Golden Week optimism buoys most Asian markets

RECAP: Stocks rose yesterday in most Asian markets on the last trading day of the quarter amid optimism over spending during China's Golden Week holiday and reports of a possible summit between US and Chinese leaders.

Thai shares continued to drift lower, with the SET Index closing below 1,500 points on Monday for the first time since February 2021.

The SET index moved in a range of 1,524.97 and 1,471.43 this week, and closed yesterday at 1,471.43, down 3.4% from the previous week, with daily turnover averaging 61.98 billion baht.

Retail investors were net buyers of 6.84 billion baht, while foreign investors were net sellers of 4.1 billion, followed by brokers at 2.53 billion and institutions at 208.35 million baht.

NEWSMAKERS: Senior US and Chinese diplomats have held "in-depth" talks in Washington, covering issues such as North Korea, Myanmar and maritime security, the State Department said, as they explore a possible summit between presidents Xi Jinping and Joe Biden in November.

• China's longest holiday of the year began yesterday amid hopes of pent-up demand to drive the recovery, which has started to show signs of life. A record number of Chinese are choosing to travel at home during Golden Week, which ends on Oct 6, but outbound demand is weak as air ticket prices are up 30% from a year ago.
• Profits of Chinese industrial companies in August rose by 17.2% year-on-year after a drop of 6.7% in July.
• The founder of China Evergrande has been placed under "residential surveillance", one step short of house arrest, as concerns mount about the heavily indebted developer. The group, which owes more than $300 billion, did not say what Hui Ka Yan was being investigated for.
• US real GDP expanded by 2.1% year-on-year in the second quarter, in line with a previous estimate and expectations by economists.
• The US consumer confidence index in September fell to a 4-month low amid concerns about inflation and high interest rates. Consumer spending rose 0.8% in the second quarter, the weakest advance in over a year.
• Austan Goolsbee, head of the Chicago Fed, said US monetary policy makers may be in danger of raising interest rates too much as they place too much emphasis on the need for job losses to tame inflation.
• Japan won't rule out any options to deal with excessive currency volatility, Finance Minister Shunichi Suzuki said on Thursday, reiterating a warning against speculative moves on the yen which has depreciated to near 150 per dollar.
• Toyota Motor said global sales rose 9% year-on-year in August to a record 923,180 vehicles thanks to an improvement in supply conditions and stronger demand.
• Mitsubishi Motors is considering ending car production in China, sources said, amid a rapid shift to EVs in the country. The Japanese automaker halted output in China in March due to falling sales and the rise of local brands, and now plans to focus on Southeast Asia.
• Honda Motor plans to release its first mass-produced EV model in North America at the start of 2024. The Prologue SUV is being jointly developed with General Motors and will be made at a GM plant.
• Hyundai and Kia are recalling nearly 3.4 million vehicles after US safety regulators said a fluid leak in the anti-lock brake control module could cause an electrical short and touch off a fire.
• Alibaba Group said it intends to spin off its logistics arm, Cainiao Smart Logistics Network, through a Hong Kong share listing. It would be the first of as many as six Alibaba units to be spun off and listed.
• The telecommunications giant Huawei Technologies is facing growing trouble in Europe, with Germany becoming the latest country to consider a ban on Chinese manufacturers in its 5G networks.
• US regulators have sued Amazon, alleging that the e-commerce giant uses monopoly power to push up prices and stifle competition. Amazon dismissed the allegation and said it looked forward to defending itself in court.
• Ford Motor Co is pausing work on a $3.5-billion EV battery plant in Michigan as the United Auto Workers strike against the three biggest US carmakers continues. The UAW has pared back a demand for a 40% wage raise over four years to a minimum of 30%.
• The US is expected to indefinitely extend the suspension of chip exports to China without authorisation to apply to Korean manufacturers, Samsung Electronics and SK Hynix.
• JP Morgan forecasts India may be listed among the three fastest growing markets in Asia Pacific next year, along with Australia and Japan.
