SET RALLIES ON TRADE OPTIMISM AFTER CHOPPY WEEK

RECAP: Sentiment in global markets was mixed on Friday, with Philippine and Thai stocks the top regional gainers, as investors looked forward to a meeting between Donald Trump and Xi Jinping that might help ease US-China trade tensions.

The SET index moved this week in a range of 1,598.57 and 1,640.53 points before closing at 1,622.10, down 0.8% from the previous week, in low turnover averaging 37.1 billion baht a day.

Foreign investors were net sellers of 4.35 billion baht and brokerage firms sold 1.1 billion worth of shares. Retail investors were net buyers of 5.2 billion baht and institutions bought 202.7 million.

NEWSMAKERS: The euro and sterling rose against the dollar early yesterday after Britain and the EU agreed on a draft text for Brexit that they described as “ambitious, broad and deep”. However, eleventh-hour objections from Spain over the status of Gibraltar have created a new element of drama ahead of an EU summit on Sunday.

The World Trade Organization has agreed to hear complaints from a range of countries over new US steel and aluminium tariffs, as well as complaints from Washington over retaliatory duties by China and others.

In an unprecedented move, the European Commission has taken the first step towards sanctioning Italy over its big-spending budget. Italy, however, says it would stick to its fiscal goals.

Carlos Ghosn has been ousted after nearly two decades at the helm of the Japanese carmaker Nissan, following allegations of financial misconduct. He has been accused by Nissan of under-reporting his salary and using company assets for personal use. Finance Minister Heng Swee Keat has been named first assistant secretary-general of the People’s Action Party, the perennial governing party of Singapore. This paves the way for him to succeed Lee Hsien Loong as prime minister sometime after the next election, which must be held by 2021 but could come sooner.

Indonesia plans to cut taxes on luxury properties and revise other tax rules in a bid to support the real estate industry and attract investment. Thailand recorded zero GDP growth in the third-quarter from the previous quarter, surprising forecasters, as exports and tourism cooled. It was the weakest performance since the first quarter of 2014.

Thailand welcomed 2.71 million visitors in October, down 0.5% year-on-year, as Chinese arrivals fell 20%. The figures suggest the fallout from the Phoenix tour-boat tragedy in July is far from over.

Thai exports bounced back in October, boosted by higher shipments of fuel, gold, petrochemicals and agricultural products after September’s surprise decline of 5.2% year-on-year, the first dip in 19 months.

Bank of Thailand governor Veerathai Santiprabhob has signalled an imminent increase in the policy interest rate, saying higher rates will not be an impediment to economic growth and the need for ultra-loose monetary policy is less important.

The Board of Investment has approved new incentives to make next year “the golden year of investment”. The changes include a 50% reduction in corporate income tax for an additional three years after the tax holiday for investment projects worth more than 1 billion baht, excluding land and working capital.

The SET Index is projected to reach 2,000 points in 2019 if tensions over geopolitics and trade wars ease, and the election proceeds without conflict, says Tisco Securities.

The first depository receipt listed on the SET will be an exchange-traded fund of blue-chip stocks listed on the Ho Chi Minh City Stock Exchange, issued by Bualuang Securities. An amended law governing asset management companies will allow them to acquire bad assets related to credit cards and personal loans from non-bank financial institutions, says a Finance Ministry source.

The Federation of Thai Industries has increased its projection for the country’s automotive output in 2018 to 2.1 million units after reporting huge growth in domestic sales.

Bank of Ayudhya (BAY) aims for a 25-30% increase in revenue from investment banking next year. The country’s fifth-largest bank by assets has five merger and acquisition deals in the pipeline.

Mobile leader Advanced Info Service (AIS) carried out 5G demonstrations on the 26GHz spectrum on Thursday, the first in the country.

SET-listed Siamgas and Petrochemicals Plc (SGP), the country’s second-largest liquefied petroleum gas (LPG) trader, expects 2019 revenue to grow by 8-10% on sales volume of 3.86 million tonnes. November consumer confidence on Tuesday. Germany will release December consumer confidence on Wednesday and the US will announce the second reading of Q3 GDP, October trade figures and new home sales.

Germany will release November unemployment and inflation on Thursday and the US will announce October personal income and consumer spending.

On Friday, the US Federal Reserve will release the minutes of its last policy meeting. Japan and the euro zone will announce October unemployment, and China will release November manufacturing and services data. Brazil, India and Canada will announce Q3 GDP figures.

STOCKS TO WATCH: Tisco Securities recommends stocks with better-than-expected Q3 earnings as BDMS, BLA, CK, DOD, HANA, MAJOR, NYT, SEAFCO, STEC and SVI. An expected increase in the policy interest rate should help BBL, KBANK, TMB and BLA.

Asia Plus Securities recommends accumulating domestic plays including CPALL and BJC, with ADVANC and DTAC in the ITC sector. Among basic utilities, it recommends EASTW and TTW.

TECHNICAL VIEW: Tisco Securities sees support at 1,585 points and resistance at 1,635. DBS Vickers Securities Thailand sees support at 1,590 and resistance at 1,620.