Asian shares stall on risk aversion

RECAP: Asian equities were mostly in the red while currencies logged some gains on Friday, as stock investors remained risk-averse following strong economic data from the United States and continued uncertainty in China.

Thai shares moved in a range of 1,542.66 and 1,565.74 points this week before closing on Friday at 1,547.17, down 0.9% from the previous week, in low daily turnover averaging 40.67 billion baht.

Retail investors were net buyers of 4.29 billion baht, followed by brokers at 198.96 million. Foreign investors were net sellers of 3.55 billion baht, followed by institutions at 939.04 million.

NEWSMAKERS: Shares of Apple Inc plunged 6.4% over two days after China prohibited government employees from using iPhones for work, which will hurt the company in its largest market. A new phone from Huawei and a rising tide of nationalism in China could also dent Apple sales.

• Workers at Chevron liquefied natural gas sites in Australia began partial strikes on Friday, potentially disrupting output from facilities that account for 7% of global supply. The dispute has rattled global markets, with benchmark gas futures prices in Europe jumping 11% in immediate response to the news of the walkout.
• Goldman Sachs sees a 15% probability that the US economy will enter recession in the next 12 months, down from 20% earlier. The change reflects lower inflation, which may lead the Federal Reserve to stop raising interest rates.
• The FedWatch Tool sees a 93% chance of no change in the benchmark interest rate at the Fed's Sept 19-20 meeting but a 42% chance of a rate hike in November.
• US initial jobless claims last week fell to a seven-month low, leading to concern that the Fed may keep rates high for longer. Non-farm payrolls in August rose by 187,000, higher than expected, and unemployment was 3.8%, the highest since February 2022. However, the manufacturing purchasing managers' index contracted for a 10th straight month.
• Moody's has raised its US GDP growth forecast for 2023 to 1.9% from 1.1%, but cut its forecast for China to 4.0% from 4.5% as the recovery is seen as weak.
• Chinese exports fell for a fourth month in a row in August, down 8.8% year-on-year, amid weak demand at home and abroad. Imports also declined 7.3%, official figures show.
• Japan's economy grew less than initially estimated, at an annualised 4.8% in the second quarter, compared to a preliminary estimate of 6%, data showed on Friday. The main factor behind the downgrade was a 1% drop in capital expenditure.
• Oil prices rose after Saudi Arabia said it would extend its voluntary production cuts of 1 million barrels per day until the end of this year. Russia will also extend its export cuts of 300,000 million bpd until year-end.
• HSBC will halt remittance services to and From Russia and Belarus for corporate clients next month as financial institutions respond to Western sanctions over the Ukraine war.
• The euro zone economy barely grew in the second quarter as new data showing a dismal performance for exports forced a downward revision in overall numbers. GDP rose only 0.1% in the three months through June, new figures showed.
• The Investor Confidence Index rose to a seven-month high in August on optimism about the formation of a new government and likely economic stimulus, said the Federation of Thai Capital Market Organizations (Fetco). The index of expected market conditions over the coming three months surged 69.3% from the previous month to 141.27, signifying bullishness.
• Prime Minister Srettha Thavisin will make his government's policy statement to parliament on Monday. The cabinet will meet on Tuesday to discuss measures to support energy costs and the digital wallet, which is expected to be ready by Feb 1, 2024.
• The Joint Standing Committee on Commerce, Industry and Banking has lowered its GDP growth forecast for Thailand to a range of 2.5% to 3.0%, from 3% to 3.5% earlier,. It cited weak second-quarter GDP growth of only 1.8%, well below the 3.1% expected. The group also revised down its export forecast to a 2% contraction, from -1% earlier.
• The Bank of Thailand says it plans to downgrade its GDP forecast in light of economic growth and inflation that have been lower than expected.
• The BoT reported the business sentiment index (BSI) in August slipped to 48.9, from 49.3 in July, as confidence in manufacturing declines.
• Inflation as measured by the consumer price index (CPI) rose 0.88% year-on-year in August, compared with 0.38% in July, mainly reflecting higher prices for energy products.
• SET-listed Dhipaya Group Holdings is launching the motor insurance company Insurverse, billed as the country's first pure digital insurer, to attract younger customers.
• New Industry Minister Pimpatra Wichaikul aims to speed up the introduction of the EV 3.5 package in a bud to attract Tesla to invest in the country. She also aims to promote a four-region economic corridor and unlock obstacles to exports of halal food.
• Deputy Finance Minister Julapun Amornvivat said the 10,000-baht digital wallet, a key promise of the new government, will run on a blockchain and can be used at grocery, convenience and department stores and petrol stations. It is expected to stimulate the economy by up to 2 trillion baht and push 2024 GDP to grow by 5%.
• The Oil Fuel Fund Office will propose two plans to cut energy prices to the new government: either cut the diesel excise tax to support the Oil Fund, or use the fund mechanism to subsidise fuel prices with a loan of 55 billion baht.
• The Excise Department proposes to cut the diesel excise tax to 4 baht a litre from 6 baht now, which would lower the diesel price to 30 baht, in line with government policy.
• Fuel consumption grew by 2.5% in the first half of 2023 as the domestic economy improved, the Energy Policy and Planning Office reported. It expects 2023 consumption to grow 2.1%, with world oil prices ranging from $77 to $87 per barrel.
• The Board of Investment (BoI) says Taiwanese companies committed to invest more than 30 billion baht in the electronics industry in Thailand in the first eight months this year, including printed circuit boards, laptops and smart electronic devices.
• Transport Minister Suriya Juangroongruangkit said it would take about two years to make good on a promise to charge a flat fare of 20 baht per trip for rail mass transit in Bangkok, given them many players involved and lack of a common ticketing system.
• The Department of Foreign Trade has expressed concern that India's plan to suspend sugar exports will lower world supply and increase prices, with a ripple effect on prices of goods containing sugar.
• Thailand's sugar output will drop by about 18% to 9 million tonnes in the upcoming harvest season due to a severe drought, according to Thai Sugar Millers Corp.
• Airports of Thailand (AoT) is pushing ahead with the development of the fifth phase of Suvarnabhumi Airport with a budget of 240 billion baht, aiming to increase passenger capacity to 150 million annually from 120 million.
• Prices for Thai rice exports have risen by $100 tonne, or more than 15%, for the year to date due to El Nino, which is cutting the amount of rice coming into the market.
• COMING UP: The EU will release the monthly ZEW business confidence index on Tuesday. The US will reports August inflation on Wednesday.

STOCKS TO WATCH: Yuanta Securities (Thailand) has identified nine stocks viewed as attractive in terms of short-, medium- and long-term performance prospects with a focus on expected H2 profits and growth prospects. Recommended are BE8, I2, KJL, MASTER, MEB, NSL, SABINA, TTCL and WARRIX.

• InnovestX Securities recommends eight stocks across four industries for which second-half profit is expected to grow year-on-year and from the first half: PTT, BCP, KCE, HANA, BDMS, BCH, AOT, and ERW. The brokerage also recommends stocks whose prices have lagged but are expected to benefit from stimulus packages. They include stocks related to purchasing power (CPALL, CPAXT, HTC and CRC), infrastructure (GULF and KTB) and real estate (LH). Stocks expected to benefit from the return of fund inflows include KBANK and CPN.

TECHNICAL VIEW: InnovestX Securities sees support at 1,535 points and resistance at 1,600. Krungthai XSpring Securities sees support at 1,529 and resistance at 1,560.