RECAP: Global stock markets lost ground this week as investors assessed the impact of more US interest rate hikes and tensions over Taiwan. External factors remained the key factors affecting market sentiment in Asia including Thailand.
The SET index gained 4% in August, supported by a strong fundamental outlook and lower local bond yields. Despite the increase, the SET's forward price/earnings (PE) ratio only edged up to 16.7 times, from 16.6.
The SET Index moved in a range of 1,611.19 and 1,644.09 points this week before closing yesterday at 1,622.15, down 1.4% from the previous week, in average daily turnover of 70.56 billion baht.
Retail investors were net buyers of 6.6 billion baht, followed by foreign investors at 1.87 billion and brokers at 476.9 million. Local institutional investors were net sellers of 8.95 billion baht.
NEWSMAKERS: Creditors of Thai Airways International on Thursday approved a revised business rehabilitation plan. The carrier told the SET that creditors holding 78.59% of its total debt endorsed the plan, which will be submitted to the Central Bankruptcy Court on Sept 14.
- The Japanese yen fell past 140 to the dollar for the first time since 1998, further testing the Bank of Japan's resistance to the global wave of interest-rate increases, even as inflation pushes past the central bank's 2% target.
- The Philippine peso sank to an all-time low near 57 to the US dollar, adding pressure on the central bank to raise rates more aggressively. With a 10% loss this year, the currency is the third worst performer in Asia after the yen and the won.
- Oil prices rallied yesterday, paring a hefty weekly decline, ahead of an Opec+ meeting on Monday at which Saudi Arabia is expected to push for output cuts to revive prices.
- Bitcoin crept back above $20,000 yesterday after another volatile week, as sentiment in the cryptocurrency market remained weak. The sector has contracted to less than $1 trillion, about a third of its all-time market value reached in November.
- Around 16 million people in the Chinese city of Chengdu were locked down on Thursday as authorities raced to snuff out a new Covid outbreak. China is the last major economy wedded to a zero-Covid policy, but at a high economic cost.
- Bankrupt Sri Lanka on Thursday agreed to a conditional $2.9-billion bailout with the International Monetary Fund. The government welcomed the announcement but warned the public that painful economic reforms were still necessary.
- The Bank of Thailand plans to hold a new debt mediation event in an effort to ease swelling household debt and help vulnerable borrowers restructure liabilities amid the uneven recovery. Among debts totalling 14.6 trillion baht, the biggest concern is unsecured loans such as credit cards and personal loans, which represent 23% of the total.
- Asia Plus Securities expects both the US and Thailand to report high August inflation. It estimates an 8.9% rise in US consumer prices, which would prompt the Federal Reserve to lift its key rate by 75 basis points. Thailand is expected to report an 8.6% jump, up from 7.6% in July, which would lead the BoT to raise its rate by 25 basis points at each of its next two meetings.
- Live chicken prices in Thailand have hit a 10-year high of 49 baht a kilogramme, driven by rising meat demand and a rebound in economic activity. Moreover, Saudi Arabia has permitted imports of chicken products from 11 factories in Thailand, including six run by Charoen Pokphand Food (CPF) one by GFPT Plc.
- CP Group is placing a non-binding bid of around 80 billion rupees (36.8 billion baht) for the Indian operations of Metro Cash and Carry, according to a report by The Economic Times. Reliance Retail has also made a bid reported to be around 56 billion rupees.
- Innobic (Asia) Co, the life sciences arm of the oil and gas conglomerate PTT Plc, is seeking a new business partner in Iceland to produce medicines to treat cancer.
- MAI-listed Bluebik Group, a digital transformation firm, aims to build a global presence by diversifying to cybersecurity, blockchain and metaverse offerings. The firm says it expects to commit several hundred million baht to mergers and acquisitions (M&A) and joint ventures over the next five years.
- Thai exports slowed in July from June, due mainly to lower demand in line with a risky global economy. The US dollar value of merchandise exports, excluding gold and after seasonal adjustment, fell 2.7% from the previous month but grew 3.8% year-on-year, the Bank of Thailand said. Annualised growth, however, was down from 10.7% growth in June.
- Pig farmers are calling on authorities to do more to tackle pork smuggling. The Swine Raisers Association of Thailand says smuggled pork is now sold in the market at a much selling for 130-150 baht per kg in local markets, compared to 190-200 baht for locally produced pork.
- True Corporation has entered into an exclusive partnership agreement with the South Korean metaverse platform Zepeto to strengthen its digital ecosystem of telecoms, content and e-commerce. Zepeto, operated by South Korea-based Naver Z Corp, has more than 340 million users worldwide.
- Thailand's fuel consumption for the first seven months grew 13.5% year-on-year for all types except kerosene. Fuel consumption in the transport, industrial and household sectors rose to 151 million litres per day as economic activity picked up and Covid-linked travel curbs eased.
- Kasikornbank is partnering with the e-wallet service provider T2P Co to expand services to corporate customers. Beacon, the bank's venture capital arm, has made a strategic investment in T2P to jointly develop an e-wallet business under the business to business to consumer (B2B2C) model.
- Thaicom is calling on the telecom regulator to adjust draft conditions for the auction of satellite orbital slots as it says reserve prices are still too high and place too much of a burden on operators.
- PTT Plc is preparing to launch Thailand's first hydrogen filling station next month in Pattaya to serve trucks and buses. The 10-million-baht facility is a cooperative venture with Toyota Motor Corp and Bangkok Industrial Gas (BIG), Thailand's largest industrial gas producer.
COMING UP: On Sept 5, China's Services Purchasing Managers' Index (PMI) of Aug will be reported, followed by the EU Manufacturing and Services Index of the same month, together with July retail sales. On Sept 6, the US Institute of Supply Management (ISM) will report PMI and manufacturing PMI and service PMI for August. Sept 20-21, the US' Federal Reserve (Fed) meeting.
- For domestic events: Sept 5, the Commerce Ministry will report Aug inflation. Sept 6, the cabinet is expected to consider the tripartite committee's proposal to lift a minimum wage, while the Council of Exporters releases export updates. On Sept 28, the Monetary Policy Committee (MPC) meets on interest rate.
STOCKS TO WATCH: Finansia Syrus Securities (FSS) says market volatility will pressure tech and growth stocks, as well as those with high price/earnings ratios that have outperformed the market in the past two years. Though some have retreated considerably already, these stocks are expected to have limited recovery potential. Consequently, it recommends focussing on stocks related to economic reopening, consumption and tourism , such as CENTEL, CPN, SC and SISB.
- Other outperformers recommended by FSS are TFG, M and TU, while banks should outperform if the BoT hikes its policy rate by another 25 basis points at its Spot 28 meeting.
- Capital Nomura Securities recommends beneficiaries of the weaker baht in the food and beverage group such as CPF, GFPT, TU, ASIAN, TFG, SAPPE and ICHI; and stocks linked to domestic demand such as ADVANC, TIDLOR, INTUCH, DTAC, CPALL, MAKRO, CRC, HMPRO, ILM, KTC, SNNP, BEC and ONEE.
- For mid- to long-term investment, the broker recommends accumulating SCGP, GPSC, BGRIM, CBG, SCC, TOA, EPG, GULF and SAPPE. High-growth picks are JMT, SINGER, CHAYO, BE8, BBIK and IIG.
TECHNICAL VIEW: Thanachart Securities sees support at 1,600 points and resistance at 1,640. Capital Nomura sees support of 1,604 and resistance at 1,635.
