Asian trade subdued as economic outlook weakens

RECAP: Most Asian share markets were subdued on Friday and the dollar held onto its gains from safe-haven flows, after soft economic data from the US and China fuelled concerns about a global slowdown.

Adding to the uncertainty was the battle to raise the US debt ceiling to avert a potentially destabilising default.

Locally, investors sold Thai shares for profit-taking ahead of tomorrow's election.

The SET Index moved in a range of 1,537.46 and 1,576.59 points this week before closing on Friday at 1,561.35, up 1.84% from a week earlier when the market was open for only two trading days, with daily turnover averaging 54.83 billion baht.

Institutions were net buyers of 13.02 billion baht, while retail investors were net sellers of 9.61 billion, followed by foreigners at 2.42 billion and brokers at 1 billion baht.

NEWSMAKERS: Political brinkmanship over raising the US debt ceiling risks "serious economic costs" even without the "catastrophe" of a debt default, Treasury Secretary Janet Yellen warned on Thursday. President Joe Biden said failure by Congress to act before the Treasury runs out of money -- possibly as early as June 1 -- risked throwing the US economy into a recession.

• US inflation remained stubbornly high in April, rising 4.9.% from a year ago, down from 5% in March but still more than twice the Federal Reserve's target of 2%.
• The Group of Seven wealthy democracies are discussing ways to counter expanded trade with Russia by China, India and Turkey, which collectively has grown by more than $100 billion and has undermined the effectiveness of sanctions against Moscow.
• The Bank of England raised its benchmark lending rate a quarter point as expected to 4.5%, the highest since 2008, to fight stubborn inflation. But it no longer predicts a recession after revising up GDP forecasts.
• Toyota Motor Corp said its net profit fell 14% in fiscal 2022 to 2.45 trillion yen (US$18 billion), the first decline in four years, due to rising material costs. It expects profit to rise 5.2% for the current fiscal year to March 2024.
• Nissan projects a 42% jump in group net profit to 315 billion yen ($2.3 billion) this fiscal year on a 17% increase in revenue to 12.4 trillion yen as the chip shortage wanes.
• Honda plans to spend a record 980 billion yen on research and development this year. It says it will pour about 5 trillion yen into developing electric vehicles (EVs) and software over the decade to 2030.
• SoftBank Group on Thursday announced a consolidated loss of 970.1 billion yen ($7.2 billion) for fiscal 2022, its second consecutive year in the red.
• Sharp reported a loss of 260 billion yen ($1.9 billion) for fiscal 2022, the Japanese electronics maker's first in six years, due to the poor performance of a display subsidiary that was acquired on instructions from Taiwanese parent Foxconn.
• Sumitomo Mitsui Banking Corp and Incubate Fund, a Tokyo-based venture capital firm, have set up a $200-million fund in Singapore to invest in promising fintech and other startups in Asia.
• Xu Lei will step down as chief executive of the Chinese e-commerce group JD.com for "personal reasons" after just one year at the post, handing the role to chief financial officer Sandy Xu.
• LinkedIn, the social media network owned by Microsoft, plans to cut 716 jobs of its total workforce of 20,000 as demand wavers, while also shutting down its China-focused jobs app.
• Singapore-based United Overseas Bank said the completion of its acquisition of Citi's consumer banking arms in Thailand, Malaysia and Vietnam had boosted its regional customer count from 5 million to over 7 million.
• Boeing has won a $40-billion order from Ryanair, one of its most important customers, with Europe's largest budget carrier agreeing to purchase as many as 300 of the company's largest 737 Max aircraft.
• An Indian tribunal has granted bankruptcy protection to Go Airlines, a move that will help the country's fourth-largest carrier attempt to revive itself but complicate foreign lessors' efforts to repossess their planes.
• The Taiwanese electronics giant Foxconn has bought a huge tract of land near the Indian tech hub Bengaluru, as it looks to diversify production away from China. Indian officials said the company was expected to create as many as 100,000 jobs.
