RECAP: Trade was subdued in most Asian stock markets yesterday while the dollar rebounded from one-year lows, as investors were cautious ahead of a major speech by US Federal Reserve chairman Jerome Powell.
Thai shares recorded their biggest weekly gain of the year, a day after former prime minister Thaksin Shinawatra laid out his vision for the economy and the government now headed by his daughter, in front of 1,400 business leaders.
The SET index moved in a range of 1,302.97 and 1,355.52 points this week, before closing yesterday at 1,354.87, up 4% from the previous week, with daily turnover averaging 55.05 billion baht. The previous biggest weekly advance was 1.6%, in the week ending July 12.
Retail investors were net buyers of 5.53 billion baht, followed by institutional investors at 3.95 billion. Foreign investors were net sellers of 8.79 billion baht, followed by brokerage firms at 695.21 million.
NEWSMAKERS: The US dollar traded near its lowest level in more than a year against the euro and sterling on Thursday as a dovish Federal Reserve and fresh signs of weakness in the US job market backed the case for interest rate cuts next month.
- Minutes of the last Fed meeting released on Wednesday indicated the "vast majority" of members believe it would be appropriate to cut rates at the Sept 17-18 meeting if data aligns with expectations.
- The Malaysian low-cost airline AirAsia said it had raised $443 million in a dual-tranche financing to refurbish planes that were grounded during the pandemic and refinance leases.
- A rapid depreciation of Myanmar's currency is pushing up prices of essentials, crippling households in a country wracked by civil war and a crumbling economy. The kyat plunged to a low of 7,500 to the dollar on the black market last week from 5,000 earlier in the month, traders say.
- The People's Bank of China left benchmark lending rates unchanged on Tuesday with the one-year prime rate staying at 3.35% and the five-year rate, a reference for long-term credit including mortgages, at 3.85%.
- Japan recorded a trade deficit of $4.3 billion in July as exports rose less than expected by 10% to $66 billion while imports grew 17% to $70.6 billion.
- Nippon Steel and JFE Holdings will invest $1.08 billion in a coal mine in Australia to secure a stable supply of coking coal for steelmaking over the long term.
- The number of foreign visitors to Japan totalled 3.29 million in July, up 42% from a year earlier and hitting a record high for a single month, boosted by the weak yen.
- Foreign visitor arrivals to China soared 123% year-on-year to 17.25 million in the first seven months of 2024, thanks to relaxed visa policies, the government said.
- Seven & i Holdings, the 7-Eleven operator in Japan, has received a preliminary takeover bid from Alimentation Couche-Tard, a Canadian retail giant, in a deal that would create one of the world's largest retail groups. The value of the deal was not disclosed.
- South Korea's central bank kept interest rates unchanged at 3.50% on Thursday but signalled it was ready to start easing policy as price pressures and growth eased, raising expectations for a rate cut in October.
- The Chinese fast-fashion giant Shein is suing rival Temu, alleging the online retailer stole its designs and built an empire using counterfeiting, intellectual property infringement and fraud.
- The Bank of Thailand on Wednesday left its benchmark interest rate unchanged at a decade high of 2.50% for a fifth straight meeting, as policymakers await clarity about the new government's agenda.
- The baht is on course to appreciate to 34 to the dollar or even stronger in the near term after hitting a 13-month high this week. The BoT said movement was consistent with global and regional currencies and the weakening dollar.
- Revisions to the government's digital wallet handout are expected once the new cabinet is formed. Former PM Thaksin Shinawatra indicated the government of his daughter Paetongtarn plans to distribute 10,000 baht each to "vulnerable" people in September, with a budget of 145 billion baht, to stimulate the economy. He said it would look at ways to use the 2025 fiscal budget to give handouts to 30 million people after October.
- The Thai economy in the second quarter expanded by 2.3%, driven by private and government consumption and exports, while investment fell 6.2%, the National Economic and Social Development Council said. It adjusted its full-year GDP forecast to 2.3-2.8%.
- The SET-listed real estate developer Sansiri announced on Wednesday the planned sale of its hotel unit Standard International to the global hospitality company Hyatt for $355 million.
- Changan Automobile's first electric vehicle manufacturing plant in Southeast Asia will open in Thailand in the first quarter of next year, with a total investment exceeding 10 billion baht, a subsidiary of the Chinese firm said on Thursday.
- The Vietnamese EV maker VinFast Auto is postponing the opening of its Thailand dealership network amid a broad slowdown in passenger car sales locally.
- The industrial confidence index in July increased for the first time in four months alongside domestic consumption. The Federation of Thai Industries said accelerated budget disbursement had put more money into the system, benefiting industrial goods and construction materials.
- The Real Estate Information Center (REIC) said the confidence index for housing demand in Bangkok and environs grew slightly to 39.6 in the second quarter, reflecting low demand while stimulus measures have not significantly boosted recovery.
COMING UP: On Monday, the US will release monthly durable goods orders and Germany will report business expectations. Tuesday will bring a US consumer confidence update. Russia will announce GDP data on Wednesday, followed by a US GDP update on Thursday, along with German inflation and Japanese industrial production. Friday brings updates in euro zone inflation, UK house prices, German unemployment and US PMI readings.
- Locally, market regulators on Monday will sign an agreement to prevent and suppress securities trading crimes, and the NESDC will report on domestic social conditions. The SET will hold its annual Thailand Focus investment seminar on Wednesday.
STOCKS TO WATCH: CGS International Securities expects foreign investors to return to Thai stocks as domestic political risk has eased, saying several stocks with good fundamentals are available at low prices.
- Investors are expected to shift from defensive and external exposure stocks to focus on domestic plays and groups that have significantly underperformed the market but still have good fundamentals. Top picks are AMATA, BBL, BCH, CBG, CPALL, CRC, KLINIQ and PTTEP.
- Bualuang Securities says the SET has potential upside of around 5% by year-end, supported by foreign inflows amid political stability and Fed rate-cut optimism. Companies expected to see profit estimates adjusted upwards include CPAXT and CPALL, thanks to government consumption stimulus. WHA is on course to gain from a 10-20% year on year increase of land prices. BH has upside from rising foreign patients, and CBG's market share continues to increase.
TECHNICAL VIEW: UOB Kay Hian Securities sees support at 1,300 points and resistance at 1,360. Krungthai XSpring Securities sees support at 1,317 and resistance at 1,375.