US POLITICS DENT SENTIMENT BUT ENERGY SHARES LIFT SET

Recap: Asian stock markets retreated in response to a ballooning political crisis in Washington, with reports that President Donald Trump tried to interfere with an investigation into his campaign’s links with Russia before firing his FBI chief. The Thai stock market outperformed a bit as buying in heavyweight energy stocks offset a selling spree in banks expected to be hurt by lending rate cuts.

The SET index moved in a range of 1,531.68 and 1,552.65, before closing at 1,549.64, up 0.4% from the previous week, in heavy turnover averaging 43.6 billion baht a day. Foreign investors were net sellers of 2.1 billion baht, and brokers cashed out 1.78 billion. Retail investors were net buyers of 2.09 billion baht and institutional investors bought 1.89 billion.

Big movers: EARTH led in turnover and volume, adding 15.2% to 2.28 baht. BDMS was the second most active by value, dipping 12.1% to 18.20 baht, and AOT was up 0.6% to 41.75 baht. Top gainer ASIAN surged 34.9% to 8.50 baht and top loser MALEE slid 48.1% to 53.25 baht.

Newsmakers: Americans have now borrowed more money than they had at the height of the credit bubble in 2008, just as the global financial system began to collapse. The Federal Reserve Bank of New York said total household debt in the US reached a new peak of $12.7 trillion in the first three months of the year.

China’s growth took a step back in April after a surprisingly strong start to the year, as factory output, investment and retail sales all slowed as authorities clamped down on debt risks. As well, foreign direct investment fell 4.3% after rising 6.7% in March. FDI for the first four months of the year was off 0.1% year-on-year to 286.41 billion yuan ($41.6 billion).

Japan has posted its longest economic expansion in over a decade, with GDP rising for a fifth consecutive quarter. Growth was 0.5% from the previous quarter and 2.2% from a year earlier.

The Philippine economy grew by 6.4% in the first quarter, its slowest pace since Q4 2015, on weaker state spending, but exports and consumption remained strong, suggesting interest rates could rise later this year.

S&P raised Indonesia’s credit rating to investment grade. The sovereign rating was lifted to BBB- from BB+ with a stable outlook, sending stocks in Jakarta to a record high.

Thailand’s economy in the first quarter expanded at the fastest pace in three quarters, driven by recovering exports, an improving farm sector and rising private consumption. But the National Economic and Social Development Board (NESDB) narrowed its 2017 GDP growth outlook to between 3.3% and 3.8% from the 3-4% range forecast in February, as private investment remains weak. First-quarter GDP grew by 3.3% year-on-year, accelerating from 3% in the previous quarter.

The country’s four largest commercial banks have cut their prime lending rates, effective today, with a focus on the minimum retail rate (MRR), in a range of 25-50 basis points, after Finance Minister Apisak Tantivorawong complained that small borrowers were being charged too much. Bangkok Bank (BBL), Krungthai Bank (KTB) and Kasikornbank (KBANK) cut their MRR — a rate for individual and small-business borrowers — by 50 basis points, while Siam Commercial Bank (SCB) trimmed its MRR by 25 points. SCB also cut its minimum lending rate (MLR) and minimum overdraft rate (MOR), by 25 points.

Non-performing loans (NPL) held by commercial banks are expected to peak in 2017 as the recovery that began last year gains hold, says the Bank of Thailand. The gross NPL ratio at the end of March was 2.94%, up from 2.83% at the end of 2016.

Domestic car sales surged in April despite the long holidays, driven by launches of new models, the motor show and higher crop prices. The Federation of Thai Industries (FTI) said domestic sales rose 15.1% year-onyear to 63,267 units, but were down from 84,801 in March.

PTTEP aims to produce at least 300,000 barrels of oil equivalent per day (boed) to maintain earnings and meet strong demand. This level is around 6% below the output of 320,000 boed in 2016 as the company plans to increase production at certain sites to offset declining output at ageing fields that require upgrades.

The Department of Special Investigation said it had sufficient evidence to press charges against Land & Houses property tycoon Anant Asavabhokin for money laundering in connection with the Klongchan Credit Union Cooperative embezzlement scandal.

Banpu Plc posted a Q1 net profit of US$41 million (1.42 billion baht), reversing a net loss of $5.2 million a year earlier, amid rising coal prices and improved revenue from the power business.

Central Pattana Plc (CPN), known mainly for retail development, will set aside 11 billion baht to develop residential projects from 2017-20.

Minor International Plc (MINT), a hospitality and food company, is developing three luxury projects in Phuket to be completed by 2020.

Central Plaza Hotel Plc (Centel) posted a 3.3% rise in Q1 net profit to 783 million baht, with revenue up 0.3% to 5.32 billion.

Coming up this week: US new home sales in April will be reported tomorrow.

The Bank of Thailand’s Monetary Policy Committee will meet on Wednesday, with expectations that it will leave its 1.5% interest rate unchanged. The US Federal Reserve releases minutes of its last meeting on the same day.

The Bank of Korea will meet on Friday, and the US will release revised first-quarter GDP figures.

Stocks to watch: Tisco Securities expects stocks that will be added to the SET50 index in the second half this year are EA, BPP and MTLS, and new SET100 entrants will be BCPG, WORK and MEGA. Five Thai stocks — BCPG, BIG, FSMART, PTL and THANI — are expected to be added to the MSCI Small Cap Index, while those expected to show strong growth in 2017 net profit are BTW, MALEE, ORI, ROJNA, SUPER, THANI, WICE and PTG.

Thanachart Securities recommends selective buys in high-growth stocks such as LIT, SAWAD, MTLS and WORK. For those with a timeline of 6-12 months, the broker recommends BEAUTY, CPALL, ESSO, KBANK, MC, STA, SUSCO, TMB and WORK.

Technical view: DBS Vickers Securities (Thailand) tips support at 1,530 and resistance at 1,560 points. Capital Nomura Securtities sees support at 1,528 with resistance at 1,566 points.