China weakness depresses emerging market shares

China weakness depresses emerging market shares

Recap: Emerging market stocks recorded a second consecutive week of losses amid worries about a slowdown in China's economy, reflected in weak retail sales and tepid industrial output growth. Also hurting sentiment was the decision by the European Central Bank to end its massive asset-buying scheme, even though policy remains broadly unchanged.

The SET index moved in the range of 1,612.91 and 1,646.88 points before closing at 1,609.45, down 2.4% from the previous week, in moderate turnover averaging 44.2 billion baht a day.

Retail investors were net buyers of 14.3 billion baht. Institutional investors were net sellers of 8.3 billion baht, foreign investors sold 4.6 billion and brokerage firms unloaded 1.4 billion worth of shares.

Newsmakers: US President Donald Trump has said he could intervene in the case of Huawei executive Meng Wanzhou if it would help avoid a further decline in US relations with China. Ms Meng was arrested in Canada and is accused by the US of sanctions-busting. She is free on bail but must stay in her Vancouver home pending an extradition hearing that must be held within 60 days.

Japan decided Monday to effectively exclude the Chinese telecom equipment giants Huawei and ZTE from public procurement amid concerns about security breaches.

A Chinese court ordered a ban on domestic sales of certain iPhone models, mainly from the 6 and 7 lines, in a patent dispute with the US chip-making giant Qualcomm. The two California firms have been feuding for years in courts worldwide over patents and royalties between.

The British pound has been on a roller-coaster as embattled Prime Minister Theresa May tours European capitals in a desperate bid to salvage her Brexit deal. The parliamentary vote on Brexit has been delayed but will happen before the end of December, the government says.

The European Parliament on Wednesday approved an accord with Japan that has been dubbed the world's biggest trade deal, covering economies that represent a third of global GDP.

French President Emmanuel Macron announced a series of measures including a rise in the minimum wage in a bid to defuse the "yellow vest" protests that have rocked the country.

Shaktikanta Das has been named as the next governor of the Reserve Bank of India. He succeeds Urjit Patel, who left for "personal reasons", though most observers agree he was tired of the pressure from the Modi government to support its policies.

SoftBank Group aims to raise over US$23 billion by listing its Japanese mobile unit next week in one of the biggest tech IPOs in years.

Initial public offering (IPO) sentiment in Thailand remains good, with closing prices of 80% of IPOs on their first trading day higher than subscription prices from 2017 to 2018, says the Stock Exchange of Thailand.

The approval of the country's first initial coin offering (ICO) portal may be delayed until the beginning of next year because the technological system is not ready yet, says the Securities and Exchange Commission.

Domestic economic growth is expected to cool to 3.7% in 2019 from a 4% forecast for 2018, while the election could be a threat in the short run as foreign investors hold off on plans as they await the outcome, says a senior economist at CIMB Thai Bank.

The private sector remains concerned about farm activity next year, fearing that lower shipments will slow the country's export growth to 5% for a total of US$268 billion.

Thailand will not join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) during this government's term, said Commerce Minister Sontirat Sontijirawong, citing a lack of preparation time before the trade pact takes effect on Dec 30.

The foothold of Chevron Thailand Exploration and Production, the country's first petroleum explorer, will become far smaller in the next few years after the government awarded 10-year concession rights to operate the country's largest gas block, Erawan, to PTT Exploration and Production Plc (PTTEP).

As expected, the Energy Regulatory Commission has halted a takeover effort by Global Power Synergy Plc, a PTT subsidiary, for Glow Energy Plc, amid fears of monopoly.

Kasikornbank has made a big push into digital banking by forming a joint venture with Line Financial Asia to tap into the online social giant's 44 million local users, aiming to expand its retail loan and digital banking business.

The local car market in 2019 will exceed 1 million units sold but with much lower growth than in 2018, say auto experts who view market sentiment as sustainable and healthy.

SET-listed B.Grimm Power Plc (BGRIM) has become Thailand's first real-sector corporation to issue green bonds, worth 5 billion baht, with the Asian Development Bank purchasing all the debentures.

A member of the Narongdej family has vowed to repay debts incurred from issuing bills of exchange worth 50 million baht in the latest episode of the Wind Energy Holding (WEH) drama. Kasem Narongdej, co-founder of KPN Group and father of Nop Narongdej, the chairman of WEH, has also insisted his signature used to divest WEH shares was forged.

VGI Global Media has formed a joint venture with Sinar Mas Group, one of the largest conglomerates in Indonesia, to operate an integrated media platform on the Jakarta mass transit system, planning to pour US$30 million into the new company next year.

Coming up: The EU will release November trade and inflation data on Monday. The Reserve Bank of Australia will release its meeting minutes on Tuesday. Japan will release trade figures and the UK and Canada will announce November inflation on Wednesday.

The US Federal Reserve will hold its final policy meeting of the year, with results to be announced around 2am Thursday Thailand time. The Bank of England will also hold a policy meeting and issue an update on its quantitative easing programme on Thursday.

Japan will announce November inflation on Friday, with the US releasing November durable goods orders, personal income and personal spending the same day. Britain and Germany will announce consumer confidence for December and January, respectively, and the EU will release preliminary December consumer confidence figures.

Stocks to watch: SCB Securities recommends buying banking shares, in particular BBL and KTB, in anticipation of a possible policy rate increase when the central bank's Monetary Policy Committee meets on Wednesday. Retail businesses poised to benefit from government measures to stimulate consumer spending are CPALL and GLOBAL.

Kasikorn Securities recommends CPALL shares in light of high seasonal spending and consumption stimulus measures. It also recommends STEC as a potential beneficiary of the high-speed rail bid, and IVL for better spreads on polyethylene terephthalate products.

Technical view: SCB Securities sees support at 1,585 and 1,600 points and resistance at 1,625 and 1,640. Asia Plus Securities sees support at 1,600 and resistance at 1,630.

Do you like the content of this article?
COMMENT