RECAP: Most Asian equity markets edged lower on Friday as the dollar gained after US inflation showed only a moderate increase, fanning hopes that the Federal Reserve is done with interest-rate increases.
Thai shares moved in a range of 1,514.38 and 1,540.22 points this week before closing on Friday at 1,535.16, up 0.31% from the previous week, with daily turnover averaging 55.34 billion baht.
Institutional investors were net buyers of 425.25 million baht, followed by brokers at 369.39 million, and foreign investors at 233.49 million. Retail investors were net sellers of 1.03 billion baht.
NEWSMAKERS: The US Consumer Price Index in July rose 3.2% from a year earlier, lower than the 3.3% expected. The market now expects the Fed to stop tightening monetary policy, with JP Morgan saying the US economy should avoid recession this year but could slow next year.
- US employers created 187,000 new jobs in July, lower than the 200,000 expected, while the unemployment rate was 3.5%, below the 3.6% expected. Average hourly wages increased by 4.4%, above the 4.2% forecast.
- The Opec+ alliance has decided to maintain production levels as agreed in June, resulting in output cuts totalling 3.66 million barrels per day until 2024, including 1 million by Saudi Arabia alone, to support prices.
- Chevron and Woodside Energy Group are holding talks with unions to avert strikes at Australian LNG facilities that together account for around 10% of global production. The disruption has pushed LNG pries in the US and Europe to surge significantly.
- US President Joe Biden issued an executive order to restrict investment by US companies in some Chinese tech companies that produce sensitive materials. If they do invest, they will be required to notify the government of other technology investments.
- China has allowed group tours to resume to more than 70 countries, including the US, UK, South Korea and Japan, further unwinding Covid-era travel curbs. Beijing allowed group tours to Thailand to resume earlier this year.
- The Japanese carmaker Mitsubishi Motors plans to invest 5.7 trillion rupiah ($375 million) in 2024 to expand capacity in Indonesia, the country's industry ministry said this week.
- The US trade deficit in June was $65.5 billion, higher than expected but down 4.1% from a year ago, the Department of Commerce reported.
- Moody's downgraded the credit ratings of 10 small and medium-sized US banks by one level and said it was considering downgrading six larger banks, including Bank of New York Mellon, US Bancorp, State Street and Trust Financial.
- Chinese exports in July fell 14.5% year-on-year, the steepest fall in three years, due to a decline in global demand; imports slowed 12.4%.
- Chinese consumer prices in July contracted 0.3% from a year earlier, the first decline in 29 months as an uncertain future weighed on sales of cars and other durable goods.
- UBS said it plans to lay off more than 70% of the employees of Credit Suisse in Asia after completion of the merger between the two Swiss financial groups.
- The Japanese tech giant Rakuten Group reported a consolidated net loss of ¥139.9 billion ($966 million) for the first half, with losses in the mobile business overshadowing profits from internet and financial services.
- The Thai baht and South Korean won have strengthened to their highest against the yen in years, thanks to higher interest rates and better economic fundamentals that stand in contrast to Japan's decline. The baht topped 4.18 yen at one point this month, its strongest since July 1997.
- Sony Group reported a net profit of ¥217 billion ($1.5 billion) for the April-June period, down 16.7% from the previous year. The Japanese company raised its full-year profit forecast through March 2024 to ¥860 billion, down 14.5% from the previous year but ¥20 billion higher than the previous forecast.
- Japanese GDP rose at an annualised 0.2% in June, thanks to a recovery in exports. Exports of goods and services rose 4.7% month-on-month, reversing a 3% contraction in May. Private consumption, which accounts for over 50% of GDP, was down 0.7%.
- SoftBank Group announced a net loss of ¥477 billion ($3.3 billion) in the three months ending June, slicing its loss by 85%, year-on-year, thanks to an improving valuation for its flagship Vision Fund, as technology stocks rebounded.
- The Taiwanese chip giant TSMC said its board had approved a $3.8 billion investment in a factory in Germany, as well as a capital injection of $4.5 billion to its Arizona plant.
- Honda Motor Co said net profit for the April-June business period jumped more than twofold to ¥363.1 billion ($2.5 billion), helped by a strong recovery in sales in North America.
- Cathay Pacific Airways swung to a net profit in the first half, as strong demand and high post-pandemic ticket prices bolstered earnings and offset a slump in cargo revenue. It had posted losses in the first six months of 2020, 2021 and 2022.
- PayPal is rolling out a stablecoin, the first by a large financial company and a potentially significant boost to the sluggish adoption of digital tokens for payments. PayPal USD (PYUSD) is fully backed by US dollar deposits, short-term Treasuries and cash equivalents.
- Rice prices in Asia have spiked to a 15-year high on rising concerns about food production, drought in Thailand and India's suspension of some exports. Thai 5% broken white rice, an Asian benchmark, is at $648 a tonne, up almost 50% in the past year.
- Thai exports may contract by more than 2% this year, amid high global interest rates and higher global energy prices in the coming Northern Hemisphere winter, said the Federation of Thai Industries (FTI).
- The Federation of Thai Capital Market Organizations (Fetco) reported stable investor confidence, with the formation of a new government and the tourism recovery seen as catalysts. The overall confidence index in July rose 2.2% to 83.45, remaining in the neutral zone. But foreign investors' confidence sank 33% from June, slipping into the "bearish zone".
- The University of the Thai Chamber of Commerce (UTCC) forecasts 10.6 billion baht will circulate during the Aug 12-14 long weekend, a 2.3% drop from last year, as people are more cautious after a six-day holiday at the end of July.
- The National Credit Bureau reported bad household debts of 1 trillion baht in the second quarter, with mortgage and vehicle non-performing loans of 380 billion.
- Inflation in July remained tame, with the headline consumer price index (CPI) up 0.38% year-on-year, after a rise of 0.23% in June, the Ministry of Commerce said, helped by lower food and energy prices.
- Advanced Info Service Plc (ADVANC) posted strong net profit of 7.18 billion baht in the second quarter, up 14% year-on-year, on growth in core service revenue and cost controls. Revenue slipped 1.1% to 44.8 billion baht on seasonally low mobile device sales.
COMING UP: China will report July industrial production and the United States will report July retail sales on Tuesday. On Wednesday the US will release July home building numbers and industrial production. Locally, the Bank of Thailand (BoT) will release the minutes of its Aug 2 policy meeting on Wednesday.
STOCKS TO WATCH: InnovestX Securities recommends avoiding stocks expected to report weak Q2 profit, especially in food (TU, CPF GFPT and BTG) and securities (ASP and MST). As well, firms potentially affected by El Nino, which will erode purchasing power in the agricultural sector, include commerce (GLOBAL), finance (MTC, SAWAD), automotive (SAT, STANLY), beverages (CBG), hydropower (CKP), and food & agriculture (CPF and GFPT).
- Asia Plus Securities notes China's lifting of restrictions on group tours to 70 more countries is a catalyst for global tourism and positive for related stocks, namely MINT, CENTEL, ERW and AOT.
TECHNICAL VIEW: InnovestX Securities sees support at 1,514 points and resistance at 1,550. Krungsri Capital Securities sees support at 1,515 and resistance at 1,550.
