Recap: Foreign fund inflows turned to Asia after the European Central Bank hinted it might consider using stimulus measures to keep the euro zone recovery on track. The Thai stock market was a beneficiary but remains less attractive than its peers following months of political tensions.
The SET index rose but failed to breach 1,400 points as investors locked in profits ahead of a weekend red-shirt rally and Monday’s holiday. The main gauge moved in a range of 1,371.35 to 1,397.48 points before closing Friday at 1392.01, up 1.7% on the week, with average turnover of 30.41 billion baht a day.
Retail investors were net sellers of 13.20 billion baht, while foreign investors bought 5.17 billion, institutions 6.14 billion and brokers 1.88 billion baht.
Big movers: Golden Lime Plc (SUTHA), the country’s leading lime manufacturer, closed its first week on the SET with a 40.5% gain from its IPO price of 3.70 baht after its debut on Thursday. International Engineering (IEC) was the top gainer and led in trading volume, up 50% to 0.03 baht. Top loser Natural Park (N-PARK) fell 14.3% to 0.06 baht. The top three by rading value were BBL, up 5.97% to 186.50 baht; KBANK, up 5.7% to 184.5 baht; and SCB, up 3.8% to 162.5 baht.
Newsmakers: Dovish comments from US Federal Reserve chairwoman Janet Yellen have eased investor concerns about an earlier-than-expected increase in interest rates. She said the central bank’s commitment to stimulating the economy would be needed for some time to come.
China has announced a mini-stimulus programme, including tax breaks for small businesses and support measures for poor urban districts.
The Constitutional Court decided to consider a petition filed by 28 senators against caretaker PM Yingluck Shinawatra and her cabinet for the allegedly political removal of Thawil Pliensri as the National Security Council (NSC) chief. The Administrative Court ruled last month that there were no credible grounds for his transfer. If the court rules against Ms Yingluck, she and the cabinet must leave office. This has raised investors’ hopes that the political stalemate could end soon.
Ms Yingluck testified briefly before the National Anti-Corruption Commission (NACC), launching her defence against charges of negligence in relation to alleged corruption in the failed rice-pledging scheme.
Bank of Thailand Governor Prasarn Trairatvorakul warned of a risk of recession during the first two quarters, but said the economy was still expected to rebound in the latter half, as unemployment remains low and business are still operating normally.
The Japan Credit Rating Agency (JCR) became the first to downgrade Thailand’s outlook to negative from stable, warning that political turmoil could cripple the recovery, while a protracted crisis and rising current account deficit could weaken the foreign currency liquidity position.
The Consumer Confidence Index fell in March to the lowest level in 149 months, to 68.8 points from 69.9 in February. A score above 100 indicates rising confidence.
Siam Commercial Bank reported heavy demand for US$750 million in senior unsecured notes due in 2019, which were 6.4 times oversubscribed. The notes issued by SCB’s Cayman Islands branch carry a coupon of 3.5% and are rated A3 by Moody’s, BBB+ by S&P and BBB+ by Fitch.
Thai Oil (TOP) plans to raise $1.18 billion over the next two years for finance future investments.
The Erawan Group, a leading hotel developer, has budgeted 1.5 billion baht to open 25 Hop Inn hotels across the Kingdom through next year, a strategic move to focus more on the fast-growing lower-priced segment.
Major Cineplex Group is looking at the CLMV (Cambodia, Laos, Myanmar, and Vietnam) markets for expansion. In addition to Cambodia, where Major will open its first seven- to eight-screen cinema at a cost of 120 million baht in July, it will enter at least one other country this year.
Thailand’s soft drinks market fell by 7% year-on-year in the first quarter, the first significant drop in recent years, said Parinya Permpanich, marketing and sales director of Sermsuk Plc (SSC), the bottler of the Est brand.
RS Plc, which holds the local broadcasting rights to this year’s World Cup, insists it will move ahead with its rights management plan and sell World Cup set-top boxes next week after a court ruling in its favour.
Airports of Thailand is promoting its “airport city” plan covering Suvarnabhumi, Don Mueang and Phuket airports to strengthen long-term revenue growth. It hopes the plan will increase non-airport-service revenue, mainly retail-space rentals, to 60% from the current 40% of its total.
Coming up this week: The NACC will hear from three more witnesses testifying on behalf of Ms Yingluck, who is accused of dereliction of duty involving the rice-pledging scheme. They are Niwatthamrong Bunsongphaisan, a caretaker commerce minister; Yanyong Phuangrach, deputy commerce minister; and Kittiratt Na-Ranong, deputy prime minister and finance minister.
The green tea maker Ichitan Group will sell its IPO shares at 13 baht apiece from tomorrow until Friday.
On Thursday China will report trade data and loan growth for March and inflation data on Friday, while Singapore will report preliminary first-quarter GDP figures on Thursday.
Thai banks will report Q1 results on Friday to open the earnings season. Investors will be watching for signs of slipping loan growth.
Stocks to watch: Tisco Securities recommends stocks that could perform well in the first half this year such as MAJOR, CPALL and CPF.
Asia Plus Securities suggests investors shun locally focused plays in light of local political uncertainty but put money in globally focused stocks. Its top picks are STPI and IRPC.
Technical view: Asia Plus sees support at 1,380 and resistance at 1,416. Tisco Securities sees support at 1,380 with resistance at 1,400 and 1,433.