STOCKS DRIFT IN THIN TRADE, CHINA LEADS ASIA LOWER

Recap: Global stock markets traded thinly last week as geopolitical tensions rose after Turkey downed a Russian plane that entered its territory from war-torn Syria. Wall Street was subdued because of the Thanksgiving holiday on Thursday and a shortened session on Friday. European markets were little changed as investors awaited word this week on whether the European Central Bank would extend its stimulus measures.

Most Asian stocks slumped in line with Chinese shares which posted their biggest weekly drop in more than three months. The decline in China came amid a 4.6% drop in profits among big industrial firms, and signs that regulators plan a further clampdown on leveraged buying. Some speculated that further devaluation of the yuan may occur.

The Stock Exchange of Thailand moved sideways down as investors fretted about the impact of sky-high 4G auction bids on ICE sector earnings. The SET Index moved in a range of 1,359.96 and 1,401.77 points and closed at 1,363.13, down 2.1% from the previous week, in low turnover averaging 30.33 billion baht a day.

Foreign investors were net sellers of 1.82 billion baht and local institutional investors sold 3.41 billion baht. Brokers were net buyers of 1.39 billion baht and retail investors bought 3.38 billion.

Big movers: JAS led in value and volume, down 6.8% to 4.80 baht. INSURE was the top gainer, rising 23.7% to 60.00 baht. Top loser AJD slid 20.25% to 1.26 baht.

Newsmakers: The Finance Ministry said it was confident that stimulus measures and infrastructure spending would push 2016 GDP growth to 3.8%. Six projects worth 180 billion baht will formally start this year, with 130-140 billion actually being injected into the economy in 2016.

The Information and Communications Technology Ministry is setting aside 170 million to help fund tech startups next year, saying it wants the government to promote an environment conducive to startups.

Exports fell for the 10th straight month in October, while the Commerce Ministry again blamed tepid global demand and plunging oil prices and volatile foreign-exchange rates. Export value fell 8.1% year-on-year to $18.6 billion, and over the first 10 months exports were down 5.3% to $180 billion.

The energy drink maker Carabao Group Plc (CBG) expects its 30-million-pound sponsorship deal with Chelsea Football Club to help it become a global brand and increase export sales to 50% of its total by 2018 from 30% last year. CBG will spend 500-600 million baht to double production capacity to 700 million cans a year and will study opening a factory in Belgium. This year it expects revenue of close to 8 billion baht, up from 7.57 billion in 2014.

The Excise Department expects a new vehicle excise tax based on carbon dioxide emissions will raise tax revenue by 5-10 billion baht in 2016, with the amount decreasing gradually as automakers reduce emissions. New taxes starting next year will be based on emissions, E85-gasohol compatibility and fuel efficiency rather than engine size, with the tax at 30% for passenger cars with CO2 emissions of 150g/km or lower. Those with higher emissions will pay more.

Deputy Finance Minister Wisudhi Srisuphan said he expected 670 billion baht to be invested in transport projects over the next two years, out of the 1.9-trillion-baht long-term plan, under both public-private partnership (PPP) agreements and the regular budget.

The cabinet has approved a Biosafety Bill that legalises all genetically modified plants and animals, except those used for medicinal experiments on humans and certain animals. The bill is strongly opposed by environmental activists and smallscale farmers. The latter fear they will be put out of business by big agribusiness groups and that their crops could be harmed by the spread of GM materials.

EGCO is looking at new power capacity from both fossil fuels and renewable sources in five Asian countries (China, India, Malaysia, Myanmar and Vietnam), as the domestic power market faces intense competition and has minimal potential for more large power plants. The company has a capex budget of 91 billion baht to expand generating capacity to 5,515 MW by 2020, up from 3,800 MW at present, which 42 billion baht for overseas investment.

A TRUE subsidiary handed over 20.5 billion baht as the first installment of its 4G licence payment to quash rumours that it could not afford to make good on its costly winning bid. It still has to provide bank guarantees for the second and third installments before it will receive the licence. Meanwhile, True Move said it would continue its 2G-1800MHz service to avoid inconveniencing its 43,000 remaining customers who have yet to switch to another network.

Having learned some lessons from its two-day marathon 4G auction earlier this month, the NBTC will schedule two sessions, from 9am to 9pm and midnight to 6am, for the next auction starting on Dec 15. As well, it has approved a plan to set reserve prices for further auctions next year closer to the recent winning bids in the 1,800-MHz auction.

Deputy premiers Prawit Wongsuwon and Somkid Jatusripitak will travel to China shortly for talks with Chinese officials on funding for Thai-Chinese rail projects, with the aim of securing interest rates more favourable than the 2.5% Beijing is now quoting.

China has fended off systemic risks in its financial markets and will continue to push ahead with market reform, Premier Li Keqiang said last week. Li said that China will further open its capital markets both to inbound and outbound investors. He also said that China will step up efforts to prevent illegal cross-border capital flows.

Coming up this week: Thailand will release the October business confidence index today. Also due are Japanese manufacturing production and retail sales for October, and US pending home sales and retail sales.

China and euro zone manufacturing PMI data and US manufacturing figures will be released tomorrow. Due Wednesday are euro zone inflation and unemployment data and US nonfarm payrolls.

Fed Chair Janet Yellen will appear before a joint committee of Congress to discuss the US economic outlook on Wednesday.

The beverage producer and distributor T.A.C. Consumer Plc (TACC) will enter the MAI on Wednesday at 2.88 baht. The snack maker Tao Kae Noi Food & Marketing Plc (TKN) will begin trading on the SET on Thursday at the IPO price of 4 baht.

Stocks to watch: Krungsri Securities has buy recommendations for AOT, EPG, TPCH, GUNKUL, CK and SAWAD. KT Zmico recommends CK, ITD, STEC, CENTEL, MINT and AOT.

Technical view: KT Zmico sees support at 1,342 and resistance at 1,376. Bualuang Securities sees support at 1,340 and resistance at 1,380.