Asia follows Wall Street down, SET falls below 1,600

RECAP: Asian shares slumped on Friday, with the SET closing below 1,600 points, following a sharp decline on Wall Street amid concern that pockets of trouble in the US banking sector could portend broader dangers.

Foreign investors continue to sell stocks from emerging markets. Foreign net selling on the SET as of Thursday totalled 36 billion baht since the start of the year.

Thai shares moved in a range of 1,596.44 and 1,624.78 points this week before closing yesterday at 1,599.65, down 0.4% from the previous week, in daily turnover averaging 54.02 billion baht.

Institutions were net buyers of 4.05 billion baht, followed by retail investors at 3.38 billion. Foreigners were net sellers of 6.56 billion baht, followed by brokers at 869.12 million.

NEWSMAKERS: Federal Reserve chairman Jerome Powell has told US lawmakers that interest rates may need to stay higher for longer in order to tame inflation. Traders have dramatically raised their bets on a 50-basis-point rate hike to 65%, from 31% earlier, according to the FedWatch tool. The next Fed meeting is March 21-22.

• China's exports and imports continued to decline in the first two months of the year, clouding the outlook for the economy. Exports fell 6.8% in January and February, improving from December's drop of 9.9%. Imports contracted 10.2%, after a 7.5% decline in December.
• Chinese consumer inflation slowed to 1% year-on-year in February, from 2.1% in January, as consumers remained cautious despite the abandonment of pandemic controls.
• China has given assurances that it will support Sri Lanka's debt restructuring, potentially clearing the biggest hurdle for the country to secure a $2.9-billion bailout from the IMF.
• Sea Ltd has reported its first-ever profit, a milestone in the turnaround effort for the Southeast Asian gaming and e-commerce giant. Net income in the fourth quarter of 2022 was US$426.8 million, the Singapore-based parent of Shopee and the gaming firm Garena said.
• Meta Platforms Inc, the owner of Facebook and Instagram, is planning a fresh round of layoffs that could affect thousands of employees, insiders told Bloomberg. That follows an earlier cut of 11,000 positions or 13% of its total in November.
• Panic swept through the California startup scene on Thursday as some venture capital firms urged portfolio companies to move their money from Silicon Valley Bank (SVB) over concerns about its stability. That followed the abrupt shutdown of the crypto-friendly Silvergate Capital Corp.
• The troubles of the two California lenders mask a deeper problem for the finance sector, say analysts: Rising interest rates have left banks laden with low-interest bonds that can't be sold quickly without losses. If too many customers tap their deposits at once, it risks a vicious cycle.
• Japan's economy grew in the fourth quarter by just 0.1% year-on-year, less than the 0.6% initially estimated, weighed down by weak consumption and underscoring the fragility of its recovery.
• The Bank of Japan on Friday kept its ultra-easy monetary policy unchanged in the final policy meeting chaired by outgoing Governor Haruhiko Kuroda. Parliament on Friday approved academic Kazuo Ueda, 71, as his successor.
• The Japanese trading house Sojitz and the Japan Organization for Metals and Energy Security will invest A$200 million (US$135 million) in Australia-based Lynas Rare Earths. It is Japan's first foray into heavy rare-earth elements, which are essential for magnets used in electric vehicle motors.
• Indonesia has announced a subsidy programme for electric cars, scooters and buses to promote EV adoption and help win investment deals with global EV makers such as Tesla of the US and BYD of China. E-scooter purchasers will be eligible for a 7-million-rupiah ($460) subsidy.
• Thailand's consumer confidence increased for the ninth straight month in February, boosted by recovering tourism, government stimulus measures and a weaker baht. The consumer confidence index rose to a three-year high of 52.6 from 51.7 in January.
• The retail developer Central Pattana (CPN) plans four more major mixed-use projects over the next 5-10 years, via joint ventures and through its own investment. Each one would cover at least 25 rai and have a total gross floor area of more than 350,000 square metres, with a budget of at least 20 billion baht.
• BBGI Plc, the biotech arm of Bangchak Plc, is teaming up with SCG Chemicals and QTC Energy to jointly develop and manufacture bio-based transformer oil in a production trial said to be the first of its kind in Thailand.
• SET-listed Indorama Ventures expects revenue to rise by 5-10% in fiscal 2023, driven by demand, despite the prospects of a global recession. The company earned $18.8 billion in fiscal 2022, thanks to demand growth for essential chemical products, population growth and new projects.
• Centara Hotels and Resorts (CENTEL) is aiming for revenue of 10 billion baht this year, exceeding its 2019 total, helped by the return of Chinese tourists and the opening of six new hotels in Thailand and Japan.
• Gulf Energy Development, the country's largest power producer by market value, has announced an investment in a 1,500-megawatt offshore wind farm project in the UK, its first business expansion in that country.
• The Thai National Shippers Council (TNSC) expects the country's exports to grow 1-2% this year despite the uncertain global economy and relatively volatile energy prices. It has forecast contractions in the first and second quarters before gains of 1.9% and 9.8% in the third and fourth quarters, respectively.
• All 560,000 room nights in the government's latest hotel subsidy programme for domestic tourists were booked within four days, the Tourism Authority of Thailand (TAT) said on Friday. The scheme is projected to generate 9.2 billion baht in revenue for the industry.
• PTT Exploration and Production has been awarded exploration and production licences at two of three new petroleum blocks in the Gulf of Thailand, a move that should pave the way for more domestic oil and gas supply to strengthen the country's energy security.
• Nestle (Thai), the local unit of the global consumer goods giant, looks set to spend 10 billion baht this year its highest investment budget in five years to expand its business. Of the total, 6.5 billion would be used to increase the production capacity of its Purina pet-care factory in Rayong by 50%.
• Thai Oil, the country's largest oil refinery by capacity, plans to allocate $1 billion to expand its businesses between 2023 and 2025, with half the budget going to the Clean Fuel Project (CFP). Under the CFP, it aims to double its oil refinery capacity to 400,000 barrels a day.
• WHA Utilities & Power, an affiliate of WHA Corp, the country's biggest industrial land developer and operator, expects its rooftop solar panel installation service to grow by 24% to 300 megawatts this year, thanks to greater adoption of clean energy in the industrial sector.
• Sahamitr Pressure Container, the world's largest cylinder producer by capacity, expects sales to grow 21% to 7.5 million units this year as trade volume returns to normal. Its cylinders are mostly used for liquefied petroleum gas (LPG).

COMING UP: The US will release the Consumer Price Index for February on Tuesday. On Wednesday, China will release January and February retail sales and the US will report February producer prices and the March housing market index. Locally, the SET on Monday will report trading statistics for February.

STOCKS TO WATCH: Asia Plus Securities says domestic consumption stocks will gain from the tourism recovery and recommends CRC, CBG, ADVANC, HMPRO and THANI. Stocks that benefit from China reopening are also recommended, namely SCGP, PTTGC and NER, along with high-dividend stocks such as AP, TISCO and SCB.

• Yuanta Securities says China's recovery, the election and production base relocation to Thailand are factors that will support an automotive industry recovery. Potential beneficiaries include SCB, BJC, CPALL, OSP, M, WHA, IRPC and SJWD.

TECHNICAL VIEW: InnovestX Securities sees support at 1,590 points and resistance at 1,625. Pi Securities sees support at 1,590 and resistance at 1,630.