Asian shares fall as rate fears return

RECAP: Asian markets fell yesterday as optimism that had fuelled earlier buying gave way to nervousness ahead of a US jobs report that could determine Federal Reserve rate hike plans.

Soft US economic data earlier had led to a belief that the US central bank could slow down its strict tightening. International politics also intensified, both in the Korean Peninsula and Russia, adding to global uncertainty.

Domestically, Thailand's economy is recovering, with second-half GDP growth expected to be at least 3.6%. Inflation is slowing down and the central bank sees no need to hike interest rates too aggressively. Asia Plus Securities sees the SET Index rebounding, led by stocks benefiting from the economic recovery and a rebound in tourism, as well as banking plays.

The SET Index moved in a range of 1,556.73 and 1,597.80 points this week before closing yesterday at 1,579.66, down 0.6% from the previous week, in daily turnover averaging 58.97 billion baht.

Retail investors were net buyers of 13.63 billion baht, followed by foreign investors at 1.88 billion. Institutions were net sellers of 14.22 billion baht and brokers sold 1.29 billion baht worth of shares.

NEWSMAKERS: Oil prices were headed for their biggest weekly gain since March as the Opec+ alliance led by Russia and Saudi Arabia said it would slash oil output by 2 million barrels per day, or 2% of global demand. Goldman Sachs predicts the cuts could push oil prices up from around $90 a barrel now to $130 or more next year.

• The International Monetary Fund (IMF) is preparing to trim its global GDP forecasts further as recession risk rises. The IMF and the World Bank have warned of risks in emerging markets, affecting by rising interest rates and US dollar appreciation. Markets now forecast the benchmark US interest rate to rise to a range of 4.5% to 4.75% in 2023.
• Global merchandise trade growth could slow next year to just 1%, from 3.5% this year, as "multiple shocks" ranging from the war in Ukraine, high energy costs in Europe and US monetary tightening raise costs, the World Trade Organization says.
• Transactions on the Binance blockchain were halted yesterday after a spike in "irregular activity". Hackers stole around $100 million worth of cryptocurrency the Binance-linked blockchain, BNB Chain, the company said.
• Samsung reported a lower-than-expected 32% drop in operating profit in the third quarter to 10.8 trillion won ($7.67 billion) as memory chips sales fell sharply, causing the Korean company's share price to fall 2% yesterday.
• Elon Musk has teased "X, the everything app" as his goal after he completes his acquisition of Twitter. Based on the billionaire's past comments, that service could look a lot like the popular Asian super-apps Grab, Line and WeChat.
• Asian issuance of bonds denominated in local currencies is at its highest in more than a decade, at $2.65 trillion in the first nine months of this year as borrowers shun expensive US dollar debt and tap cheaper, liquid markets at home.
• Foreigners were net buyers of 146 billion baht worth of Thai equities in the first nine months of this year as they expect tourism to revive the economy in the fourth quarter, say SET executives.
• With local tourism receipts set to fall below the target of 656 billion baht due to floods and economic volatility, the Tourism Authority of Thailand (TAT) plans to accelerate spending to revive sluggish demand. Governor Yuthasak Supasorn says travel subsidies are still an essential tool.
• The Tourism and Sports Ministry is pushing ahead with its proposals for a 1-billion-baht stimulus project and a 4am closing time for entertainment venues now that Covid-19 has been downgraded to endemic.
• More than 6 million international travellers visited Thailand in the first nine months of this year, slightly higher than the TAT's goal. Arrivals were led by Malaysia at 972,699, followed by India (561,656), Laos (410,563), Singapore (311,567) and Cambodia (309,034).
• PTT Plc is diversifying into another non-oil business by setting up a logistics firm to provide goods transport and management services. The move is part of a plan to invest in S-curve businesses that promise rapid growth, said chief executive Attapol Rerkpiboon.
• BEC World, the operator of Channel 3, aims to pursue more content licensing and digital business to increase revenue, offsetting declining earnings from TV advertising, which now contributes 88% of the firm's revenue. New businesses are expected to contribute 50% of revenue by 2027.
• Ananda Development plans to develop a mix of residential projects comprising a wellness centre, hotels and an international school on a 500-rai inland plot in Phuket, with the first phase beginning next year.
• Inflation in Thailand is easing, the Commerce Ministry said on Wednesday after reporting that consumer prices in September rose 6.41% year-on-year. That's down from 7.86% in August, 7.61% in July, 7.66% in June and 7.1% in May.
• The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) expected the economy to grow by at least 3-3.5% this year, driven by the gradual recovery of tourism. The new projection is up from 2.75 to 3.5% forecast earlier.
• Thailand's exports should grow by 8% this year if China's economy recovers and the semiconductor shortage eases, according to the Thai National Shippers' Council. Chairman Chaichan Chareonsuk said exports for the last four months of this year are likely to see continued growth momentum.
• Jay Mart, the IT retail, finance and technology holding company, aims to reach a 500-billion-baht market capitalisation by 2024, up from 200 billion now, driven by technological power, new business models and financial products.
• The Bank of Thailand plans to ask both banks and non-banks to cease encouraging unnecessary borrowing of unsecured loans early next year as it wants to bring household debt down to 80% of GDP or lower, compared with about 88% now.
• Gulf Energy Development, Thailand's biggest private power producer, has begun selling electricity from its new gas-fired plant in Chon Buri. The facility, operated by subsidiary Gulf SRC Co, sells power to the Electricity Generating Authority of Thailand (Egat).
• Central Retail Corporation (CRC) plans to invest 10 billion baht to accelerate the development of its next-generation omni-channel platform. The company says its digital platform now accounts for 20% of total sales.

COMING UP: Investors this week will monitor a British GDP update and unemployment figures on Wednesday, and US producer prices and Fed meeting minutes on Thursday. On Friday China will release September trade and inflation data and the US will release September retail sales.

• Locally, the Bank of Thailand will release its Monetary Policy Committee meeting minutes on Wednesday. The Ministry of Finance is preparing to host Apec finance ministers from Oct 19-21. Looking further ahead, the BoT Digital Finance Conference 2022 will be held from Oct 27-29.

STOCKS TO WATCH: Globlex Securities recommends four investment themes for next week: 1. Post-flood repairs: GLOBAL, DOHOME, HMPRO, TOA, COTTO, DCC and TASCO. 2. End of the emergency decree: ERW, CENTEL, VRANDA, ASAP and SPA. 3. Exports growing: BRR, KSL, TFG, GFPT, ASIAN and JUBILE. and 4. Socks recommended by the Investment Analysts Association: ADVANC, AOT, BBL and KBANK.

• Capital Nomura Securities recommends stocks related to domestic consumption and high-growth stocks divided into 4 themes. 1. Anti-commodity: SCGP, GPSC, TOA, EPG, GULF, SAPPE and BJC 2. High growth/digital tech plays based on domestic demand: JMART, JMT, SINGER, BE8, BBIK and IIG. 3. Yield surge: TLI, BLA, KBANK and SCB. 4. Consumer plays: ADVANC, TIDLOR, INTUCH, DTAC MAKRO, CRC, KTC, SNNP and ONEE.

TECHNICAL VIEW: Globlex Securities sees support at 1,570 points and resistance at 1,608. Phillip Securities sees support at 1,560 and resistance at 1,595.