Caution takes hold ahead of US jobs data

RECAP: Asian equities mostly fell on Friday as caution took hold in global markets ahead of the release of US jobs data that will help shape the outlook for Federal Reserve interest rates.

The Thai stock market was also pressured by concerns over impacts of the global minimum tax of 15% on large corporations, a proposal to cut power bills to 3.70 baht a unit, and tighter margin loan rules.

The SET index moved in a range of 1,352.33 and 1,395.70 points this week, before closing on Friday at 1,367.99, down 1.2% from the previous week, with daily turnover averaging 41.2 billion baht.

Retail investors were net buyers of 1.4 billion baht. Brokerage firms were net sellers of 958.6 million baht, followed by foreign investors at 279.6 million, and local institutions at 170.27 million.

NEWSMAKERS: Nippon Steel and US Steel have filed suit over US President Joe Biden's decision to block the Japanese giant's proposed acquisition of its American rival for $14.3 billion. The companies are challenging the review process for the acquisition.

• Euro zone inflation picked up to 2.4% last month, from 2.2% in November, official data showed, which will likely push the European Central Bank to pursue rate-cutting more cautiously, said analysts.
• The US International Trade Commission says US manufacturers are being "materially injured" by imports of passenger vehicle and light truck tyres from Thailand, South Korea and Taiwan. Subsidised tyres from Vietnam also hurt domestic makers, it said.
• US Federal Reserve officials at their December meeting expressed concern about inflation and the impact Donald Trump's policies could have. Minutes of the meeting indicated they would move more slowly on interest rate cuts as a result.
• Chinese consumer inflation in December weakened further toward zero, decelerating for a fourth straight month in a setback for efforts to stamp out deflation and revive demand. Factory deflation extended into a 27th month, though the producer price index recorded a slower drop of 2.3%.
• China has expanded its support for the beleaguered yuan with a plan to issue a record amount of bills in the Hong Kong market to mop up liquidity. The People's Bank will auction 60 billion yuan ($8.2 billion) of six-month bills on Jan 15.
• China will subsidise more consumer products and boost funding for industrial equipment upgrades to bolster domestic consumption. Consumers will qualify for a 15% subsidy for buying new mobile phones, tablets and smartwatches under 6,000 yuan.
• Large Japanese firms are likely to increase wages by about 5% on average in 2025, the same as last year, a major business lobby said on Tuesday.
• Microsoft plans to spend $80 billion this year on AI data centres, primarily in the US. It plans to invest $3 billion in India on AI and cloud infrastructure over the next two years.
• World Semiconductor Trade Statistics forecasts global chip market growth of 11.2% in 2025 to US$697 billion, driven by strong demand for data centres and AI-enabled smartphones.
• Global banks are expected to cut as many as 200,000 jobs in the next three to five years as AI encroaches on tasks now carried out by human workers, according to Bloomberg Intelligence.
• China's auto exports are estimated to slow notably this year, with no growth predicted for electric vehicle exports, an auto association official said on Thursday.
• Indonesia is maintaining its ban on the sale of the Apple iPhone 16, saying the company's $1-billion plan that includes building a local AirTag factory is insufficient to meet local content requirements.
• Goodyear Tire & Rubber plans to sell its Dunlop brand to Sumitomo Rubber Industries of Japan for $701 million in cash as part of a plan to streamline its business.
• Samsung Electronics reported preliminary operating profit of 6.5 trillion won ($4.5 billion) in the December quarter, versus average projections for 8.96 trillion won. Revenue of 75 trillion won also missed estimates.
• Amazon Web Services on Thursday opened its new Thai data centre, as part of a long-term investment of more than US$5 billion in the country.
• The Macau-based casino operator Melco Resorts & Entertainment has opened an office in Thailand and plans to invest in integrated resorts if the government approves plans that would include legalised gambling.
• The Thai Hotels Association said the December hotel occupancy rate of 76% matched pre-Covid levels, with average daily room rates continuing to grow. The January occupancy rate is projected at 73%.
• The Thai Bond Market Association estimates new corporate bond issuance in 2025 at 850-900 billion baht, with high-yield issuance expected to fall 50% due to weak confidence and the economic slowdown.
• The Joint Standing Committee on Commerce, Industry and Banking forecasts Thailand's 2025 GDP growth at 2.4% to 2.9%, with exports growing 1.5% to 2.5%, lower than the estimated 4% growth seen in 2024, amid US trade policy uncertainties.
• The cabinet has approved a preliminary fiscal 2026 expenditure budget of 3.78 trillion baht, up 0.7% from fiscal 2025, with a deficit of 860 billion baht or 4.3% of GDP.
• Thai consumer inflation rose 1.23% year-on-year in December, the ninth month of growth, bringing the full-year figure to 0.4%.
• The government wants to reduce electricity bills by 11%, to 3.70 baht a unit from 4.15 baht now, after former premier Thaksin Shinawatra floated the idea. Options include extending the subsidy repayment period to the Electricity Generating Authority of Thailand and asking power producers to cut profit margins.

COMING UP: On Monday, India will report December inflation and Japan will update the current account. On Tuesday, the US releases producer prices and crude oil inventories. On Wednesday, the UK, US and Russia report December inflation. Thursday brings German inflation, UK trade figures, US retail sales, manufacturing data and jobless claims, and China releases GDP and unemployment updates. On Friday, the euro zone will report December inflation.

STOCKS TO WATCH: Bualuang Securities expects ADVANC and TRUE will benefit from a government plan to cut electricity tariffs from 4.15 baht per unit to 3.70 baht, as electricity accounts for 30-40% of network operating expenses. In the short term, a reduction to 3.95 baht could boost long-term profits by 0.5% to 1% for ADVANC and 2.5% to 3% for TRUE. In the best-case scenario (3.70 baht), profits could increase by 1.5% to 2% for ADVANC and 5-6% for TRUE.

• Asia Plus Securities says uncertainties about Donald Trump's policies have caused fluctuations in stock prices linked to the Chinese economy, amid concern about a new 10% tariff on Chinese imports to the US. Consequently, some investors are reducing exposure to firms such as PTTGC, GPSC, SCGP, SCC, ERW, CENTEL and AOT. However, it is recommended to accumulate if prices drop significantly below fundamentals.
• KGI Securities (Thailand) recommends buying AOT due to a strong performance outlook in the first half of this year and in the long term.

TECHNICAL VIEW: Kasikorn Securites sees support at 1,350 points and resistance at 1,380. InnovestX Securities sees support at 1,345 and resistance at 1,380.