RECAP: Hong Kong led the charge as most Asian markets posted gains yesterday, shrugging off Wall Street losses ahead of US employment data due later in the day.
The Thai stock market underperformed regional peers, losing 1% yesterday amid continuing concerns about the weak baht and heavy government spending. For the week, the SET Index moved in a range of 1,429.99 and 1,478.01 points, before closing yesterday at 1,438.45, down 2.2% from the previous week, with daily turnover averaging 45.46 billion baht.
Retail investors were the net buyers of 5.82 billion baht, followed by institutions at 2.81 billion. Foreign investors were net sellers of 7.22 billion baht, followed by brokers at 1.42 billion
NEWSMAKERS: The US 10-year Treasury yield surged to a fresh 16-year high of 4.766% this week amid investor worries that the Federal Reserve will hold interest rates higher for longer after job openings unexpectedly increased in August.
- US job openings rose to 9.6 million in August, up nearly 800,000 from July. The August figure translates to 1.5 job openings for every unemployed person. However, a preliminary estimate of non-farm employment showed growth of 89,000 positions in September, lower than expected.
- US companies announced 47,457 job cuts in September, down 37% from August, but 58% higher compared to the same period last year, according to a report from the global outplacement firm Challenger, Gray & Christmas.
- US core personal consumption expenditure, which excludes food and energy and is the Fed's preferred inflation indicator, grew by an annualised 3.9% in August, a two-year low, and down from 4.3% in July.
- The US Congress passed a short-term funding measure after the usual political theatrics, making it possible to avoid a government shutdown for 45 days.
- Indonesia's central bank has intervened in the foreign-exchange market to manage the supply and demand of US dollars amid market turbulence that has sent the rupiah to its weakest since January, an official told Reuters.
- Gold prices held steady around $1,830 an ounce on Thursday after falling for eight consecutive days as US bond yields and the dollar retreated from recent highs on US labour market weakness.
- The World Trade Organization cut its global trade growth forecast for 2023 to 0.8% from 1.7%, reflecting the effect of high interest rates that have hurt purchasing power in the US, Europe and Asia.
- Wheat futures prices declined by 6% to a three-year low as the US issued a higher-than-expected forecast for the coming harvest.
- Efforts to finalise a pact that ended strikes at Chevron's two liquefied natural gas (LNG) plants in Australia faltered on Thursday, as workers voted to restart stoppages after accusing the company of reneging on commitments. Australia accounts for 7% of global LNG supply.
- The EU manufacturing purchasing managers' index (PMI) fell in September from August, indicating activity is still on a downward trend.
- Euro zone retail sales in August dropped 2.1% year-on-year, more than expected, as high inflation eroded purchasing power.
- The Opec+ alliance voted to keep oil production unchanged, meaning a total production cut of 3.66 million barrels per day will remain in effect until the end of the year and possibly beyond in order to support prices.
- Global oil supply is expected to increase as Turkey plans to reopen an oil pipeline from Iraq after closing it for six months. The energy consultancy Rapidan Group says Saudi Arabia will increase oil production after Brent price goes above $90 per barrel.
- Tokyo stocks rebounded sharply Thursday, snapping a five-day losing streak on bargain-hunting, with sentiment lifted by advances in US and other Asian markets. The yen weakened slightly to 149 per dollar.
- Real wages in Japan in August fell 2.5% year-on-year, the 17th straight month of declines, as persistent price hikes continued to outpace salaries.
- Consumer spending in Japan fell 2.5% year-on-year in August, down for a sixth consecutive month. Household purchasing power shrank even as major companies offered their biggest pay increases in three decades.
- Tesla reported car production of 430,000 units in the third quarter, down from 480,000 in the previous quarter, while deliveries declined to 440,000 from 470,000 due to the closure of a factory for renovation.
- The Japanese mobile carrier NTT Docomo is preparing to acquire 49% of the online brokerage firm Monex Inc for ¥48.5 billion to strengthen its revenue base.
- The Taiwan Ministry of Economic Affairs said it would investigate whether Taiwanese firms helping Huawei Technologies with chipmaking plants in China violated US sanctions.
