RECAP: Asian stocks were on track for a fifth straight month of gains on Friday, bolstered by a growing view that cooling US inflation could prompt the Federal Reserve to ease interest rates this year, while the yen tumbled to a 38-year low against the dollar.
The Stock Exchange of Thailand moved in a tight range around its four-year low. While the announcement of measures to drive the capital market boosted trading early in the week, foreign investors continued to dump Thai shares.
The SET index moved in a range of 1,296.67 and 1,324.48 points this week, before closing on Friday at 1,300.96, down 0.4% from the previous week, with daily turnover averaging 45.7 billion baht.
Retail investors were net buyers of 5.27 billion baht, followed by institutional investors at 1.68 billion. Foreign investors were net sellers of 6.15 billion baht, followed by brokerage firms at 799.95 million.
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NEWSMAKERS: The yen dropped past 161 to the dollar, close to a 38-year low, on Friday morning despite Japanese authorities stepping up their warnings of possible intervention to stem the decline. They last intervened in April when the currency hit 160.
- The Chinese yuan slipped to a fresh seven-month low of 7.127 per dollar on Thursday and looked set for its sixth monthly decline in June.
- US first-quarter GDP growth was 1.4%, according to final figures released this week, higher than the second estimate of 1.3% but lower than the first estimate of 1.6%.
- The US composite purchasing managers' index in June was the highest in 26 months, boosted by new orders and increased employment. Business confidence also improved. But the consumer confidence index dipped to 100.4 from 101.3.
- Federal Reserve Bank of Atlanta president Raphael Bostic says he expects just one interest rate cut this year in the fourth quarter. Michelle Bowman, a member of the Federal Open Market Committee, said it is not yet time to cut rates, adding she is open to raising rates if inflation doesn't decrease.
- The US has announced sanctions against 12 executives of the Russia-based cybersecurity firm Kaspersky Lab, a day after banning the sale of its popular antivirus software on national security grounds.
- Canada is considering imposing import taxes on EVs from China and increasing investment requirements for Chinese companies in Canada due to concerns about unfair competition with the Canadian automotive industry.
- Chinese industrial profits in May grew 0.7% year-on-year, slowing from 4% in April, reflecting weakening domestic demand.
- India is expected to attract billions of dollars more inflows now that JPMorgan Chase has added its government bonds to its emerging markets index, opening up a $1.3-trillion market to a broader range of investors.
- FedEx shares surged by more than 13% after the shipping giant revealed an upbeat outlook and announced plans for a $2.5-billion share buyback.
- Major record labels Sony Music, Universal Music Group and Warner Records have sued the AI companies Suno and Udio, accusing them of mass copyright infringement by using their recordings to train music-generating AI systems.
- The Japanese beverage company Suntory has set up an Indian subsidiary to accelerate its business in the country, serving as both a production and export hub.
- The Stock Exchange of Thailand Index fell more than 5% in the second quarter, the sixth consecutive quarterly decline and the longest consecutive losing streak since Bloomberg began collecting data in 1987. Foreign funds have sold a net $3.16 billion baht in Thai shares since the year began.
- Ascend Money, the CP Group fintech affiliate that operates True Money, has secured an investment of $195 million from a subsidiary of Japan's Mitsubishi UFJ Financial Group to accelerate digital financial inclusion in Thailand.
- Robinhood, the commission-free application for food delivery, hotel booking and other services, will cease operations on July 31, Siam Commercial Bank announced. Operator Purple Ventures has run up losses of 5.5 billion baht since the business was launched four years ago.
- The Ministry of Finance is adjusting tax benefits for ThaiESG funds, allowing a deduction of up to 300,000 baht and cutting the holding period to five years from eight. The move is expected to attract 30 billion baht in new investment annually. It also plans to set up a new 500-billion-baht Vayupak Fund, with 150 billion to be raised from public investors.
