Stocks suffer from Yuan shock before late rally
Recap: The move by China's central bank to devalue the yuan by adjusting its reference rate sent the currency down 4.6% and sent shockwaves through global financial markets. The Thai stock market slipped below 1,400 on Thursday before a bargain-hunting rally on Friday.
The SET Index moved in a range of 1,425.68 and 1,380.10 points and closed at 1,413.92, down 1% from the previous week, in moderate trade averaging 38.1 billion baht a day. Foreign investors were net sellers of 5.92 billion baht and brokers sold 99 million. Institutional investors bought 617.12 million baht and retail investors 5.4 billion.
Big movers: The IT retail chain COM7 jumped 24.2% above its IPO price of 3.35 baht to 4.16 baht on its first day on the SET on Aug 10, and closed on Friday at 3.54 baht. Pioneer Motor Plc (PIMO) jumped 92% from its IPO price of 1.30 to 2.50 baht on its MAI debut on Thursday and closed on Friday at 2.26 baht.
Top loser SSI slid 33.3% to 0.10 baht, and top gainer NEWS added 23.1% to 0.32 baht. AJD led in volume, advancing 21.32% to 1.59 baht. Leading in value were COM7, gaining 5. 7%; PTT, down 4.1% to 302 baht; JAS, unchanged at 5.05 baht; and AOT, falling 2.75% to 283 baht.
Newsmakers: China's central bank calmed market nerves on Friday, saying it would act to curb excessive yuan volatility, adding that it saw no basis for depreciation to persist.
Yuan-induced turbulence has more forecasters predicting the US Federal Reserve will wait until December to raise interest rates. Earlier forecasts had shown more than a 50% likelihood of a September move.
China's industrial production rose 6% year-on-year in July, down from a 6.8% increase in June. Retail sales rose 10.5% in July and fixed-asset investment expanded 11.2% in the January-July period.
US retail sales rose 0.6% in July from flat growth in June.
Malaysia's economy grew 4.9% in the second quarter, its slowest pace in nearly two years and down from 6.5% in the same period last year, as exports and private consumption weakened.
Thailand's ratio of public debt to GDP is expected to peak at 53% in 2019, assuming infrastructure investments and borrowings amount to 300-400 billion baht a year. The public debt forecast is based on 1 trillion baht in infrastructure investment and 4% average annual economic expansion. The ratio is forecast to edge down to 52% in 2020 after most of the infrastructure budget is disbursed.
The National Broadcasting and Telecommunications Commission (NBTC) this week will order True Move and DPC, a unit of AIS, to pay a total of 1.7 billion baht to retain their customers after their mobile concessions expire.
The Thai Chamber of Commerce said Thai exports could contract by as much as 4-6% this year in light of the weaker yuan, compared with earlier forecasts of a 3% decline.
The government reported 17.5 million tourists visited Thailand and spent 818.4 billion baht from January through July, on track for 29-30 million arrivals for the year and revenue of 1.6 trillion to 1.8 trillion baht.
The Federation of Thai Industries will cut its domestic car sales projection for 2015 to 800,000 from 850,000, the third straight year of declines.
The tepid automobile market has five existing eco-car makers fearing they may not meet the first-phase targets of 100,000 units each per year, set the government in return for investment incentives. Nissan said sales of its two models, March and Almera, had declined sharply this year.
Thailand will sign a government-to-government deal with China on Sept 14 to sell 1 million tonnes of rice, with delivery starting in December. The shipments involve new 5% white rice and Hom Mali fragrant rice, part of a 2-million-tonne deal made last December.
Capital market investor confidence for the coming three months is off sharply due mainly to the economic slowdown, dropping to 57.27 from 98.28 in the previous survey by the Federation of Thai Capital Market Organisations (Fetco).
BANPU reported a Q2 net loss of 54 million baht versus a profit of 69 million in the first quarter and 686 million in the same period last year. It said coal sales volume declined because of production halts at its Australian mines, and falling world prices squeezed its gross margin.
TRUE delivered a Q2 net profit of 1.3 billion baht, down 19% quarter-on-quarter, due to higher sales and administrative expenses.
TOP reported Q2 net profit of 6.2 billion baht, up 38% quarter-on-quarter and 201% year-on-year.
SAT announced a Q2 net profit of 65 million baht, down 66% on the quarter and 49% on the year due to a decline in sales volume affected by the automotive industry slowdown.
The budget carrier Nok Air narrowed its loss in Q2 to 51.3 million baht from 159 million in the same period last year. Bangkok Airways posted a Q2 net profit of 102 million baht compared with a loss of 321 million a year earlier. Airports of Thailand said its net profit jumped 64.4% year-on-year to 1.59 billion baht, driven by a surge in passenger traffic through the six airports it operates.
Coming up this week: The National Economic and Social Development Board will release official Thai second-quarter GDP figures today, which is also the last day of the corporate earnings reporting season. Japan will also release Q2 GDP data today.
US housing starts and building permits for July will be released tomorrow, followed by July inflation figures on Wednesday.
Thai auto sales for July will be reported on Thursday. Due the same day are minutes of the July Fed meeting, US jobless claims and existing home sales.
The euro zone consumer confidence index for August will be released on Friday
Stocks to watch: Tisco Securities' monthly recommended stocks are AAV, BCP, BEAUTY, CPN and INTUCH as they are expected to show good performance and pay extra dividends. For this week, the broker recommends SAPPE, STPI, and MTLS.
Asia Plus Securities says small and mid-cap stocks are expected to outperform the market which will be depressed by the baht's pullback after the yuan depreciation. It recommends SIRI for strong earnings and a high dividend yield of 6.3%
Technical view: Bualuang Securities tips support at 1,350 and resistance at 1,412 points. Tisco Securities puts support at 1,380 and resistance at 1,425 points.