NEW SPIKE IN VIRUS CASES RATTLES INVESTORS

RECAP: Several Asian stock markets closed lower yesterday as investors reassessed the impact of the Covid-19 outbreak after a change in the reporting method in China revealed a spike in cases.

The SET index moved between 1,522.97 and 1,542.76 points and closed at 1,526.30, down 0.6% from the previous week, in turnover averaging 53.92 billion baht a day.

Brokerage firms were net buyers of 1.8 billion baht, retail investors bought 855.9 million and institutional investors purchased 380.5 million worth of shares. Foreign investors were net sellers of 3 billion baht.

NEWSMAKERS: The worldwide death toll reached 1,383 yesterday with reported cases totalling 64,448 as the Covid-19 virus continues to spread, while Japan finds new infections on cruise ship and Chinese Grand Prix postponed amid the prolonged pandemic. Chinese consumer prices in January rose by 5.4%, the most in more than eight years, as the coronavirus drove up demand for consumer goods and shuttered business activity in parts of the country.

The wireless industry scrapped its biggest annual showcase after the coronavirus outbreak sparked an exodus of participants. It was the first cancellation in the 33-year history of the Mobile World Congress, which normally draws more than 100,000 participants to Barcelona.

The Singapore Airshow, Asia’s biggest aerospace event, went ahead on Tuesday, even as the coronavirus continued to hammer the aviation industry and some 70 exhibitors had pulled out because of health concerns.

The Japanese technology investor SoftBank Group said its net profit plunged nearly 70% for the nine months to December as investments in companies such as WeWork and Uber took a hit.

The Japanese carmaker Nissan has filed a civil lawsuit against former chairman Carlos Ghosn. seeking US$90 million in damages because of the fugitive executive’s alleged misdeeds.

Airbus on Thursday reported a net loss of €1.36 billion in 2019 after being hit by a €3.6-billion fine over a bribery scandal and extra development costs for the A400M transport aircraft.

Investor confidence in Thailand for the three months through April has fallen into bearish territory for the first time in four years, amid a grim tourism outlook and geopolitical tensions.

Business confidence fell for the 11th straight month in January, with the virus outbreak adding to concerns. The impact of Covid-19 could lower Thailand’s nominal GDP by between 0.09% and 0.13% if the outbreak lasts longer than three months but less than six months, says Kasikorn Research Centre. Tourism officials are again proposing visa-free entry for Chinese citizens as part of a tourism revival scheme, as the central bank and others forecast economic growth could fall below 2% this year.

Hotels are cutting back on staff in response to weaker demand from Chinese guests, especially on Ratchadaphisek Road in

Bangkok and in Pattaya.

The government has approved emergency relief for the domestic Mice (meetings, incentives, conventions and exhibitions) industry after international meetings declined by almost 50% due to the Covid-19 outbreak.

Thailand is at risk of falling to third place on the world rice export table behind India and Vietnam, the Thai Rice Exporters Association warns. Drought, weaker competitiveness and a lack of rice varieties to meet changing market demand could push shipments down to 7.5 million tonnes, the lowest since 2013, it said.

Global sugar prices have surged 12% this year to a two-year high as drought has cut shipments from Thailand, the world’s second-biggest exporter. Early indications are for a small harvest in the next crop year starting in October as well.

Only 25 billion baht of the state investment budget was disbursed in the first three months of fiscal 2020, as the months-delayed 3.2-trillion-baht budget bill has yet to be enforced, said a Finance Ministry source.

The cabinet is expected to decide by April or May whether Thailand will join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the treading bloc of 11 Pacific Rim nations excluding the US.

The Bank of Thailand is preparing new guidelines to regulate the way financial institutions calculate fees for a host of products and services in the third quarter as part of a push for a fairer fee structure. Land prices in the fourth quarter of 2019 resumed double-digit growth as developers fled the oversupplied condo market and chased plots to develop more low-rise housing projects.

Total Access Communication (DTAC) is at risk of losing a large chunk of high-end postpaid subscribers after the 5G auction tomorrow as it plans to bid only for the 26-gigahertz range only, says Kasikorn Securities.

SET-listed developer Property Perfect (PF) plans to sell assets worth a combined 10 billion baht to reduce debt as the property market slows down.

BCPG Plc, the renewable power arm of Bangchak Corp, has taken over Nam San 3B Power Sole Co, operating a hydropower plant and transmission line system in Laos in a deal worth US$113 million.

Bank of Ayudhya (BAY) says its non-performing loan ratio could exceed the 2.5% target for this year if its forecast for Thai GDP growth is slashed. The merged bank from TMB Bank and Thanachart Bank aims to have half of its customer base using its mobile banking app by year-end, says retail banking officer Anuwat Luengtaweekul. Krungthai Bank could be required to set aside higher loan-loss provisions to deal with a potential badloan uptick this year as sagging economy hits the deteriorating debt-servicing ability of clients.

COMING UP:

Japan will release preliminary fourth-quarter GDP data on Monday. On Tuesday, Britain will announce January unemployment figures and Germany will release the January ZEW economic sentiment index. Japan will release January trade figures on Wednesday, with Britain and Canada releasing January inflation the same day. China will announce its one-year loan prime rate on Thursday and Germany will release March consumer confidence. Japan will announce January inflation on Friday.

STOCKS TO WATCH: Capital Nomura Securities recommends different investment themes. Cyclical plays include PTT, PTTGC, SCC, TOP and BCP. CPF, TVO, GFPT and KSL are poised to gain from a surge in food prices, while beneficiaries of the 5G auction are ADVANC, TRUE and ETRON. Under a global wealth effect theme, its picks are BDMS, AOT,

BH, BCH, MINT, CENTEL and ERW, while value plays are BBL, KBANK and KKP.

DBS Vickers Securities Thailand recommends fundamental stocks that will have upside gains this quarter such as ADVANC, AOT, CPALL, CHG, AIMIRT and PTTEP.

TECHNICAL VIEW: DBS Vickers sees support at 1,500 points and resistance at 1,550. Globlex Securities sees support at 1,515 and resistance at 1,550.