Trade optimism lifts spirits, SET leads region

Trade optimism lifts spirits, SET leads region

Recap: Global stock markets rebounded late in the week as investors anticipated a positive outcome of US-China trade negotiations. Thailand led regional peers, helped by gains in consumer and energy stocks and shrugging off a fall in exports in January.

The SET index moved in a range of 1,635.71 and 1,661.09 points before closing at 1,659.20, up 1.4% from the previous week, in moderate turnover averaging 47 billion baht a day.

Foreign investors were net buyers of 10.35 billion baht, while brokerage firms bought 1.3 billion and institutional investors purchased 705.7 million worth of shares. Retail investors were net sellers of 12.4 billion.

Newsmakers: The founder of the Chinese telecom giant Huawei has hit back at US efforts to blacklist the company and denied there are any "backdoors" in its technology to spy for Beijing.

US President Donald Trump said the trade talks with China were complex but were "going very well" and reiterated that the deadline for raising tariffs could be extended, saying March 1 was "not a magical date".

British officials are in Brussels seeking new guarantees from the EU rather than demanding the Brexit divorce deal be reopened, sources said on Thursday. Bloomberg also reported that Prime Minister Theresa May might seek a three-month extension of the March 29 deadline for leaving the union.

Malaysian authorities have filed money-laundering charges against a British national who had worked for former prime minister Najib Razak as a media adviser. Mr Najib is also facing numerous charges in connection with the disappearance of billions of dollars from the state fund 1MDB.

HSBC said its pre-tax profit rose last year but it suffered a bruising final quarter as worries over the global economy and the US-China trade war began to bite.

Thailand's economy grew at the fastest pace in six years in 2018, with fourth-quarter GDP expansion of 3.7% year-on-year beating expectations on higher domestic demand and growing tourism arrivals.

The baht on Wednesday soared to its highest level against the dollar in more than five years on hopes that the US and China would be able to secure a trade deal.

The use of free trade agreement privileges and the Generalised System of Preferences by Thai exporters topped nearly US$80 billion in 2018, outpacing the target of $70.8 billion set by the government.

The Stock Exchange of Thailand is considering extending the night trading period for gold futures to serve high demand amid foreign-exchange fluctuations and prospects of slower global economic growth.

The National Legislative Assembly has approved an amendment to the SEC Act to pave the way for scripless securities issuance and tokenised securities via blockchain.

Foreign investors remain confident about Thai economic prospects, but fret over the connectivity between the Eastern Economic Corridor and related infrastructure developments, anti-corruption policy and the direction of free trade agreements, according to the Joint Foreign Chambers of Commerce in Thailand.

Financial uncertainties and a global economic slowdown have prompted investors to reduce their exposure to high-risk assets, which could change market conditions, says Tisco Asset Management.

The US recruitment agency Manpower Group Thailand forecasts an unemployment rate in 2019 of 1.1% to 1.2%, or between 418,000 and 450,000 people, compared with 400,000 in 2018.

The number of housing transfers jumped in the fourth quarter last year, with the figure expected to continue rising in the first quarter of 2019 as buyers rush to avoid tighter mortgage lending rules that will take effect on April 1.

The Thai Retailers Association (TRA) says it stands by its position that there should no longer be a master concession for duty-free business at Suvarnabhumi airport. The current King Power monopoly expires in 2020 and Airports of Thailand is preparing to call bids for a new concession. The TRA says the concession at Suvarnabhumi should be split into at least four contracts.

Thailand ranked No.1 for mobile banking users, second for ownership of cryptocurrency, and third in mobile commerce, according to the Global Digital Report 2019.

The Bank of Thailand expects 10 financial and non-financial institutions to soon complete testing facial recognition for electronic Know Your Customer (e-KYC) technology. This could pace the way for passbook account opening through mobile banking apps to begin in the second quarter.

SET-listed Siam Cement Group (SCG), Thailand's largest industrial conglomerate, is preparing to expand investment in logistics and service businesses to serve the Eastern Economic Corridor.

SET-listed Ratchaburi Electricity Generating Holding Plc (RATCH) has earmarked 16-26 billion baht for 2019 capital expenditure.

SET-listed Thai Union Group Plc (TU), the global seafood conglomerate, reported lower net profit and sales last year, due in large part to a strong baht in the first quarter. Full-year net profit fell 13.4% to 5.2 billion baht.

Coming up: Germany will release preliminary March consumer confidence on Tuesday. The EU will release February business confidence on Wednesday, with Canada announcing January inflation.

On Thursday, the US will announce revised fourth-quarter 2018 GDP growth, Britain will release February consumer confidence and Germany will release February inflation figures.

China will release manufacturing PMI readings on Thursday and Friday, and Japan will release February consumer confidence on Friday. On the same day, the US will release personal income and spending data for December and January.

Stocks to watch: Asia Plus Securities recommends hospitality firms as they are poised to benefit from tourism growth. Its picks are ERW, MINT and CENTEL.

DBS Vickers Securities Thailand recommends accumulating stocks expecting to report Q1 earnings, with top picks AOT, BBL, CPALL, HANA, PTT and WHA

Yuanta Securities Thailand recommends accumulating defensive stocks with cheap valuations and high dividends, among them SCB, SCC, TISCO, KKP, QH and PSH.

Technical view: Capital Nomura Securities sees support at 1,640 points and resistance at 1,688. RHB Securities Thailand sees support at 1,620 and resistance at 1,670.

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