• Malaysia's economy grew 5.6% in the first quarter, outperforming expectations of 4.8% growth, but down from a revised 7.1% in the fourth quarter of 2022.
• The Philippine economy grew 6.4% in the first quarter, the slowest pace in two years, as high inflation hurt consumption.
• China's economic recovery seems to be losing steam, with new bank loans tumbling in April and imports unexpectedly contracting, driving a plunge in commodity prices. Inflation rose just 0.1%, the lowest since February 2021. But factory gate deflation deepened, suggesting more stimulus may be needed to boost a patchy recovery.
• Goldman Sachs has agreed to pay $215 million to put an end to a long-running class-action lawsuit that accused the Wall Street banking giant of systemically underpaying women.
• The Bank of Thailand says it intends to relax rules on the use of Chinese yuan for trade settlement to help reduce the impact of currency volatility.
• Household spending ahead of the first term of school, which starts on Tuesday, is expected to reach 57.8 billion baht, the highest since the survey was first conducted in 2010.
• The RealX condo-backed token is on course to become the first digital asset to be traded on the Thai Digital Assets Exchange (TDX) later this quarter, with the aim of raising up to 3.5 billion baht.
• TrueMoney has joined forces with Mastercard and Google to enable users to add a TrueMoney Mastercard virtual prepaid card to a Google Wallet.
• Thailand and the the United Arab Emirates (UAE) on Tuesday announced the launch of their first free trade agreement (FTA).
• The energy conglomerate Bangchak Group said first-quarter revenue totalled 80.3 billion baht, up 16% year-on-year, partly due to positive performance from Okea ASA, the Norwegian oil and gas drilling company in which Bangchak acquired 45.7% share in 2018.
• The Stock Exchange of Thailand fell 8.4% for the year to April 30 and 5% in April alone but executives said on Tuesday that the bourse had begun to record net inflows this week as investors absorbed negative news about the US banking crisis and a potential recession.
• Thailand's food exports are expected to rise by 2.1% to a record of 1.5 trillion baht this year, helped by a recovery in global demand and China's reopening.
• CIMB Thai Bank (CIMBT) plans to expand digital personal loans this year, targeting 500 million baht in total by focusing on the upper-income segment.
• PTT Global Chemical Plc (PTTGC) has announced an investment in the UK-based startup Interface Polymers, a developer of chemical additives to improve the recyclability and performance of key polymers.
• Shanghai-based SAIC Motor has broken ground on a 500-million baht industrial park to begin making batteries for EVs later this year. SAIC Motor-CP, a joint venture with the Charoen Pokphand Group, is building the complex in Chon Buri.

COMING UP: The EU will report its March industrial production index on Monday. China will report April industrial production and retail sales and the EU will report March trade figures.

• Locally, the National Economic and Social Development Council will release official first-quarter GDP figures on Monday. It is also the last day for listed companies to report first-quarter results.

STOCKS TO WATCH: Asia Plus Securities recommends three groups of stocks that benefit from slowing US inflation: financial stocks such as SAWAD and JMT; consumer stocks such as CBG, CRC, CPN, CPALL, BGRIM, GPSC and ADVANC; and high-dividend stocks such as SPALI, AP and TU.

• InnovestX Securities recommends stocks of firms with good fundamentals, low prices and expected profits in 2023-24, in particular AU, BBL, BDMS, CPALL and GULF. The brokerage also recommends investors accumulate earnings plays that are outperforming the SET with strong first-quarter growth. They include BJC, ADVANC, OSP and ZEN.
• Investors are advised to avoid stocks for which the performance outlook is weak and must be monitored, including NRF, LPN, MST, SAWAD, QH and KTC.

TECHNICAL VIEW: InnovestX Securities sees support at 1,545 points and resistance at 1,590. Asia Plus Securities sees support at 1,550 and resistance at 1,580.