RECAP: Asian stocks retreated on Friday, tracking tech-led declines on Wall Street after hotter-than-expected US inflation weakened the case for imminent interest rate cuts by the Federal Reserve.
Thai shares moved in a range of 1,374.69 and 1,395.88 points this week, before closing yesterday at 1,386.04 points, unchanged from the previous week, with daily turnover averaging 45.05 billion baht.
Foreign investors were net buyers of 2.17 billion baht. Institutional investors were net sellers of 1.79 billion baht, followed by retail investors at 208.65 million and brokerage firms at 178.26 million.
NEWSMAKERS: The US producer price index rose 1.6% year-on-year in February from a year earlier, the largest advance since September, signalling persistent inflation. The consumer price index also recorded an unexpected uptick to 3.2%, from 3.1% in January. The data raised concerns that the Fed may delay plans to start cutting interest rates.
- The Federal Open Market Committee is widely expected to keep rates on hold when it meets on Tuesday and Wednesday. Markets are currently pricing in a 60% chance of the Fed cutting rates in its June meeting, down from 74% earlier, according to the CME FedWatch Tool.
- US retail sales rebounded by less than expected, growing just 0.6% year-on-year in February, suggesting a slowdown in consumer spending amid rising inflation and high borrowing costs.
- Crude oil prices surged 3% to a four-month high on Wednesday after the US Energy Information Administration revised up its 2024 global oil demand growth projection to 1.3 million barrels per day, up by 110,000 from an earlier forecast.
- Bitcoin extended its retreat yesterday to around $68,400, after hitting a fresh all-time high of $73,664 on Wednesday, as the debate intensified about whether the bull run in cryptocurrencies is evidence of speculative froth in global markets.
- Gold remains close to record levels above $2,100 an ounce but was on pace for its first weekly drop in four weeks, as US inflation figures caused traders to rethink how swiftly and deeply the Fed could cut rates.
- The UK economy rebounded in January, registering modest growth after falling into a technical recession in the second half of last year. GDP rose 0.2% following a 0.1% decline in December.
- Japan's economy is no longer in deflation, and a strong trend of wage hikes is taking place, Finance Minister Shunichi Suzuki said yesterday. The country's largest trade union confederation, Rengo, is seeking pay rises of 5.85% this year, topping 5% for the first time in 30 years.
- Bank of Japan Governor Kazuo Ueda said the economy was recovering but was still showing some signs of weakness. The remarks came ahead of a policy meeting next week at which the BoJ will debate whether the outlook is bright enough to start phasing out its massive monetary stimulus.
- The US House of Representatives has passed a bill that would require the TikTok owner ByteDance to sell the popular social media platform within 6 months or face a total ban in the US on security grounds. China said it would use all necessary measures to protect the interests of Chinese companies.
- Chinese state-backed funds have suspended purchases of exchange-traded funds (ETFs) after spending over US$50 billion in the past five months.
- Dai-ichi Life Holdings is buying a minority stake in the US alternative investment manager Canyon Partners. The Japanese company will invest $255 million for a 19.9% stake.
- Nissan Motor and Honda Motor are assessing a cooperation agreement on EV production in a bid to cut costs and improve competitiveness, with an announcement expected soon, sources familiar with the matter said yesterday.
- The Hong Kong carrier Cathay Pacific on Wednesday reported its first annual net profit in four years, citing a surge in demand as it emerges from the impact of Covid isolation. Operating profit of US$1.9 billion was the highest on record, it added.
- Country Garden Holdings missed a coupon payment on a yuan bond for the first time, adding to the woes of the Chinese developer that is facing a lawsuit seeking its liquidation offshore.
- China's new home prices dropped for an eighth straight month in February, falling 1.4% year-on-year, faster than the 0.7% drop in January and the biggest decline in 13 months.
- The e-commerce giant Alibaba plans to invest over $1 billion in South Korea in the next three years. It also plans to build a $200-million distribution centre there this year.
- The Japanese manufacturer Toppan Holdings has broken ground for a $450-million semiconductor packaging materials plant in Singapore, with production to begin at the end of 2026.
- Several Chinese wheat importers have cancelled or postponed orders from Australia totaling 1 million tonnes, with higher global wheat supplies pushing prices down.
- El Salvador eliminated income tax on investment from overseas and remittances as leader Nayib Bukele seeks to attract capital and wealthy foreigners to the Central American nation.
