GOING PRIVATE

Muang Thai Life Assurance plans to apply for a licence to operate a private fund business, fulfilling the firm’s ambition.

RECAP: Most Southeast Asian and European stock markets closed lower yesterday, as a report on internal opposition in Washington to a tariff rollback on Chinese goods trumped optimism about the possibility of an interim trade deal.

The SET index moved in a range of 1,600.95 and 1,642.50 points before closing at 1,637.85, up 2.8% from the previous week, in heavy trade averaging 59 billion baht a day.

Institutional investors were net buyers of 11.6 billion baht and brokerages bought 778.9 million. Retail investors were net sellers of 10 billion baht and foreign investors offloaded 2.4 billion baht in shares.

NEWSMAKERS: The first open impeachment hearings into US President Donald Trump will begin on Wednesday, as the process begun by the Democrat-led House of Representatives heads into a highly anticipated public phase.

India has decided not to join the Regional Comprehensive Economic Partnership, dealing a blow to the 16-country China-backed deal at the end of the Asean summit in Bangkok. The remaining 15 countries now expect to have a deal ready to sign by February. The United States on Monday formally notified the United Nations that it was withdrawing from the Paris climate accord, making the world’s largest economy the sole outlier from the agreement. Chinese President Xi Jinping has expressed a “high degree of trust” in Hong Kong’s unpopular leader Carrie Lam as the two met after months of increasingly violent protests in the city. President Hassan Rouhani said Iran would resume uranium enrichment at an underground plant south of Tehran in its latest step back from a troubled 2015 agreement with major powers. Saudi Aramco has confirmed a plan to list on the Riyadh stock exchange, in what could be the world’s biggest initial public offering (IPO). The state-owned oil giant will determine the share price after gauging interest from investors. The Japanese giant SoftBank Group suffered an operating loss of US$6.4 billion in the second quarter as its investments in WeWork and Uber took a massive hit. The Bank of Thailand has relaxed regulations related to exporters’ foreign currency proceeds and foreign securities investment to encourage capital outflows to rein in the rising baht. The central bank on Wednesday cut its policy interest rate to a record low of 1.25% to help economic growth prospects and support a targeted increase in headline inflation.

Five-year government bond yields are expected to fall in November and December because of the recent central bank rate cut, says the Thai Bond Market Association.

US Secretary of Commerce Wilbur Ross downplayed the recent US decision to remove Generalized System of Preferences (GSP) tariff exemptions on US$1.3 billion in Thai exports. Speaking in Bangkok, he called the amount “trivial” and said there was still time for negotiations before the changes take effect in April.

Moody’s Investors Service said the looming loss of US trade privileges would be credit-negative for Thailand amid a challenging external environment.

Thailand’s strong macroeconomic fundamentals give policymakers space to use both fiscal and monetary policy to drag the economy out of the doldrums, according to the new IMF chief. The country needs to take care of the economy by using all available tools in a timely manner, Kristalina Georgieva told Finance Minister Uttama Savanayana. Exporters are maintaining their forecast for outbound shipments to contract by 1.5% this year, blaming the slowing world economy, the protracted trade war and the stronger baht. Alternating drought conditions and flooding in northeastern Thailand are expected to cut paddy production in the region in the 2019-20 crop year by 488,000 tonnes.

Despite a spate of government stimulus measures, consumer confidence remained weak in October as the public fretted about the tepid economy, political instability, shrinking exports, low farm prices and global uncertainty stemming from trade wars and the Brexit impasse, as well as the US suspension of tariff preferences.

Local property developers are preparing to stage a joint promotional campaign with the Finance Ministry to stimulate the market before the year-end. Thailand’s English proficiency has fallen for the third year in a row, according to the annual English Proficiency Index conducted by the global education company EF Education First. The country ranked 74th out of 100 countries. Salaries in Thailand are estimated to grow at a stable rate of 5% this year, according to Mercer Thailand. Its survey of 607 companies in various industries found the automotive industry had the highest projected salary increase at 5.5%, while the high-tech industry had the highest involuntary turnover rate at 7%. B.Grimm Power Plc and Gulf Energy Development Plc are looking at Vietnam for new liquefied natural gas projects as a result of the Thai government failing to open its LNG market. Bangchak Corp (BCP) is entering the synthetic biology business to tap into the fast-growing industry with potential applications in medicine, manufacturing and agriculture.

Thai Union Group Plc (TU), the global seafood conglomerate, reported a 20.6% year-on-year plunge in third-quarter net profit as sales were affected by baht appreciation.

Muang Thai Life Assurance Plc is adding property to its investment portfolio, spending 3.8 billion baht to construct an office building aiming for higher returns to match long-term insurance liability obligations amid the low interest-rate environment.

COMING UP: Britain will release preliminary third-quarter GDP and October trade figures on Monday, with Russia releasing preliminary Q3 GDP the same day. On Tuesday, Australia will release October business confidence and Britain will announce October unemployment benefits claims. Germany will release the November ZEW economic sentiment index and Australia will release November consumer confidence, while Germany, Britain and the US will announce October inflation data. On Thursday, Australia will release October unemployment, Germany will announce preliminary Q3 GDP and the euro zone will release revised Q3 GDP. US October retail sales are due on Friday.

STOCKS TO WATCH: Tisco Securities recommends stocks poised to benefit from an upward revision in Thailand’s credit rating outlook such as BBL, KBANK, SCB, KTC and MTC. Firms expected to report good Q3 earnings include AMATA, BTS, CBG, CHG, EPG, ERW, GPSC, INTUCH, JWD, MINT, MTC, PLANB, PRM, SPALI, SSP, TRUE and WHA. Defensive stocks to hedge against global trade tensions are AOT, BTS, BEM, BDMS, CPALL, BJC, CPNREIT, QHPF, WHART, DIF, JASIF and TFFIF.

Capital Nomura

Securities forecasts stocks to be included in the sustainable equity fund, which will replace long-term equity funds (LTF), will include PTT, AOT, ADVANC, CPALL, CPF, SCB and BBL.

Technical view: Maybank Kim Eng Securities Thailand sees support at 1,620 points and resistance at 1,670. RHB Securities Thailand sees support at 1,580 and resistance 1,670.