Asian equities track Wall Street higher

RECAP: Asian shares tracked Wall Street futures higher on Friday as Amazon.com provided welcome earnings relief, while Treasury yields fell on signs of easing inflation, underscoring expectations that the US central bank is done raising rates.

Thai shares moved in a range of 1,366.19 and 1,414.13 points this week before closing on Friday at 1,388.23, down 0.8% from the previous week, with daily turnover averaging 43.88 billion baht.

Institutional investors were net buyers of 3.09 billion baht, followed by retail investors at 1.78 billion. Foreign investors were net sellers of 3.93 billion baht, followed by brokers at 944.50 million.

NEWSMAKERS: The US economy expanded in the third quarter by 4.9% year-on-year, the strongest showing since late 2021, as a strong job market and falling inflation gave consumers the confidence to spend.

• The US composite purchasing managers' index (PMI) rose to a three-month high of 51.0 in October, while composite PMI in the euro zone, Germany and the UK fell below 50, indicating business contraction.
• Euro zone inflation "dropped markedly" to 4.3% in September but is still expected to remain "too high for too long", the European Central Bank said, as it held interest rates steady.
• The Japanese yen weakened on Thursday to a fresh one-year low of 150.78 per dollar and was not far off the 32-year low of 151.94 it touched in October last year, which led to Japanese authorities intervening in the market.
• Japanese Prime Minister Fumio Kishida said the government hopes to announce measures, possibly including income-tax cuts, to cushion the economic blow from rising inflation on Nov 2.
• Bitcoin has jumped on bets that the first US exchange-traded funds investing directly in the token could soon be approved. The largest digital asset is up 16% this week and at one point topped $35,000 for the first time since 2022.
• The US oil major Chevron has bought Hess Corp, an oil and gas producer and competitor, for $53 billion.
• US-based Western Digital and Kioxia Holdings of Japan have called off merger talks after failing to agree on terms of a deal that would have created one of the world's largest memory chip makers.
• Honda and General Motors are reportedly abandoning their plan to jointly develop a line of affordable electric vehicles priced below $30,000.
• The Chrysler parent company Stellantis plans to spend 1.5 billion euros ($1.6 billion) to acquire a 21% stake in the Chinese EV startup Leapmotor.
• China-based Gotion High-Tech, the biggest investor in Volkswagen Group, has announced plans for a $2.4-billion battery plant in Michigan.
• The Japanese automotive supplier Denso plans to invest about ¥500 billion ($3.3 billion) in semiconductors by 2030, with the goal of tripling the size of its chip business by 2035.
• The Singaporean multi-currency digital wallet YouTrip is planning to enter the Malaysian market to as it seeks to tap into growing travel and business demand in Southeast Asia.
• The Chinese government on Tuesday announced a 1-trillion-yuan ($137 billion) sovereign bond issue to strengthen an economic recovery that has sputtered this year.
• China saw the largest monthly capital outflow in more than seven years last month, piling extra pressure on the yuan, Goldman Sachs said. Net outflows climbed to $75 billion in September, up almost 80% from August.
• China's industrial profits grew by 11.9% in September from a year earlier, easing from a 17.2% surge in August, which was the first expansion in more than a year. For the first nine months, profits are still down 9% year-on-year.
• Capital A Bhd, the parent of AirAsia, plans to raise more than $1 billion in debt and equity. CEO Tony Fernandes has agreed to a deal with Aetherium Acquisition, a special purpose acquisition company, and plans to list several businesses through it next year.
• The Philippine central bank on Thursday raised its benchmark interest rate by 25 basis points as it warned inflation would stay above its target until mid-2024.
• Paetongtarn Shinawatra, daughter of former premier Thaksin, was elected as the new leader of the Pheu Thai Party yesterday, cementing her family's grip on power.
• The Ministry of Finance yesterday cut its 2023 economic growth forecast to 2.7% from 3.5% earlier, due to weaker exports and lower government consumption. But it sees higher growth of 3.2%, adding the projection has yet to price in the effect of the government's planned digital wallet handout scheme.
• A committee studying the digital wallet says its debut will be postponed from Feb 1 to April or May, or possibly beyond, as time is needed to work out funding and system security details.
• The digital wallet programme might also be scaled back to reduce the cost from the original 560 billion baht. Funds might be given only to 16 million welfare card holders, while excluding those with monthly incomes above 25,000 or 50,000 baht or deposits of 100,000 to 500,000 baht.
• The Ministry of Finance said the cost of the government loan portfolio now tops 3%, up from 2.6% in August, with national debt reaching 11.03 trillion baht, or 61.8% of GDP, above the 60% level that authorities consider acceptable.
• The SET is opening a public hearing on extending trading to five hours per day, by closing the morning session 30 minutes later than now and opening the afternoon session 30 minutes earlier.
• The Ministry of Finance is considering issuing bonds in international markets to establish a benchmark and to attract foreign investors, marking a significant departure from three decades of policy.
• The country's six largest banks booked marginal loan growth of 0.71% in the first nine months of 2023 as credit expansion was slow among SMEs and household debt kept rising.
• The industrial estate developer WHA has sold 250 rai of land to China-based Shangan Auto, which plans to build the first phase of an EV plant worth 8.86 billion baht.
• Lazada Thailand is making its largest investment in Southeast Asia on a new sorting facility, preparing for e-commerce growth expected to reach $32 billion by 2025.
• The National Broadcasting and Telecommunications Commission (NBTC) plans to rule on Nov 10 on the proposed takeover deal of Triple T Broadband by Advanced Info Service.
• Sugar prices will be raised by 4 baht per klogramme this month as production costs are up 2 baht/kg, with a contribution to the Cane and Sugar Fund of 2 baht.
• The cabinet on Tuesday will review a proposal to cut the price of gasoline 91 by 2.50 baht a litre for three months. It is expected to take effect immediately if approved.
• The Federation of Thai Industries (FTI) said vehicle exports in September totalled 97,476 units, down 2.9% year on year but up 11.3% from the month before. It has cut its 2023 production target to 1.85 million units and export target to 800,000 units.
• The FTI says the industrial confidence index in September declined for the third month, to 90, due to weak purchasing power and a weak baht.
• The Ministry of Commerce reported export growth in September of 2.1% year-on-year, the second month of growth, and expects a solid fourth quarter to produce a positive full-year figure.
• The media agency MI group expects advertising budgets to slow by the end of the year amid negative factors at home and abroad. Media spending in 2023 is forecast to reach 85 billion baht, representing growth of 4.4% from 2022. In the next few years, it said, digital media may surpass TV for the first time.
• The business travel market is expected to recover with 23.2 million travellers in fiscal 2024, but it won't return to the levels of pre-pandemic 2019 until 2025 or 2026 due to global economic uncertainty, says the Thailand Convention and Exhibition Bureau.

