OIL PRICE SLUMP HAMMERS GLOBAL SHARES AND SET
Recap: Weak trade data from China and sagging crude oil prices sent global stock markets, emerging markets in particular, into a tailspin last week. As well, investors were unloading shares ahead of this week’s US Federal Reserve meeting, which is expected to end with the first interestrate increase in nine years.
The Thai stock market, on which energy and petrochemical shares carry an outsize weighting, struggled amid a sell-off and slipped below 1,300 points in a week that featured two holidays. The SET Index moved in a range of 1,324.61 and 1,278.30 points and closed at 1,280.92, down 4% from the preceding week, in brisk turnover averaging 39.77 baht a day.
Foreign investors were net sellers of 3.4 billion baht and institutional investors sold 2.21 billion more than they bought. Retail investors were net buyers of 5.15 billion baht and brokers bought 454.99 million.
Big movers: Star Petroleum Refining (SPRC) closed 11.1% below its 9-baht IPO price at 8 baht on its first day of trade on Tuesday, and finished the week at 8.50 baht. TKN, which entered the market two weeks ago, was the top gainer and led in trade volume, and was the second most active in value last week. The stock jumped 40.9% to 8.45 baht. Top loser TSR slid 24.7% to 5.95 baht. CPALL led in turnover, down 2.9% to 41.75, followed by PTT, sinking 12.7% to 220 baht.
Newsmakers: China’s trade performance remained weak in November, casting doubt on hopes that the world’s second-largest economy would level off in the fourth quarter and spelling more pain for its major trading partners. Exports fell a worse-than-expected 6.8% from a year earlier, their fifth straight month of decline, while imports tumbled 8.7.
Japan’s economy dodged recession in the third quarter with the initial estimate of a contraction revised to an annualised expansion of 1.0%, offering a glimmer of hope for policymakers. The key composite index of economic indicators rose for the second straight month in October, as industrial output and exports have shown signs of recovery.
Vietnam expects disbursed foreign direct investment (FDI) to reach a record high this year after the government eased business regulations, luring investors seeking to benefit from the Trans-Pacific Partnership (TPP) trade pact. Disbursed FDI in 2015 should be about $14 billion, $1.5 billion more than last year, while pledged FDI is forecast to increase over last year’s $21.9 billion.
Myanmar officially launched its first modern bourse last week, but without a single stock to trade until next year. Maung Maung Thein, head of the Myanmar Securities and Exchange Commission, said six local firms had been approved to list but they would have to wait until February or March to begin trading.
The Thai government breathed a sigh of relief after Thai Airways International and MJets were spared bans in an audit by the European Aviation Safety Agency (EASA). The two are the only Thai-registered airlines operating flights to Europe.
Mass-market fourth-generation (4G) wireless broadband service will add up to 1 trillion baht to the economy over the next five years, according to the National Broadcasting and Telecommunications Commission (NBTC). The regulator’s study said the contributions would include 119 billion baht to the telecom business, another 114 billion for the macroeconomy, 284 billion in the capital market and financial investments, and 109 billion in mobile transactions.
The draft land and buildings tax is now expected to be presented for cabinet approval by 2017 with rates that would be more acceptable to the public, says Somchai Sujjapongse, the permanent secretary to the Finance Ministry.
The cabinet last week approved the Orange Line rail development project linking the Thailand Cultural Centre to Min Buri. The 95.1-billionbaht rail route is scheduled to start carrying passengers in August 2022.
Italian-Thai Development (ITD), which has agreed to develop the Dawei megaproject in Myanmar, is to request a bigger investment budget from the Thai and Myanmar governments soon. The company plans to enhance infrastructure linked to Dawei, including expanding the 132-kilometre road from Phu Nam Ron village in Kanchanaburi to the deep-sea port in Myanmar.
The 7-Eleven operator CP All Plc is coming under increasing pressure from investors who are questioning the company’s corporate governance policy its board took no action against executives found guilty and fined for insider trading. Four CP All executives were fined by the Securities and Exchange Commission for using inside information to purchase shares of Siam Makro Plc ahead of the company’s announcement that it would buy the cash-and-carry business at an above-market value price.
Coming up this week: The cabinet tomorrow will discuss the proposed Thailand Future Fund, which pools all of the government’s infrastructure investment projects. Taking place the same day is the auction of 4G licences on the on 900-MHz bandwidth, and a draw among qualified bidders for the rights to operate solar power plants with a total of 600 MW in capacity.
The Bank of Thailand’s Monetary Policy Committee (MPC) will meet on Wednesday but few expect any move in the policy interest rate. Wednesday is also the first trading day for AMATAAV (IPO price at 7.5 baht).
The Federal Open Market Committee meets tomorrow and Wednesday with a decision to be announced around 2am Thursday Thailand time.
Stocks to watch: Krungsri Securities recommends sectors with growth potential such as tourism, hospitals, construction and renewable energy. Its picks are SAWAD, GUNKUL, AOT, EPG, CI, CK, STEC and PREB.
Finansia Syrus Securities has buy recommendations for CK, BMCL and BECL. UOB Kay Hian Securities recommends CK, BECL, BMCL and TRUE.
Technical view: Krungsri Securities sees immediate support at 1,280 and resistance at 1,320 points. KGI Securities puts support at 1,260 with resistance at 1,300 points.