RATE CONCERNS LEAD TO CHOPPY TRADE, SET EDGES UP

RECAP: Concerns about inflation and interest rates continued to drive fluctuations in global stock markets this week, but sentiment recovered after the St Louis branch of the Federal Reserve cautioned against raising interest rates too quickly this year.

On the domestic front, the SET index moved in a range of 1,787.70 and 1,819.36 points before closing at 1,808.06 points, up 0.2% from the previous week, in heavy trade averaging 64.32 billion baht a day.

Foreign investors continued to be net sellers of 3.78 billion baht, with brokerage firms selling 2.73 billion and institutional investors 15.22 billion. Retail investors were net buyers of shares worth 21.73 billion baht.

NEWSMAKERS: The final version of the Trans Pacific Partnership trade deal, minus the United States, was released on Wednesday. More than 20 provisions have been suspended or changed ahead of the official signing in March, including rules on intellectual property originally included at the behest of Washington.

The US Federal Reserve is preparing for stronger-than-expected economic growth this year, a view that boosts the case for higher interest rates, according to minutes of its January policy meeting. But some policymakers remain doubtful that the gains will appear in the form of rapid inflation and higher wages. David Malpass, the US Treasury undersecretary for international affairs, stepped up his criticism of Chinese economic policies, accusing Beijing of “patently non-market behaviour” and saying Washington needed stronger responses to counter it.

South Korea signed a free trade deal with five Central American countries on Wednesday, even as Seoul and Washington spar over their existing free trade agreement. Singapore has declared that businesses providing digital services, such as the streaming of entertainment content, will have to pay the Goods and Services Tax from Jan 1, 2020. The government expressed confidence in the economic outlook after official data showed Thai GDP in 2017 expanded by 3.9% year-onyear, the strongest growth in five years, driven by robust exports and tourism. Officials are also upbeat about export prospects after figures for January showed the strongest expansion in more than five years. The Commerce Ministry said the dollar value of exports rose 17.6% year-on-year to US$20.1 billion. The Securities and Exchange Commission (SEC) will introduce regulations to supervise initial coin offerings (ICOs) and cryptocurrency in March, and has reiterated its warning that investment in such financial instruments carries hefty risks, especially for small investors. The SET board of governors on Wednesday selected Pakorn Peetathawatchai as the bourse’s 13th president, effective from June 1, succeeding Kesara Manchusree.

Thai bond yields have not increased significantly, although capital movements have become more volatile, says Theeraj Athanavanich, a bond market adviser to the Public Debt Management Office. Fundraising costs in the domestic market remain attractive, given high financial liquidity, he said.

The Thai Industries Sentiment Index has hit a 36-month high after three months of continuous growth, driven by optimism about state megaprojects, economic stimulus measures and increasing consumer confidence, says the Federation of Thai Industries. Landlords who lock in bumper profits from selling land near transport infrastructure projects can be exempt from the land windfall tax if they buy and sell the same plot during the same four-year implementation period of Treasury Department appraisal prices, according to a tax expert at the Fiscal Policy Office. PTT Plc has acquired an additional stake in the petrochemical producer IRPC from the Government Savings Bank for 13.8 billion baht after seven years of negotiations. The transaction, at 7.10 baht per share, will enlarge PTT’s holding to 48% from 35%.

COMING UP: Japan will release economic indicators for December on Monday, with the UK set to release home prices for February. Elsewhere, US new home sales and a manufacturing index update for January will be released the same day. On Tuesday, the EU will release final consumer and business confidence figures for February, while the US will release wholesale inventories and durable goods orders for January, the production index for February and the home price index for December. Japan will release January retail sales data on Wednesday, and China will release the purchasing managers’ index for February. The EU will release initial consumer price data for February, while the US will release the second estimate of Q4 2017 GDP, along with pending home sales for January.

On Thursday, China, the EU, France, Germany, the UK and the US will all release purchasing managers’ index updates for February. Japan will release its consumer confidence index for February.

STOCKS TO WATCH: DBS Vickers Securities suggests stocks with good fundamentals, including AMATA, IVL, KKP and ERW. High-dividend yield stocks are KKP, LH, PSH, LALIN, SENA, TMB, MODERN, BCP, MC, SNC, DIF, CPNREIT and LHHOTEL.

Asia Plus Securities recommends domestic plays such as WHA and BJC, while suggesting high-dividend stocks including SIRI and INTUCH, with global plays including PTTEP and PTT.

TECHNICAL VIEW: Finansia Syrus Securities sees support at 1,780 points and resistance at 1,823. KTB Securities sees support at 1,780 points and resistance at 1,820.