- The US is ready to renew the Generalized System of Preferences (GSP) scheme of tariff breaks for Thailand that expired in 2020, Commerce Minister Phumtham Wechayachai said on Wednesday following a meeting with US Secretary of Commerce Gina Raimondo.
- Thailand is a top priority for US multinational firms looking to diversify supply chains, and they are ready to "supercharge" investments into the country, Ms Raimondo said.
- Italian-Thai Development has confirmed reports that it is in talks with banks for new loans to ride out a liquidity crisis that led to delayed payments to some workers and contractors. The company said it had total liabilities of 108 billion baht including bonds, loans and trade credit as of Sept 30.
- The Securities and Exchange Commission is watching high-risk bonds. It will require issuers to disclose more data at the offering stage and to report financial statements every six months. It is preparing to hold public hearings to build confidence after an upturn in defaults.
- The Thai Bankers' Association had introduced measures to address chronic debt issues, focusing on assisting individual borrowers with revolving credit, aiming to clear debts within five years with an interest rate capped at 15%, effective from April 1.
- Central Pattana Plc (CPN), the operator of Central shopping centres, plans to invest 121 billion baht over five years for store renovation and to open two new projects as customer purchasing power increases and foreign tourist arrivals grow.
- SCB EIC, the research arm of Siam Commercial Bank, expects the Bank of Thailand to start cutting its policy rate at its April 10 meeting because of structural economic problems. It forecasts the Monetary Policy Committee will reduce the policy rate by 50 basis points before the first half is out.
- The public this week bought government savings bonds worth 35 billion baht, with the portion sold through the Pao Tang mobile app of Krungthai Bank selling out within seconds.
- The Federation of Thai Industries (FTI) is conducting a study of a plan to set standards for renewable resources that can be turned into sustainable aviation fuel.
- Energy Absolute Plc (EA), a renewable energy and electric vehicle (EV) developer and operator, is preparing to expand its power business again after halting new projects to increase generating capacity since 2019.
- Foreign tourists are seeking to extend their stays in April as the government is lengthening Songkran festivities this year to 21 days, according to the online travel agent Klook.
- The Songkran festival is expected to generate 24.4 billion baht during the five-day holiday, drawing 510,000 foreign travellers and 4.29 million domestic trips, according to the Tourism Authority of Thailand.
COMING UP: The euro zone will report updated inflation and trade data on Monday, and Japan will reports monthly industrial production. On Tuesday, the Bank of Japan and Reserve Bank of Australia will hold policy meetings and the People's Bank of China will announce its loan prime rate. On Wednesday the US Federal Reserve will release its rate decision and outlook. Due the same day are UK consumer and producer prices and New Zealand GDP.
- On Thursday, Britain and Switzerland will announce interest rate decisions and the US will update existing home sales. On Friday, Britain reports monthly retail sales and Russia announces a rate decision.
- Locally, Gulf Binance on Tuesday will hold its Digital Asset Forum, with Binance chief executive Richard Teng discussing the future of the digital asset business.
STOCKS TO WATCH: Yuanta Securities expects the SET index will respond positively to final consideration of the fiscal 2024 budget in the House and Senate this month, with disbursements expected to be accelerated shortly to stimulate economic growth. That will boost construction, building materials, banks, power plants, communications, retail and finance stocks.
- Yuanta also recommends stocks with good performance and ESG ratings, among them CK, SCC, SCB, GULF, THCOM, SYMC, BE8, CPALL, BJC, OSP and SAWAD.
- InnovestX Securities recommends selective buys in three main themes: speculative stocks with strong fundamentals being bought back to cover shorts and bringing in fund inflows. Beneficiaries from plans to better regulate short selling will include AOT, KBANK, BBL and PTT.
- The second group is small-cap speculative stocks with strong fundamentals and a good growth outlook, for which prices have already bottomed. They include AU, ONEE, SECURE, KLINIQ and HTC.
- The third theme involves stocks recommended for dollar-cost averaging as the SET has fallen significantly, risks are low and stocks are undervalued. Top picks are BBL, BDMS, BEM, CPALL, PTT and SCC.
TECHNICAL VIEW: DBS Vickers Securities sees support at 1,360 points and resistance at 1,405. InnovestX Securities sees support at 1,380 and resistance at 1,410.