Asian shares rebound as chipmakers jump

RECAP: Asian shares rebounded yesterday, buoyed by a rally in global chipmakers, after struggling earlier because of concerns about China's sluggish economic recovery.

Thai shares moved in a range of 1,374.08 and 1,416.91 points this week, before closing on Friday at 1,382.51, down 2.2% from the previous week, with daily turnover averaging 47.16 billion baht.

Retail investors were net buyers of 11.32 billion baht. Foreign investors were net sellers of 9.71 billion baht, followed by institutional investors at 1.44 billion and brokers at 178.35 million baht.

NEWSMAKERS: China's economy grew by 5.2% last year, hitting the government's target, but concerns about growth momentum remain amid a protracted property crisis, sluggish consumer and business confidence and weak global growth.

• China's population fell in 2023 for the second consecutive year, to 1.409 billion, down 2.08 million from 2022. The decline in 2022 was the first population drop in 60 years.
• The People's Bank of China has kept its policy interest rate unchanged at 2.50%, contrary to expectations of a decrease to combat deflation and stimulate lending.

• China's chip imports fell 15.4% in 2023 to $349.4 billion, the lowest on record, due to economic uncertainty and the US export ban on chips to China.
• Japanese core consumer prices rose 3.1% last year, the biggest increase in 41 years, as the cost-of-living crisis deepened without robust wage growth, although inflation slowed in December.
• Emerging-market stocks fell in the first half of January, trading data showed, something that hasn't happened since 2016. Sentiment has taken a knock from growing uncertainty about when the US Federal Reserve will begin to loosen monetary policy.
• US unemployment benefit applications have fallen unexpectedly to a 16-month low, signalling continuing strength in the labour market and eroding hopes of a March interest rate cut from the Fed. The probability of a move in March is now seen at 55%, down from 70% a week earlier.
• Rafael Bostic, president of the Atlanta Fed, expects the Fed to start reducing interest rates in the third quarter, as inflation is returning to the target of 2%.
• Robert Holzmann, a member of the European Central Bank's policy-setting committee, suggests the bank may not reduce interest rates at all this year.
• UK inflation unexpectedly ticked up to 4% in December from 3.9% a month earlier, dashing hopes of an early cut to UK interest rates and prolonging a cost-of-living squeeze.

• Opec forecasts global oil demand this year will rise by 2.2 million barrels per day, or about 2.2%, backed by a strong global economic recovery. The International Energy Agency, however, forecasts growth of just 1.2 million bpd. It cited economic headwinds, tighter efficiency standards and growth in EVs.
• The US Energy Information Agency forecasts average crude oil prices in 2024–25 will be little changed from 2023. In the short term, prices are expected to rise from around $78 a barrel now to $85 in March due to Opec+ production cuts.
• The US on Thursday fired more missiles at Houthi-controlled sites in Yemen, after a drone strike on a US-owned vessel in the Gulf of Aden. The shipper Maersk anticipates disruptions in Red Sea shipping will continue for 2-3 months.
• Citigroup plans to lay off 20,000 employees in the next two years following a net loss of US$1.8 billion in the fourth quarter, its worst performance in 15 years.
• Taiwanese firms slashed investment in China last year to the lowest since 2001, as they move to protect themselves amid tech disputes between Washington and Beijing. New spending in China by Taiwanese companies declined 39.8% year-on-year to $3.04 billion, government data showed.
• Toyota Motor Corp has notified its suppliers that it plans to produce a record 10.3 million vehicles globally this year, an all-time high supported by an easing chip shortage and robust demand for hybrid cars.
• Japan's Sekisui House Ltd is buying the Denver-based homebuilder MDC Holdings Inc for $4.9 billion in a deal that would make the Japanese company the fifth-largest builder of new homes in the US.
• Daihatsu Motor Co is considering a recall of two mini-vehicles found with a door defect, potentially affecting 320,000 units. The move is a follow-up to a scandal involving rigged safety tests for many Daihatsu models.
• Japan Airlines has has named its first female president. Mitsuko Tottoria, who joined the carrier as a cabin attendant in 1985, has risen through the ranks and now takes a deeply symbolic step in a country struggling to close a vast gender gap at work.

