OPEC OUTPUT-CUT DEAL PROVIDES LIFT FOR EQUITIES
Recap: Global stock markets seesawed last week with news developments. The relief rally that followed the previous week’s Fed meeting ebbed, but Hillary Clinton’s strong performance against Donald Trump in the first US presidential debate cheered investors. Also buoying sentiment was Opec’s surprise agreement to cut oil output, but worries about the health of Deutsche Bank, which faces huge US fines for dodgy business practices, capped gains. The Opec decision helped the energy-heavy Thai stock market recoup some earlier losses.
The SET index moved in a tight band of 1,477.29 to 1,495.51 points before closing on Friday at 1,492.88, down 0.6% from the week before, in modest turnover averaging 39.77 billion baht a day. Foreign investors were net sellers of 2.66 billion baht in shares and retail investors cashed out 567.24 million. Brokers were net buyers of 3.21 billion baht and institutional investors bought 12.94 million.
Big movers: BCPG, the power business arm of Bangchak Petroleum, rose 7% above its 10-baht IPO price on its SET debut on Sept 28 and closed on Friday at 11.30, or 13% above the offering price. BCPG also led in led in turnover and volume. Other most active stocks by turnover were PTT, up 1.8% to 339 baht, and BDMS, falling 3.1% to 21.80 baht. NTV was the top gainer, adding 29% to 49 baht, and U was the top loser, slumping 25% to 0.03 baht.
Newsmakers: Opec surprisingly agreed on a modest output cut of about 750,000 barrels per day to between 32.5 million and 33 million, in the first such deal since 2008, in a move to push up crude oil prices. However, details remain to be worked out next month.
Shares of Deutsche Bank recovered on Friday after plunging 9% earlier on news that it faced US fines of $14 billion for selling dud mortgagebacked securities. Reports on Friday said the lender expected to negotiate the fine down to about $5.6 billion.
The Asian Development Bank (ADB) kept its growth forecasts for developing Asia for this year and next at 5.7%. It said sustained expansion in China and India could steady the region but warned of risks from a looming US interest rate increase. The ADB raised its GDP growth forecast for Thailand to 3.2% this year from 3.0% previously estimated, following a stronger-than-expected first half. Public spending and political stability have also contributed to the revised growth estimate, it said.
The World Trade Organization cut its forecast for global trade growth this year by more than a third, reflecting a slowdown in China and falling imports into the United States. The new figure of 1.7%, down from a previous estimate of 2.8% in April.
Weakness in mining and agriculture could result in Vietnam missing its 6.7% growth target this year. GDP expanded by an estimated 6.4% in the third quarter, compared with 6.9% in the same period last year.
Thailand’s exports unexpectedly expanded 6.5% year-on-year in August to US$18.82 billion, the highest in six months. The surge helped narrow the eight-month contraction to 1.2% yearon-year. However, the August figure reflected low-base effects, as exports in August 2015 contracted 6.7%. The central bank chief also rushed to tamp down optimism, saying careful monitoring of shipments was still needed amid the fragile global recovery.
The economy in the third quarter is expected to expand at a softer pace than the second quarter as temporary stimulus measures lose steam, says a senior Bank of Thailand official. The economy grew 3.4% in the first half.
Kasikorn Research Center has raised its forecast for 2016 economic growth to 3.3% from 3% in anticipation that the momentum built up in the first half will continue. It foresees 3.4% expansion in the third quarter and a decline to 3.2% in the final quarter because of a high-base effect.
The government is seeking to double investment by state enterprises to 600 billion baht next year in a fresh attempt to jump-start private investment, a key engine of sustainable economic growth. Officials have set an ambitious target of state enterprise investment budget disbursement reaching 95% in 2017, said Finance Minister Apisak Tantivorawong.
The Board of Investment (BoI) said the value of new applications submitted during the first eight months of this year rose 21% from the same period last year to 653 billion baht from 1,159 projects because of strong government promotional support.
The Finance Ministry may offer import duty and excise tax exemptions for luxury products in a bid to trigger consumption among high-income earners. The Finance and Commerce ministries are considering a “shopping paradise” project to encourage highincome earners to spend more as part of the government’s stimulus plan, a Finance Ministry source said.
Thailand’s ranking in the Global Competitiveness Index (GCI) 201617 slipped two places from last year to 34th from last year. The annual assessment by the World Economic Forum covers the factors driving productivity and prosperity in 138 countries. Switzerland tops the list for the eighth consecutive year, narrowly ahead of Singapore and the US.
Bangkok Dusit Medical Services Plc (BDMS), the country’s largest hospital operator under the Bangkok Hospital brand, will spend 10.8 billion baht to buy the troubled Nai Lert Park hotel and redevelop the site as a holistic medical centre with a 2-billionbaht investment.
M.K. Real Estate Development Plc will spend 1.2 billion baht from this year to 2018 to develop 135,000 square metres of rental space for warehouses and factories in the Bangkok Free Trade Zone in Samut Prakan.
Coming up this week: Thailand will release September inflation figures today. Also due are Chinese PMI data and the latest Tankan index of business activity in Japan.
The Thai consumer confidence index for September will be released on Thursday.
US non-farm payrolls and unemployment figures for September are due on Friday.
China will release its Caixin Composite PMI for September on Saturday.
Stocks to watch: KTB Securities (Thailand) has buy recommendations for ASEFA, BJC, SMPC, SPALI and SYNTEC, given their growth potential in the second half.
Bualuang Securities recommends investors in the short run focus on defensive plays and stocks with a bright Q3 earnings outlook, such as hospitals, power plants and retailers. Recommended stocks are RJH, TPCH, CKP and TACC.
Technical view: KTB Securities (Thailand) tips support at 1,470 with resistance at 1,520 points. RHB Securities pegs support at 1,440 and resistance at 1,510 points.