- Indonesia launched Southeast Asia's first high-speed railway on Monday, a delayed, multibillion-dollar project backed by China. With a top speed of 350 kilometres per hour, the Whoosh bullet train can travel the 140km from Jakarta to Bandung in 45 minutes.
- The Vietnamese electric car maker VinFast Auto is planning to invest up to $200 million to set up assembly units in India and Indonesia with production expected to start by 2026.
- Vietnam has accused the property developer Van Thinh Phat of cheating 42,000 investors in a bond scam worth $1.2 billion.
- TikTok shut down its Shop feature in Indonesia on Wednesday after the country banned commerce on social media platforms to protect local business owners.
- Prime Minister Srettha Thavisin is asking the Stock Exchange of Thailand to study extending stock market opening hours to increase trading volume, suggesting it hold public hearings with market participants.
- The Energy Regulatory Commission has cut the electricity price to 3.99 baht per unit, from 4.45 baht, until the end of this year. Electricity bills paid in September will be discounted in the October bill. Officials have yet to work out how to help the Electricity Generating Authority of Thailand, which has subsidised power tariffs to the tune of 135 billion baht so far.
- The World Bank has cut its 2023 Thai GDP forecast from 3.6% to 3.4%, and 2024 from 3.7% to 3.5% due to the export slowdown and concerns that higher public debt will pressure public and private investment.
- The Bank of Thailand said the baht is down by nearly 7% this year due to external factors, mainly the relentless rise of the dollar, as there is a chance the Federal Reserve will keep interest rates higher for longer while the US economy has outperformed those of other countries.
- The Thai National Shippers' Council has adjusted its 2023 export forecast to a contraction of 1% to 1.5%.
- The Energy Ministry has asked the Ministry of Commerce to keep all oil product marketing margins to no higher than 2 baht a litre, compared to the current gasoline marketing margin of 3-4 baht.
- The Oil Fuel Fund is expected to run a deficit of 100 billion baht as a result of keeping diesel prices below 30 baht a litre until the end of this year.
- Inflation in September rose 0.33% year-on-year, slowing from 0.88% in August. The Ministry of Commerce has adjusted its 2023 inflation forecast to a range of 1% to 1.7%, down from 1-2% earlier.
- Thai Beverage Plc has announced it will expand manufacturing operations across Southeast Asia with a three-year investment plan worth 7 billion baht.
- The Thai Rice Exporters Association expects 2023 exports to reach 8 million tonnes, below the target of 8.5 million. The 2024 target is 7 million to 7.5 million tonnes.
COMING UP: On Monday, the US will report small business confidence and wholesale inventories, followed on Tuesday by September producer prices and the minutes of the last Fed meeting. Locally, the new secretary-general of the Securities and Exchange Commission will meet the media on Tuesday. On Wednesday, the Bank of Thailand will release the minutes of its Sept 27 meeting.
STOCKS TO WATCH: InnovestX Securities suggests accumulating oversold stocks with good fundamentals and inexpensive valuations, thus poised for a rebound, such as CPALL, TOP, CPN, BDMS and MINT.
- Shares of BH could be attractive as oil prices rose 10% in the third quarter, bringing more petrodollars to the Middle East, which could translate to more international patients for Thai hospitals. Oil stocks in general look attractive as prices stabilise at a high level, namely PTTEP and BCP, but be cautious if Brent exceeds $100 a barrel.
- Tisco Securities recommends BBL, BEM, CENTEL, COM7, CPALL, RBF, SPA and TOP. The top 5 from the Investment Analysts' Association survey are ADVANC, AOT, BDMS, CPALL and TOP.
- Tisco also recommends SET100 stocks that have been oversold and should rebound, namely BAM, BGRIM, OSP, PLANB, SCB and SIRI. It also recommends stocks that benefit from short-term government stimulus. This group includes CPALL, CPAXT, CRC, COM7, MTC, BA, BEM, DMT, CENTEL, MINT and SPA. Beneficiaries of baht depreciation include CPF, MEGA, TU, SICT and XO, while global and China plays are PTT, PTTEP, TOP, SCGP and HANA.
TECHNICAL VIEW: InnovestX Securities sees support at 1,430 points and resistance at 1,470. Finansia Syrus Securities sees support at 1,420 and resistance at 1,460.