- Thailand's manufacturing production index unexpectedly fell 1.54% in May from a year earlier due to lower car production and higher energy costs, the industry ministry said on Friday.
- The Federation of Thai Industries said vehicle production in May fell 16.2% from the year before to at 126,161 units, reflecting weaker local demand because of tighter lending conditions. Next month, it will review its full-year production target.
- Domestic tourism spending is expected to miss the government's target of 1.2 trillion baht as local tourists are concerned about the economy and high travel costs, according to the Tourism Authority of Thailand (TAT).
- Thai exports in May 2024 reached a 14-month high of $26 billion, bringing the five-month total to $120 billion, up 2.6% from a year ago. Growth is expected to continue in June and the second half.
- Collection of VAT of 7% on goods valued up to 1,500 baht will take effect on July 5. The move is intended to curb the flow of cheap imports hurting small Thai businesses.
- Energy authorities have extended the price cap for cooking gas of 423 baht per cylinder until the end of September, versus a market price of around 477 baht. The difference is subsidised by the Oil Fuel Fund, which has run up debts of 110 billion baht from fuel subsidies.
- The National Energy Policy Council has increased the diesel price subsidy to 2.02 baht a litre from 1.60 baht due to rising global oil prices, in order to keep pump prices below 33 baht a litre.
- The Ministry of Finance plans to discuss group debt solutions with state banks, including a 100-billion-baht soft loan programme to support low-interest loans.
- The Public Debt Management Office (PDMO) is preparing to sell 20 billion baht worth of sustainable bonds to institutional investors this year.
- The Federation of Thai Capital Market Organizations expects the economy to recover in second half, projecting GDP growth of 3% this year and above 3% in 2025.
- The cabinet approved the establishment of a board to oversee a Cloud First Policy, aiming to attract foreign investment and drive cloud usage by government agencies.
- The National Energy Policy Council has approved a pilot project to allow businesses to buy electricity directly from producers, a move intended to attract more investment by the energy-intensive data centre business. Direct purchases allow businesses to better manage their energy costs.
- Gulf Energy Development has announced plans to double the capacity of its data centre in Samut Prakan with an additional investment of 10 billion baht. A Gulf subsidiary is also partnering with Google for the cloud business in Thailand.
- The Ministry of Commerce reported a 16% increase in foreign business approvals during the first five months of 2024 to 317 from 273, with investment value up 58% to 72 billion baht from 26.3 billion baht.
- COMING UP: On Monday, Germany releases monthly inflation while the US and UK report manufacturing PMI. Tuesday brings a euro zone inflation update and a speech by Fed chairman Jerome Powell. On Wednesday, the US releases non-manufacturing prices, non-manufacturing and services PMI updates and weekly employment data. Japan reports household spending on Thursday and the US releases non-farm payrolls for June.
- Locally, the Marketing Association of Thailand will release an updated industry outlook updates. On Wednesday, the Joint Standing Committee on Commerce, Industry and Banking will have a press conference.
STOCKS TO WATCH: Trinity Securities says La Nina will reach its peak in the fourth quarter, with the prospect of gains for food processors and hydropower operators. Its picks are COCOCO, SAPPE, STGT, SCCC, TASCO, BCH, BBL, KTB, CKP, and TVO.
- Kasikorn Securities (KS) recommends a mix of stocks that have an upward profit trend with seasonal factors. For the third quarter, its investment portfolio consists of CKP, CPF, DELTA, OSP and SISB.
- CKP expects to benefit from La Niña, and the international school operator SISB will see strong new student enrolment numbers in the new academic year, it added.
- Asia Plus Securities suggests ESG stocks including SCC, CRC, PTTGC, BGRIM, BCP, AMATA, THCOM, STA, STGT, CKP, CPALL, KBANK and WHA.
TECHNICAL VIEW: Trinity Securities sees support at 1,270 points and resistance at 1,340. UOB Kay Hian sees support at 1,280 and resistance at 1,320.
