PY­ONGYANG KEEPS INVESTORS ON EDGE, BUT SET AD­VANCES

Bangkok Post - - NATIONAL -

RECAP: Fi­nan­cial mar­kets this week kept a ner­vous eye on North Korea fol­low­ing a mas­sive nu­clear test, with a mis­sile launch pos­si­ble to­day as the coun­try cel­e­brates Na­tional Day.

The Euro­pean Cen­tral Bank (ECB) kept its pol­icy rate un­changed at zero in line with ex­pec­ta­tions, while Ja­panese sec­ond-quar­ter GDP was be­low the mar­ket con­sen­sus as pri­vate in­vest­ment slipped.

Lo­cally, the Stock Ex­change of Thai­land (SET) con­tin­ued its climb, sup­ported by for­eign fund in­flows.

The SET in­dex moved be­tween 1,614.30 and 1,647.54 points be­fore clos­ing at 1,635.61, up 1% on the week, in heavy turnover aver­ag­ing 56.82 bil­lion baht a day.

For­eign investors were net buy­ers at 3.43 bil­lion baht, bro­kers bought 2.63 bil­lion and in­sti­tu­tional investors 3.92 mil­lion.

Re­tail investors con­tin­ued to be net sell­ers for the fourth week at 9.98 bil­lion baht.

NEWS­MAK­ERS: US Pres­i­dent Don­ald Trump sur­pris­ingly agreed to a Demo­cratic Party plan to in­crease the debt limit for three months, fund the gov­ern­ment and rush aid to Hur­ri­cane Har­vey vic­tims. The de­ci­sion shocked Repub­li­can lead­ers, who wanted to put off a debt ceil­ing de­ci­sion un­til af­ter the 2018 midterm elec­tions.

The Euro­pean Cen­tral Bank (ECB) raised its euro zone eco­nomic growth fore­cast for this year from 1.9% to 2.2%, the fastest in 10 years. ECB pres­i­dent Mario Draghi said the bank would prob­a­bly make a de­ci­sion about its stim­u­lus mea­sures next month. It is cur­rently buy­ing €60 bil­lion worth of bonds a month.

China has banned in­di­vid­u­als and or­gan­i­sa­tions from rais­ing funds through ini­tial coin of­fer­ings (ICO), say­ing the prac­tice con­sti­tutes il­le­gal fundrais­ing. ICOs have be­come a bo­nanza for dig­i­tal cur­rency en­trepreneur­s, glob­ally and in China, al­low­ing them to raise large sums quickly by cre­at­ing and sell­ing dig­i­tal “to­kens” with no reg­u­la­tory over­sight. Ja­pan’s econ­omy in the sec­ond quar­ter ex­panded by 2.5%, far be­low the ini­tial es­ti­mate of 4.0%, dim­ming hopes for a long-awaited pickup in do­mes­tic de­mand. Malaysia’s ex­ports in July spiked by 30.9%, al­beit against a low base the year be­fore, but of­fi­cials were en­cour­aged by higher ship­ments of man­u­fac­tured prod­ucts and min­ing goods. Grab, the South­east Asian ride-hail­ing ser­vice, is con­sid­er­ing adding an e-wal­let fea­ture for peer-to-peer money trans­fers as it con­tin­ues to grow in Thai­land. Cur­rently, GrabPay in Thai­land of­fers only credit, debit and cash pay­ments. Thai­land’s un­em­ploy­ment rate rose in the sec­ond quar­ter as an in­flux of new grad­u­ates en­tered the labour mar­ket and pri­vate in­vest­ment proved slow. The job­less rate rose to 1.22% or 465,000 peo­ple from 1.08% in the same pe­riod last year. the NESDB said 39% of the unem­ployed had univer­sity de­grees.

The con­sumer con­fi­dence in­dex (CCI) in Au­gust ticked up for the first time in four months on ex­pec­ta­tions of a stronger re­cov­ery driven by ex­port and tourism growth and po­lit­i­cal sta­bil­ity. The Univer­sity of the Thai Cham­ber of Com­merce said the CCI rose to 74.5 from 73.9 in July.

The Bank of Thai­land has fur­ther re­laxed curbs on cap­i­tal out­flows to im­prove op­por­tu­ni­ties for lo­cal investors and money chang­ers and cre­ate a bal­ance of fund flows to weaken the baht. The over­seas in­di­rect in­vest­ment ceil­ing un­der the quota set by the SEC will be lifted to US$100 bil­lion from $75 bil­lion.

Trade vol­ume of gold fu­tures climbed more than twofold last month, buoyed by de­vel­op­ment in gold prod­ucts and geopo­lit­i­cal ten­sions, says the Thai­land Fu­tures Ex­change (TFEX). Gold fu­tures vol­ume was 33,511 con­tracts in Au­gust, up from 8,957 a year ear­lier, with a daily av­er­age of 1,523 con­tracts. Bangkok Bank (BBL) will be­come the first lo­cal bank to of­fer quick re­sponse (QR) code pay­ment for debit cards, un­der a trial be­ing con­ducted in co­op­er­a­tion with the Bank of Thai­land.

COM­ING UP THIS WEEK: China to­day will re­lease Au­gust con­sumer and pro­ducer price in­dices, Malaysia will re­lease July man­u­fac­tur­ing pro­duc­tion data and In­done­sia will re­lease re­tail sales data for July.

China will re­lease Au­gust au­to­mo­bile sales fig­ures to­mor­row and Ja­pan will re­lease pro­ducer price and ma­chin­ery or­der up­dates.

STOCKS TO WATCH: Asia Plus Se­cu­ri­ties rec­om­mends WHA, SCC and UNIQ. In the short term, it sug­gests spec­u­lat­ing on ITD as prof­its could im­prove in the sec­ond half, while in­come has started to beat in­ter­est ex­penses. ITD will im­prove grad­u­ally in the long run but at a lower rate than its peers.

Tisco Se­cu­ri­ties rec­om­mends large-cap stocks in the SET50, namely BANPU, ROBINS, SCB and TPIPL, with SET100 rec­om­men­da­tions iden­ti­fied as GUNKUL, LPN, PLANB, S, STEC, THCOM, BEM, CK, BTS and BTSGIF. For the sec­ond half, it AMA, BEAUTY, CK, JWD, ROJNA and SEAFCO.

TECH­NI­CAL VIEW: DBS Vick­ers sees sup­port at 1,620 and re­sis­tance at 1,650. May­bank Kim Eng Se­cu­ri­ties sees sup­port at 1,620 and re­sis­tance at 1,650.

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