COMING UP: On Monday, the US will release the October industrial production index. The Bank of Japan will hold its monetary policy meeting on Monday and Tuesday. China will report August manufacturing and services PMI on Tuesday. Due the same day are euro zone third-quarter GDP and September inflation. Also on Tuesday, the US will report August home prices and September consumer confidence.

• On the local front, the Bank of Thailand on Tuesday will report October economic figures and the Office of Industrial Economics will release its industrial confidence index.

STOCKS TO WATCH: InnovestX Securities recommends speculative stocks that could benefit from oil prices if they rise or stay at current high levels amid tensions in the Middle East. Stock picks are BCP, PTTEP and TOP.

• For undervalued stocks whose prices have fallen into the oversold zone, with strong fundamentals and inexpensive valuations, the brokerage recommends BDMS, CPALL, CPN and MINT.
• Asia Plus Securities recommends anti-commodity stocks, namely TASCO, GPSC, GULF and BGRIM; those based on the Chinese economy, PTTGC and SCGP; and contractors.
• For the medium to long term, now is considered a good opportunity to gradually accumulate good fundamental stocks as Thai listed companies have cheap valuations. Asia Plus recommends buying and holding LH, AP, GULF, MAJOR, CRC, CPALL, BEM, PLANB, CK, MINT, PTTGC and SCGP.

TECHNICAL VIEW: Asia Plus Securities sees support at 1,350 points and resistance at 1,420. CGS CIMB sees support at 1,370 and resistance at 1,414.