China worries depress stocks as set drifts down

China worries depress stocks as set drifts down

A decline of 6.1% in February export value compounds the gloomy economic outlook for Thailand.
A decline of 6.1% in February export value compounds the gloomy economic outlook for Thailand.

Recap: Asean stocks retreated last week, weighed down by worries over China's economic health after the world's second largest economy reported disappointing manufacturing data. The Thai market succumbed to selling pressure as new data showed the export slump deepening, pushing the main index below 1,500.

The SET Index moved in a range of 1,496.02 and 1,539.57 points, before closing at 1,495.22, down 2.2% from the previous week, on weak turnover averaging 36.72 billion baht a day.

Foreign investors were net sellers of 3.5 billion baht and brokers sold 198.27 million. Institutional investors were net buyers of 2.24 billion baht and retail investors bought 1.45 billion more than they sold.

Big movers: The developer Platinum (PLAT) failed to trade above its 7.40-baht IPO price on its opening day, falling 12.8% to 6.45 baht. Top loser UREKA fell 32.4% to 1.36 baht and top gainer NPARK rose 25% to 0.05 baht. JAS led in volume, down 4.2 % to 5.70 baht. Tops in value were JAS; TRUE, down 4.65% to 12.30 baht; and BBL, falling 1.6% to 180 baht.

Newsmakers: The preliminary Markit Economics euro zone composite purchasing managers' index (PMI), based on surveys of thousands of companies and seen as a good growth indicator, rose to a four-year high of 54.1 from 53.3 in February. It was the 21st month above the 50 level that separates growth from contraction.

German business sentiment rose for a fifth month in March. The Ifo business climate index, based on a survey of 7,000 firms, climbed to 107.9 from 106.8 in February. French business sentiment also rose from 94 in February to 96, its highest level since April 2012.

Activity in China's factory sector dipped to a 11-month low in March as new orders shrank. The flash HSBC/Markit PMI dipped to 49.2.

The Philippine central bank held its benchmark interest rate at 4% as an anticipated acceleration in economic growth reduces the need for stimulus.

The Asian Development Bank (ADB) forecast that developing Asia would grow by 6.3% this year and next, buoyed by soft global commodity prices and a strengthening recovery in major industrial economies. However, it lowered Thailand's 2015 growth forecast to 3.6% from 3.9%.

Vietnam's growth held above 6% in the first quarter as manufacturing supported an economy that's still grappling with an overhang of bad debt. GDP rose 6.03% from the same period a year earlier.

Thai exports fell for a second straight month in February, down 6.14% year-on-year to $17.2 billion, largely due to lower global oil and farm product prices. Shipments of farm products fell 12.5% to $2.49 billion.

Thai banks' loan growth fell 0.41% year-on-year in the first two months of 2015, adding to signs of lukewarm first-quarter economic growth. Fourteen commercial banks' outstanding loans amounted to 10.1 trillion baht as of Feb 28, down by 41.51 billion Dec 31.

Kasikorn Research Center has lowered its economic growth forecast for this year to 2.8% from 4% due to the delayed recovery, tepid exports and weak domestic consumption. It has trimmed its forecast for export growth to zero from 3.5% and for domestic consumption growth to 2% from 3.1%.

The National Broadcasting and Telecommunications Commission (NBTC) has ruled that the purchase by MAI-listed Solution Corner (1998) Plc (SLC) of a 12.27% stake in SET-listed Nation Multimedia Group Plc (NMG) did not violate any digital TV-related rules.

Jasmine International Plc (JAS) plans bid for 4G spectrum through a joint venture with a foreign telecoms firm with an investment budget of up to 35 billion baht.

Total Access Communication Plc (DTAC) is proposing to reshuffle and return its unused spectra to the telecom regulator for 4G auctions. The move is aimed at easing limitations on available frequencies.

The developer Sammakorn Plc (SAMCO) aims to quadruple annual revenue to 4 billion baht over the next five years after the entry of new major shareholder RPCG Plc (RPC). SET-listed RPCG, formerly Rayong Purifier Plc, has paid 400 million baht for an additional 25% stake in Sammakorn, raising its holding to 48%.

Coming up this week: The Thai Finance Ministry will release its revised economic growth forecast. Also due are US pending home sales for February and euro zone consumer confidence.

The Bank of Thailand will release its economic update tomorrow. Also due are euro zone inflation figures for March.

Thailand's March inflation, China's manufacturing PMI, US manufacturing and private sector employment, and euro zone manufacturing PMI will be released on Wednesday.

Thailand's consumer confidence index for March, and US weekly jobless claims and factory orders for March are due on Thursday.

Stocks to watch: Tisco Securities has four investment themes — stocks expected to benefit from quarter-end window dressing are BJC, ECF, EGCO and PS; stocks falling sharply despite little change in fundamentals, such as SIM, SAMART, ITD and LPN; stocks with high beta, high liquidity and upside including CK, PTTEP, STEC, TPIPL and TRUE; and stocks expected to outperform before the Songkran holiday, namely MALEE, SST and TFD.

Bualuang Securities recommends accumulating SPALI, BRS, PTTEP, SAMART and CENTEL.

Technical view: Finansia Syrus sees support for the SET at 1,483 points with resistance at 1,520. Bualaung Securities sees support at 1,480 and resistance at 1,510.

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