RECAP: Asian currencies and equities were largely subdued on Friday, with the baht and South Korean won leading declines, as increasing scepticism over whether the Federal Reserve is done with interest rate hikes kept risk appetite in check.
Thai shares moved in a range of 1,395.83 to 1,427.13 points before closing yesterday at 1,397.43 points, down 1.3% from the previous week, with daily turnover averaging 35.2 billion baht.
Retail investors were net buyers of 4.41 billion baht, followed by brokers at 699 million baht and institutional investors 23.9 million baht. Foreign investors were net sellers of 5.14 billion baht.
NEWSMAKERS: The US inflation expectation was revised up to 4.5% in November, the highest reading since April 2023, from 4.4% in preliminary results released two weeks ago, according to the University of Michigan's consumer survey final results issued Wednesday. The figure gained from 4.2% in October and 3.2% in September.
- The number of Americans applying for unemployment benefits fell more than expected by 24,000 to a seasonally adjusted 209,000 for the week ending on Nov 18, the Labor Department said on Wednesday. Economists polled by Reuters had forecast 226,000 claims for the week.
- The Federal Open Market Committee (FOMC) minutes from the Oct 31 meeting suggested the FOMC will proceed cautiously with monetary policy and may raise interest rates if inflation does not meet the target.
- The American Petroleum Institute reported an increase in the US crude oil stock by 9.1 million barrels last week, while the gasoline stock fell by 1.79 million barrels and heating oil and diesel decreased by 3.5 million barrels.
- The US imposed sanctions this week on Russian shipping companies and oil tankers that are pricing oil above the G7 ceiling.
- European Central Bank officials agreed they should raise borrowing costs again if needed despite deciding against such a move in October, according to an account of their last policy meeting.
- Sweden's central bank kept its policy rate on hold at 4.00% on Thursday and said it was ready to hike again if inflation proved stubborn. The Riksbank said inflation, which peaked at more than 10%, was moving in the right direction thanks to eight consecutive rate hikes.
- Turkey's central bank on Thursday raised its main interest rate more than expected to 40% from 35% as part of a concerted campaign to tackle soaring inflation in the country. Inflation tallied 61.4% in October and is forecast to rise further and peak in May next year at around 70-75%.
- Sri Lanka's central bank cut key interest rates on Friday by 100 basis points, reducing the standing deposit facility rate and the standing lending facility rate to 9% and 10%, respectively, and taking total rate cuts to 650 bps since the current easing cycle began in June. The unexpected move is aimed at boosting growth as inflation is likely to remain subdued over the medium term.
- Japan's core consumer price index, which excludes volatile fresh food costs, rose 2.9% year-on-year in October, government data showed on Friday, lower than the 3.0% expected by economists in a Reuters poll. Core inflation had slowed to 2.8% in September from 3.1% in August, the first time it was below 3% since August 2022.
- Sam Altman is returning to lead OpenAI less than five days after his surprise dismissal from one of the world's most valuable startups. Mr Altman was fired on Nov 17 after clashing with the board over his drive to transform OpenAI from a non-profit organisation focused on AI scientific exploration into a business that builds products, attracts customers and lines up the funding needed to power AI tools.
- China's embattled investment conglomerate Zhongzhi Enterprise Group said on Wednesday it is "severely insolvent" while disclosing a financial shortfall of up to 260 billion yuan ($36.5 billion). The company has debts ranging from about 420 to 460 billion yuan ($59-$64.6 billion), more than twice its assets of 200 billion yuan.
- Toshiba shareholders on Wednesday approved during an emergency meeting consolidation of the company's shares as the 148-year-old industrial conglomerate aims to rebuild itself as a private firm. The decision allows a consortium led by Japan Industrial Partners to buy all of Toshiba's remaining shares and the company to be delisted from both the Tokyo Stock Exchange and Nagoya Stock Exchange on Dec 20.
- Japan's Mitsubishi Heavy Industries said on Wednesday it expects to double its defence revenue to about ¥1 trillion ($6.68 billion) in three years. The increase would be partially from the expansion of facilities to build missiles and develop next-generation fighter jets.
- Prime Minister Srettha Thavisin said on Thursday Thailand's economy was in crisis, stressing the need to forge ahead with the government's controversial 500-billion-baht digital handout scheme.
- The Securities and Exchange Commission (SEC) says the Thailand ESG Fund (TESG) is expected to be established by early December so that investors can deduct their investment from personal income for the 2023 tax year.
- The Thai SEC is preparing to ban Thai investors from trading non-voting depository receipts (NVDRs), aiming to close an avenue for fraud in the capital market following the More Return Plc case.
- The Stock Exchange of Thailand (SET) plans to set up a special task force with representatives from foreign bourses to probe short selling, and it ordered brokers to submit customer short sales data within 15 days. The SEC is preparing to inspect transactions involving naked short selling on the SET to enhance investor confidence.
- The Federation of Thai Industries reported automobile exports in October tallied 105,726 units, an increase of 12.2% as markets expanded in Australia, the Middle East and Europe. Total automobile exports are projected to reach 1.1 million units in 2023 with a total value of 1 trillion baht.
- The National Economics and Social Development Council reported Thai GDP growth of 1.5% in the third quarter, lower than expected as exports were sluggish. GDP is projected to grow 2.5% this year and 3.2% next, though estimates do not account for the impact of the digital wallet scheme.
- The Real Estate Information Center says demand for housing fell 7% year-on-year in terms of units and 2.6% in transfer value across Thailand in the third quarter, attributed to weak purchasing power, particularly for those looking for mid- to low-priced housing.
COMING UP: On Monday, China reports industrial sector profit for October. On Tuesday, the US releases the September home price report from S&P/Case, the consumer confidence index for November from the Conference Board, and the production index of the same month from Fed's Richmond Branch.
- On Wednesday, the US reports third-quarter GDP and the oil weekly inventory from the Energy Information Administration. On Thursday, Opec+ has a meeting and China releases the Purchasing Managers' Index (PMI) for manufacturing and services from NBS.
- On the local front, the Bank of Thailand has an Monetary Policy Committee meeting on Wednesday and Thursday, and is due to release Thailand's economic review.
STOCKS TO WATCH: Asia Plus Securities recommends investing in stocks with a high free float that are targeted by institutional investors and active funds. These include CENTEL, TISCO, AMATA, SIRI, TU, CPN, WHA, SCC, CK, STEC, and BH.
- InnovestX Securities recommends big-cap stocks in the SET50 that are expected to be targets of the TESG Fund. Stocks in the SETESG Index with ESG ratings of AAA or AA and stocks whose prices have declined more than the SET year-to-date are recommended, including SCGP, OR, CPALL, BEM, GULF, CRC and HMPRO.
- Stocks with fourth-quarter earnings expected to grow year-on-year are another play, including ERW, AOT and AP.
- Tisco Securities recommends stocks with profit potential exceeding the market average as analysts possibly adjust profit targets upwards. These include AU, AWC, BA, BDMS, CPN, OR, SIRI, TOA and WHAUP.
- Stocks expected to benefit from falling bond yields include MTC, TIDLOR, AEONTS, GPSC, GULF, EGCO and RATCH. For TESG Fund target stocks, Tisco recommends BDMS, BEM, CBG, CPALL, CPN, MAJOR and SCB, as well as stocks benefiting from the digital wallet and e-refund schemes such as CPALL, COM7, CRC and HMPRO.
TECHNICAL VIEW: Kasikorn Securities sees support at 1,390 points and resistance at 1,425. Finansia Syrus Securities sees support at 1,360 points and resistance at 1,430.