Asian shares follow Wall Street downward

RECAP: Asian stocks resumed their declines yesterday after a slump in US tech stocks and more economic data supporting the case for the Federal Reserve to keep raising interest rates set a downbeat tone.

However, negative sentiment should be short-lived, as related indicators like US Treasury yields and the US dollar index have not moved much.

On the Thai market, foreign fund flows are likely to be light during the last week of 2022, says Finansia Syrus Securities, so little change is expected in the SET Index.

Thai shares moved in a range of 1,597.03 and 1,624.34 points this week before closing yesterday at 1,617.55, down 0.1% from the previous week, with thin daily turnover averaging 44.17 billion baht.

Retail investors were net buyers of 1.64 billion baht followed by institutions at 361.30 million. Foreign investors were net sellers of 1.35 billion baht, and brokers sold 649.67 million baht worth of shares.

NEWSMAKERS: The World Bank has slashed its China growth forecast for the year to 2.7% from 4.3% predicted in June, with 4.3% expansion predicted next year. The Asian Development Bank sees growth of 3% thjis year, down from 3.3% predicted earlier, and 4.3% next year.

• Revised figures showed US GDP grew 3.2% in the third quarter, up from a preliminary estimate of 2.6%, driven by strong consumer spending. Meanwhile, applications for unemployment benefits were below forecasts in the most recent week, suggesting the economy is robust enough to withstand higher interest rates.
• Core consumer inflation in Japan hit a four-decade high of 3.7% as companies continued to pass on rising costs, a sign that price hikes are broadening and pressuring the central bank to scale back massive stimulus.
• The Bank of Japan surprised markets by changing its yield curve control policy. It will now let 10-year yields move 50 basis points either side of its 0% target, compared with 25 points before. This is expected to set the stage for tighter monetary policy in the near future.
• Asia ex-China bonds attracted the highest foreign inflows in nine months in November on expectations then that the Fed would slow the pace of interest rate hikes. Overseas investors bought $6.6 billion worth of bonds in India, Indonesia, Malaysia, South Korea and Thailand after withdrawing a net $3.2 billion in the previous month.
• Sam Bankman-Fried, the disgraced co-founder of the collapsed crypto exchange FTX, has been released on $250-million bail while he awaits trial on criminal fraud charges in the US. The court ordered him to move back in with his parents and be subject to electronic monitoring.
• Toyota Motor president Akio Toyoda said he is among the auto industry's "silent majority" in questioning whether electric vehicles should be pursued exclusively, comments that reflect a growing uneasiness about how quickly car companies can transition from internal combustion engines.
• The Tourism Authority of Thailand (TAT) forecasts 3.14 million domestic trips during the New Year holiday, generating 11.2 billion baht.
• Consumer spending over the New Year holiday is expected to reach 103 billion baht, up 20.1% from the same period a year ago and the first time in three years that the figure exceeds 100 billion baht.
• PTT Group reaffirmed its respect for human rights and said it was committed to building better societies after Norway's sovereign wealth fund, the world's largest with assets of $1.3 trillion, dropped PTT and subsidiary OR from its equity portfolio because of the latter's activities in Myanmar.
• PTT Exploration and Production Plc has announced another gas discovery in Malaysia from the Paprika-1 exploration well in Block SK410B off Northern Sarawak. It is also preparing to divest its 2.5% share in its last oil project in Angola as it plans to direct funds to other regions.
• Media spending is predicted to grow 4.2% to 85.7 billion baht in 2023, slower than the 8.1% surge forecast for 2022, because of expected economic turbulence next year, according to Media Intelligence Group. Advertising spending during the recent World Cup was less than 200 million baht, down from around 500 million for previous large sports tournaments, it noted.
• Thai AirAsia expects revenue from the international tourist market to increase to 60% of its total, up from 40%, aiming for at least 20 million total passengers.
• The Securities and Exchange Commission (SEC) is warning investors to carefully review any new agreements proposed by the crypto exchange Zipmex as it carries out a restructuring. The Singapore-based company froze customer withdrawals earlier this year because of liquidity woes.
• The subsidy scheme for domestic tourists might be reduced to 500,000 rooms from 1.5 million after the cabinet cut the proposed budget of 8.7 billion baht by half, says the TAT.
• CPRAM Co, a food manufacturer under Charoen Pokphand Group, the country's biggest agribusiness conglomerate, plans to open its new 2-billion-baht bakery factory in Chon Buri next year.
• B.Grimm Power Plc is taking partial stakes in four wind farms in South Korea, representing investments of nearly US$4.1 million and 955 megawatts in total installed generation capacity.
• Ratch Group, Thailand's largest private power producer, has completed a $605-million deal to acquire Singapore-based Nexif Energy Joint Venture, part of a move to grow its energy and battery businesses.
• Domestic car production rose 15% year-on-year to 190,155 units in November, the highest in 44 months, as the semiconductor shortage continued to ease. For the first 11 months, the total of 1.72 million was up 21% year-on-year.
• The medical services and beauty sectors have the brightest prospects for 2023, driven by social media and an ageing society focused more on health and tourism, said the University of the Thai Chamber of Commerce (UTCC).
• The Ministry of Commerce expects Thailand's exports to reach 9 trillion baht by the year-end, up 7% from the year before, with more modest growth to 9.25 trillion forecast in 2023.
• Overall smartphone shipments to Thailand dropped 12% year-on-year in the third quarter, particularly for entry-level handsets, as inflation delayed people's purchasing decisions, said the tech market analysis firm Counterpoint.
• Bangkok Life Assurance is on track to achieve total premiums of 35.8 billion baht this year, on par with 2021, but the outlook for next year remains uncertain given the projection of slow growth for the global economy. Total premiums for the market have slipped an estimated 0.5% this year to 487 billion baht.
• Berli Jucker, the SET-listed consumer goods maker and owner of Big C Supercenter, hopes to convert 30,000 mom-and-pop shops across the country to its Donjai model over five years as part of a new retail partnership and modernisation scheme.

COMING UP: China will report November industrial production and the US will release November wholesale inventories on Tuesday. The US will report November pending home sales on Wednesday. Locally, updates are due next week from the Office of Industrial Economics on manufacturing indices and from the Fiscal Policy Office on economic conditions and future sentiment.

STOCKS TO WATCH: Bualuang Securities recommends stocks with growth potential and worth accumulating in 2023: AMATA, AOT, BBL, BJC, GULF and WHA.

• For dividends, Asia Plus Securities recommends TISCO, AP, ASK, NOBLE, QH, DCC, TTW and EGCO. High-dividend stocks with good ESG scores include SCB, RATCH, PTT and ADVANC. Top picks overall are AP, ASK, NOBLE, TTW, ADVANC and SCB.
• DAOL Securities recommends stocks that will benefit from China's reopening, such as ERW, BAFS, SPA, AOT, AAV, EKH and WHA.

TECHNICAL VIEW: SCB Securities sees support at 1,600 points and resistance at 1,640. Capital Nomura Securities sees support at 1,597 and resistance at 1,651.