7, from 2.6% to 3% earlier, adding weight to the belief that an interest rate increase is not imminent.

The Supreme Court's Criminal Division for Political Office Holders has accepted the case filed against former prime minister Yingluck Shinawatra for failing to stop corruption of the rice pledging scheme. The first hearing will be on May 19.

The 385 listed firms on the Stock Exchange of Thailand (SET) and Market for Alternative Investment paid out a total of 358 billion baht in dividends in 2014, representing a 54% dividend payout ratio. The payout was 10 billion baht higher than in 2013. The top five sectors were ICT, banking, food and beverages, property development and electronic components.

The Bank of Thailand on Friday lowered its 2015 economic growth forecast to 3.8% from 4%, citing possible delays in government spending, weakening consumer and investor confidence, and the slower-than-expected global recovery. The National Economic and Social Development Board expects 2015 GDP growth between 3.5% and 4.5%, driven by exports, private sector investment and tourism.

The government said Thailand's 4G licence auction should take place in August, but the National Broadcasting and Telecommunications Commission (NBTC) says it won't be ready until November due to martial law restrictions. The NBTC also said the 2,600-MHz spectrum proposed for the auction is not practical for 4G wireless broadband.

Kasikornbank has teamed up with Wing Cambodia Limited Specialised Bank to offer mobile banking services in Cambodia.

Many banks cut minimum lending and deposit rates in response to the March 11 central bank rate cut. The Government Savings Bank cut its MLR by 12.5 basis points and deposit rates by 5-35 points. The SME Bank trimmed its MLR by 25 basis points. KBANK cut its MLR by 10 basis points, from 6.75% to 6.65%, and fixed deposit rates by 10-30 bps to a range of 0.37% to 3.3%. KTB cut its MLR by 12.5 points to 6.625% and fixed deposit rates by 10 to 12.5 points, to a range of 0.375% to 3.325%.

Coming up this week: The Commerce Ministry will release February trade data and the US will release housing sales figures today.

HSBC will release its Manufacturing Purchasing Managers Index (PMI) for China tomorrow.

The US will announce final fourth-quarter GDP figures for 2014. Economists expect a slight upward revision from the earlier reading of 2.2%. Thailand will report its manufacturing production index the same day.

Stocks to watch: Asia Plus Securities recommends firms that will benefit from the recent interest rate cut. They include KBANK, TMB, TISCO, KKP, MTLS, AEONTS, SAWAD, SINGER, LIT, TK and GCAP.

Tisco Securities has buy recommendations on DELTA, SPALI, TSE, ANAN, HMPRO, MTLS and SST. It also recommends stocks with high dividend yield such as CNS, MFEC, NYT and STPI.

Technical view: Bualuang Securities sees support at 1,500 and resistance at 1,560. Finansia Syrus sees support at 1,520 and resistance at 1,544.

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