• Bank of Thailand (BoT) Governor Sethaput Suthiwartnarueput said yesterday that that now was a good time to pause interest-rate increases and keep them at a "neutral" level, following an unexpected hike on Wednesday to a 10-year high of 2.50%, intended to contain inflation.
• The BoT has revised down its forecast for Thai GDP growth this year to 2.8% from 3.6% earlier, while upgrading its 2024 prediction to 4.4% from 3.8% on an expected recovery in domestic demand due to a turnaround in exports and a boost from government policies.
• The cabinet has approved a one-year moratorium on agricultural loans (principal not exceeding 300,000 baht) for 2.7 million borrowers with total principal of 283 billion baht. The Bank of Agriculture and Agricultural Cooperatives (BAAC) will be compensated for lost interest at 4.5% or 11 billion baht a year.
• Labour Minister Pipat Ratchakitprakarn said the minimum wage would rise as a New Year gift to workers, but not necessarily to 400 baht a day (from 328-354 baht now) as the Pheu Thai Party has been promising. The exact figure will be finalised by late November.
• The Mass Rapid Transit Authority of Thailand board has approved a cut in the Purple Line fare from Dec 1 to 20 baht, the same as for the State Railway of Thailand's Red Line. It expects a loss of 190 million per year.
• The local retail chain Big C Supercenter is expanding to Hong Kong as a stepping stone to mainland China. The company has delayed its plan to list in both Thailand and Hong Kong until next year, in anticipation of better economic conditions.
• Bangkok Bank raised its deposit and loan rates, effective yesterday, following the central bank's rate hike. Deposit rates increased by between 10 and 25 basis points while loan interest rates are up by 25 basis points.
• Exports grew 2.6% in August, better than expected and positive for the first time in 11 months, due to an expansion in agricultural and industrial products, which rose for the first time in 4 and 3 months, respectively.
• The Tourism Authority of Thailand (TAT) expects 5 million Chinese tourists this year, generating revenue of 300 billion baht. The Thai Hotel Association says bookings have gone up 10-20%. A visa-free programme for visitors from China and Kazakhstan is expected to be a major contributor to more arrivals.
• IDC, the global market intelligence body, estimates artificial intelligence (AI) expenditure in Asia Pacific at US$78.4 billion by 2027, while Thailand is expected to invest 59 billion baht in big data by 2025.
• Prime Minister Srettha Thavisin said the country expected to receive investments totalling $5 billion from leading global companies such as Tesla, Google and Microsoft, following his talks with corporate leaders in New York while he was attending the UN General Assembly.
• The Ministry of Commerce reports more than 60,000 new businesses registered in the first eight months of 2023, a 10-year high, as a result of the tourism recovery.
• The Office of Agricultural Economics says El Nino is affecting world rice yields, raising prices by 20-28%, which is a good opportunity for Thai rice exporters.
• Muang Thai Life Assurance has joined Line BK, a social banking service provider, to launch an insurance brokerage targeting low-income earners and freelancers.

COMING UP: On Monday, the EU and the US will report September manufacturing purchasing managers' index (PMI) updates. Locally, the Ministry of Commerce will release September inflation figures on Thursday.

STOCKS TO WATCH: Trinity Securities recommends investing in stocks that are expected to outperform the market in the short term. They include exporters that will benefit from a weak baht, such as KCE, HANA, AAI, ITC, CPF, BTG, GFPT and TU. Shipping and logistics stocks such as PSL, RCL, III, LEO, SJWD and WICE have potential, as do hospital stocks, namely BDMS, BH, BCH and CHG.

• Asia Plus Securities recommends stocks that will benefit from the government's three-year debt moratorium for 2.7 million farmers, effective from Oct 1. This is expected to support domestic consumption and benefit non-bank stocks such as BJC, CRC, JMT, JMART, MTC, SAWAD and TIDLOR.
• High interest rates, meanwhile, will benefit banks, with BBL and TISCO the top picks.

TECHNICAL VIEW: InnovestX Securities sees support at 1,462 points and resistance at 1,508. Asia Plus Securities sees support at 1,475 and resistance at 1,500.