RECAP: Asian stocks rallied on Friday as traders flocked back into risk assets after robust US jobs and retail sales data eased recession concerns.
The Thai index rebounded above 1,300 points after Paetongtarn Shinawatra was endorsed as the new prime minister, two days after the Constitutional Court disqualified Srettha Thavisin from office.
The SET index moved in a range of 1,279.34 and 1,306.88 points this week, before closing yesterday at 1,303.00, up 0.5% from the previous week, with daily turnover averaging 40.38 billion baht.
Brokerage firms were net buyers of 1.72 billion baht, followed by retail investors at 1.17 billion and foreign investors at 95.22 million. Institutional investors were net sellers of 2.98 billion baht.
NEWSMAKERS: US consumer inflation in July rose 2.9% year-on-year, the lowest since March 2021 and below market expectations. The Producer Price Index rose 2.2%, also below forecasts, leading to optimism that the Federal Reserve could cut its policy rate by a half percentage point in September.
- US retail sales in July grew 1% from June, a stronger performance than expected. Initial jobless claims were below forecasts, suggesting an "orderly" slowdown in the labour market, which could persuade the Fed that a rate cut of 25 basis points would be sufficient.
- China's first contraction in bank loans in nearly two decades has fanned fears that the economy is heading for a "balance sheet recession" as Japan did decades ago. A plunge in new corporate borrowing, combined with households preferring to repay debt, resulted in bank loans shrinking last month.
- MSCI continues to drop China shares from its indices, setting the stage for a further decline in the country's share of a key emerging-market equity benchmark. The index provider said it would remove 60 stocks from the MSCI China Index this month, following 56 deletions in May and 66 in February.
- The International Energy Agency predicts an oil market surplus next year due to increased production in the North America, Brazil and Guyana, despite production cuts by Opec and its allies.
- Chinese consumer inflation in July rose 0.5% year-on-year, the strongest rise since February, primarily driven by a surge in pork prices. Producer prices contracted 0.8% due to falling construction material prices.
- China said steel production in July decreased by 9% year-on-year to 82.94 million tonnes, reflecting sluggish demand forcing significant production cuts in the industry.
- Sea Ltd, the parent of Shopee, reported second-quarter earnings that topped analysts' estimates, after it continued to attract online shoppers. Sales also beat projections, rising 23% to $3.8 billion.
- Apple supplier Foxconn reported a 6% rise in second-quarter net profit, driven by strong AI server demand.
- Malaysia's economy in the second quarter expanded by 5.9% year-on-year, up from 4.2% in the first quarter, helped by stronger household spending, exports and investment.
- The Philippines' central bank has cut interest rates for the first time in almost four years, to 6.25%, as policymakers look to preserve economic growth momentum.
- The Reserve Bank of New Zealand cut its benchmark interest rate by 25 basis points, the first cut in four years, to 5.25%, and flagged more cuts over coming months.
- Japan's GDP expanded at an annualised pace of 3.1% in the second quarter, well above the 2.3% consensus estimate, after a 2.3% contraction in the first quarter.
- Euro zone second-quarter GDP rose 0.3%, meeting market expectations. UK GDP rose 0.6% in the second quarter after a gain of 0.7% in the first three months.
- Huawei is preparing to launch its self-developed AI chip, the Ascend 910C, to compete with Nvidia's H100, starting in October, the Wall Street Journal reported.
- The Chinese e-commerce giant Alibaba reported a 29% fall in quarterly profit in the three months to June as it battles sluggish consumption.
- Paetongtarn Shinawatra, the daughter of former premier Thaksin Shinawatra, won a vote on Friday to become Thailand's 31st prime minister, two days after the Constitutional Court disqualified Srettha Thavisin over an ethical violation.
- The exit of Mr Srettha means a new cabinet must also be formed, and some observers believe the 10,000-baht digital wallet stimulus could be in danger. But Julapun Amornvivat, the caretaker deputy finance minister, insists the Pheu Thai Party remains committed to fighting for its flagship economic plan.
- The Ministry of Finance said it would proceed with selling Vayupak Fund 1 units to general investors as per the original plan approved by the former cabinet. The investment value is 100-150 billion baht, with an initial allocation of 30% to retail investors at a unit price of 10 baht.
- The industrial sentiment index rose for the first time in four months, to 89.3 in July from 87.2 in June, due to higher domestic demand, budget spending and tourism.
- Thai food exports in the first six months reached 852 billion baht, a 9.9% increase, led by growing demand for Thai products in the global market and the softening of many key raw material costs. The National Food Institute has predicted 8.8% full-year growth to 1.6 trillion baht.
- Most SET-listed real estate companies reported declining profits in the first half as decreased purchasing power, high household debt and interest rates, as well as the slow economic recovery, hurt sentiment for home purchases.
- The hybrid electric vehicle (HEV) market in Thailand is expected to intensify as automakers announce investment plans, with the Chinese-Thai joint venture SAIC Motor-CP and MG Sales (Thailand) unveiling plans to produce HEVs under the MG brand in Chon Buri by 2025.
COMING UP: On Monday, the People's Bank of China will announce the five-year loan prime rate. Tuesday will bring euro zone and Canadian consumer inflation updates and Japanese trade figures. On Wednesday, the US will release crude oil inventory update and Federal Open Market Committee meeting minutes, and Japan will report services PMI. On Thursday, the US will report manufacturing PMI and existing home sales, and Japan will release an inflation update. Friday will bring US new home sales data and Singapore inflation.
- Locally, the National Economic and Social Development Council will release official second-quarter GDP figures and discuss the economic outlook for the second half.
STOCKS TO WATCH: Yuanta Securities recommends growth stocks that provide consistent dividends because they help improve market stability. Large-cap stocks with good dividends and high ESG ratings are worth looking at ahead of the listing of the new Vayupak Fund. Top picks are ADVANC, CPALL, KTB, PTT, SCB and SCC.
- Thanachart Securities recommends investors focus on stocks with good fundamentals such as DELTA, TRUE, CPALL, AOT, MINT, BH, WHA, AMATA, COM7 and SISB.
TECHNICAL VIEW: Kingsford Securities sees support at 1,280 points and resistance at 1,320. Globlex Securities sees support at 1,280 points and resistance at 1,320.