• Japan welcomed 2.73 million visitors in December, 8% higher than the pre-pandemic level in 2019, said the Japan National Tourism Organization.
• The Vietnamese EV maker VinFast has announced plans to build a $2-billion plant in southern India. It is expected to produce up to 150,000 cars per year.
• Prime Minister Srettha Thavisin yesterday insisted that the government's 500-billion-baht digital wallet stimulus would go ahead, but conceded there would be a further delay beyond May in its introduction.
• The Securities and Exchange Commission plans to allow securities companies to offer trading in spot bitcoin exchange-traded funds (ETFs) to institutional and wealthy investors, but not general retail investors.
• Binance Thailand on Tuesday officially opened its cryptocurrency exchange for trading. Binance TH is operated by Gulf Binance, a joint venture between the world's largest crypto exchange and Gulf Innova, an investment subsidiary of Gulf Energy Development Plc.
• Thailand's EV sales may double this year as Chinese manufacturers prepare to roll out their first locally manufactured models and about $2.4 billion in government incentives boost consumer demand, according to the Electric Vehicle Association of Thailand.
• The Federation of Thai Industries says prolonged tensions over the Red Sea may raise freight rates, especially on the Thailand-Europe route, to between $3,000 and $5,000 per container. However, it said businesses would struggle to pass these increased costs on in their product prices.
• The FTI said the industrial confidence index for December slipped to 88.8, from 90.9 in November, as the manufacturing sector was slowed by extended holidays, pre-holiday production rushes and a lacklustre consumer spending recovery.
• The Ministry of Industry says potential lithium reserves total 14.8 million tonnes in Phangnga, which would rank the country third globally after Bolivia and Argentina. Lithium is a key element in manufacturing EV batteries.
• Bondholders of Italian Thai Development Plc have agreed to accept the contractor's proposal for a two-year delay in redemptions in return for higher interest rates on four series of debentures. They also approved an increase in the contractor's debt-to-equity ceiling.
• The cabinet approved a reduction in the excise tax rate on diesel and similar fuels by one baht per litre, capping the price at 30 baht from Jan 20 until after the Songkran festival on April 19.
• Thai Union Plc, the world's largest tuna processor, said it would record a one-time charge of 18.5 billion baht in the fourth quarter of 2023 after exiting the struggling US restaurant chain Red Lobster. It also announced a share buyback of up to 3.6 billion baht, representing 4.3% of total shares, between Feb 20 and June 30.
• Producing electricity by rooftop solar panels will not require a factory operating licence under amended rules being drafted by the Department of Industrial Works. The new rules are expected to be enacted this year.

COMING UP: The Bank of Japan will hold a policy meeting on Tuesday, with no change expected, and the US will release an industrial manufacturing update. On Wednesday, the EU reports maufacturing and services purchasing managers' index (PMI) updates for January. The US will also update maufacturing and services PMI and weekly oil stocks. On Thursday, the European Central Bank will hold its rate policy meeting.

• Locally, the Ministry of Commerce will report trade figures while the Fiscal Policy Office will release economic data as well as an updated confidence index.

STOCKS TO WATCH: InnovestX Securities recommends selective buys based on themes with specific drivers, including stocks whose prices have underperformed the SET since the beginning of 2023, with a good profit outlook for 2024 providing an upside to prices. Top picks are AOT, BEM, HMPRO, GULF and ZEN.

• The second theme involves stocks benefiting from the Easy e-Receipt tax deduction programme that runs until Feb 15. They include CRC, MINT and ADVANC.
• In the medium term, the brokerage recommends caution with stocks of businesses likely to be affected by El Nino, which will erode purchasing power in the agricultural sector. They include finance (MTC, SAWAD), automotive (SAT, STANLY), beverages (CBG has high sugar costs) and food & agriculture (CPF, GFPT and BTG).
• DAOL Securities expects the number of tourists to reach 33 million this year, up 18% from 2023, benefiting stocks in the hotel sector. The major beneficiaries are hotels with a high proportion of revenue coming from domestic properties, led by ERW, CENTEL, MINT and SHR. AAV and AOT will also benefit from the tourism recovery.

TECHNICAL VIEW: InnovestX Securities sees support at 1,360 points and resistance at 1,402. Kingsford Securities sees support at 1,375 and resistance at 1,395.