STOCKS DRIFT AS INVESTORS AWAIT SIGNALS FROM YELLEN
Softer oil prices depressed Asian stock markets last week as investors worldwide also awaited cues on interest rates from Federal Reserve Chair Janet Yellen. The Fed chief on Friday indicated conditions were almost right for a move but she did not say when. The Thai stock market moved in a limited range amid a lack of positive factors to drive activity.
The SET Index moved in a range of 1,528.40 to 1,555.88 points before closing on Friday at 1,549.41, up 0.7% on the week, in turnover averaging 53.4 billion baht a day. Institutional investors were net buyers of 872.61 million baht, foreign investors bought 4.42 billion and brokers 1.55 billion. Retail investors cashed 6.84 billion baht out of the market.
KTB led in value, falling 0.5% to 18.90 baht, KBANK rose 1.5% to 198 baht and CPF was down 1.5% to 33 baht. WHA led in volume, advancing 7.1% to 3.62 baht. KOOL was the top gainer, adding 32.1% to 6.50 baht and U, the top loser, tumbling 25% to 0.03 baht.
Japan’s government kept its assessment of the economy unchanged in August but offered a slightly more downbeat view on consumer inflation, as prices slid on weak household spending and the strong yen pushed down import costs. The government also plans a ¥13.5-trilion (US$135 billion) fiscal stimulus package to spur growth.
A rise in exports, higher state spending and private consumption offset weaker investment in construction and equipment, helping Germany grow at a modest 0.4% in the second quarter, after a mild winter helped the economy expand 0.7% between January and March.
Thai exports fell for the fourth straight month in July, with the contraction widening to 4.4% yearon-year from 0.1% in June. For the first seven months, the dollar value of exports is down 2% to $122.55 billion, while imports are off 9.8% to $108.92 billion.
The government will miss its investment budget disbursement target of 87% for the fiscal year ending Sept 30, as only 59.8% had been disbursed as of Aug 19.
Vehicle output in July declined by 7.2% year-on-year to 153,950 units, mainly because of a drop in pickup truck sales at home and abroad, according to the Federation of Thai Industries (FTI). Production from January to July, however, was up 4.2% year-on-year to 1.14 million vehicles. Domestic car sales fell 0.4% to 60,635 vehicles in July after rising for three months, and were off 0.2% to 429,265 vehicles since Jan 1. Exports in the first seven months rose 2.3% to 693,978 vehicles but their value was up 18% to 371 billion baht.
The cabinet has approved several draft economic bills, including one to establish a national holding company to oversee 12 corporatised state enterprises including PTT and THAI.
A draft bill to improve competitiveness includes a “BoI-Plus” programme exempting investments in innovation and high technology from corporate income tax for 15 years. Another draft amendment to the Investment Promotion Act of 1977 would allow the BoI to grant corporate income tax exemptions of up to 13 years, an increase from eight years, and a 50% reduction for five years thereafter.
The Information and Communication Technology (ICT) Ministry is looking to revise the amended satellite concession of Thaicom Plc. The move follows the conviction last week by the Supreme Court of former ICT minister Surapong Suebwonglee for malfeasance after he amended the terms in 2004 to reduce the company’s Thai shareholding limit. Thaicom at the time was part of the Shin Corp empire controlled by Thaksin Shinawatra, the serving prime minister and Surapong’s patron.
Recent gains in the baht could cause the value of Thai canned tuna exports to miss targets this year, says Chanintr Chalisarapong, president of the Thai Tuna Industry Association.
Central Pattana Plc, the commercial property arm of Central Group, will open five new projects and renovate five existing sites between now and 2018, requiring an investment of 60 billion baht.
Siam Cement Group (SCG) has formed a joint venture with Yamato Asia Ltd to invest in a logistics business focusing on small parcel delivery to capitalise on e-commerce and m-commerce growth. SGC subsidiary SCG Cement-Building Materials holds a 65% stake in the 633-million-baht joint venture.
The Thai manufacturing production index for July will be released today.
Euro zone inflation in August and US private-sector employment data are due on Wednesday.
The medical products supplier Techno Medical Plc (TM), which sold IPO shares at 3 baht, will make its debut on the MAI on Wednesday.
A New Growth Strategy, will be held from Aug 31 to Sept 2.
Thai inflation for August and Chinese manufacturing and nonmanufacturing PMI figures are due on Thursday.
South Korean second-quarter GDP and US non-farm payrolls and unemployment for August are to be released on Friday.
Capital Nomura Securities has buy recommendations for ERW, KAMART, BCH and BDMS, as well as BBL, CK, AMATA and DCC. Stocks expected to benefit from a spending recovery are ROBINS, CI, LH and TCAP. Its top picks for the third quarter are SCB, BBL, TCAP, HMPRO, GLOBAL, CPF, GFPT, PYLON, ERW and PSTC.
DBS Vickers Securities (Thailand) recommends high dividend plays — ADVANC, INTUCH, TMT, JASIF, DIF, CPNRF, LHHOTEL, PS, SIRI, SC, BCP and TCAP. The brokerage is also recommending technical picks including SAWAD, WHA, RATCH and TOP.
Bualuang Securities sees support at 1,528 with resistance at 1,575 points. DBS Vickers Securities tips support at 1,500 and resistance at 1,560 points.