STALLED US STIMULUS HAS ASIAN INVESTORS DOWNBEAT

RECAP: Asian markets mostly rose yesterday but gains were limited as US lawmakers struggled to hammer out a fresh economic rescue package, while investors were largely unmoved by the last presidential debate before the Nov 3 election.

The SET index moved in a range of 1,202.03 and 1,223.48 points this week before ending the holiday-shortened week on Thursday at 1,213.61, down 1.6% from the previous week, in daily turnover averaging 58.49 billion baht.

Retail investors were net buyers of 8.8 billion baht and brokerage firms bought 1.44 billion. Institutional investors were net sellers of 8.25 billion baht and foreign investors sold 1.99 billion baht worth of shares.

NEWSMAKERS:

Ireland’s 5 million people embarked on a second national lockdown on Wednesday, as Spain became Europe’s first country to surpass a million coronavirus cases. Belgium imposed a nationwide overnight curfew and Switzerland made face masks compulsory in indoor public spaces, as European governments stepped up the fight against a second Covid wave.

Donald Trump and Joe Biden had a largely civil exchange of views in their second presidential debate, in contrast to the chaos and ill temper that defined their first encounter. But analysts said it was not clear if Mr Trump scored the kind of dramatic victory he needed to revive his dimming chances of victory.

President Trump’s hotel company has a Chinese bank account and spent years pursuing business projects in the country, where he paid $200,000 in taxes — far more than he paid in the United States, according to The New York Times.

Brazilian President Jair Bolsonaro declared his country would not acquire the Chinese-made CoronaVacvaccine being tested in the country, just a day after his health minister said it would be distributed nationwide. “The

Brazilian people won’t be anyone’s guinea pig,” the populist president wrote on Facebook.

China’s economy grew 4.9% year-on-year in the third quarter, sustaining its rebound from bruising virus lockdowns and moving closer to pre-pandemic levels. The US Justice Department accused Google of being “a monopoly gatekeeper” that uses anticompetitive tactics to protect its dominant hold over web search and advertising. The antitrust case is the most significant one since US authorities went after Microsoft 22 years ago.

Cathay Pacific has announced it is closing its subsidiary Cathay Dragon and cutting 8,500 jobs, about 24% of its workforce. Cathay Dragon was a full-service regional carrier flying mainly to mainland China and other Asian destinations.

The Chinese e-commerce behemoth Alibaba has bought a controlling $3.6-billion stake in SunArt which runs hundreds of hypermarkets on the mainland for the French shopping giant Auchan.

South Korea’s SK Hynix, the world’s second-largest chipmaker, will acquire Intel’s flash memory chip operation in a deal worth $9 billion, as it seeks to bolster its position against Samsung.

In a rare piece of good news for the Thai economy, the local unit of Nissan Motor Co said it plans to hire over 2,000 new workers for its Samut Prakan operations as the Japanese automaker seeks to shore up its last remaining large-scale production base in Southeast Asia.

The government on Thursday lifted the state of “severe” emergency declared in Bangkok, making good on a pledge Prime Minister Prayut Chan-o-cha made in a nationwide TV address on Wednesday night, when he called for dialogue with protesters. However, activists who staged a huge rally as he was speaking ended the event by presenting a “resignation letter” that they want the retired general to sign within three days.

The pandemic remains a nationwide emergency, says the Centre for Covid19 Situation Administration, which will ask the cabinet to approve yet another extension of emergency status until Nov 30. Protests and gatherings can still be banned under that decree.

A special parliamentary session will be held on Monday and Tuesday to discuss constitutional amendment proposals in an attempt to defuse tensions that have led to daily protests by pro-democracy activists.

The Federation of Thai Industries (FTI) wants authorities to step up efforts to amend the constitution to find a way out of political turbulence threatening plans to restore the economy. Tourism operators are also urging the government to engage in a dialogue with protesters. The Bank of Thailand has expressed concern that ongoing anti-government rallies could further weaken domestic consumption and tourism.

Protests are unlikely to affect the government’s spending stimulus measures, says the Finance Ministry. People’s spending on daily goods continues as usual, while the government’s new spending stimulus measures cover locations across the country, not just specific areas, officials said.

Thirty-nine Chinese tourists arrived in Bangkok on Tuesday, marking the return of foreign tourists after a seven-month hiatus due to the pandemic. They went straight into a 14-day quarantine before they can begin their actual holiday. A second group of 147 Chinese visitors is due to arrive next week, followed by a flight from Scandinavia in November.

Car manufacturing in Thailand sank 38.7% year-on-year to 963,066 units over the past nine months, attributed to the global economic slowdown, closures of some factories and weak purchasing power, says the FTI.

The Employers’ Confederation of Thai Trade and Industry expects employment to continue slowing until the first quarter of 2021, given the far-reaching impact of the coronavirus pandemic.

The central bank has approved the extension of its 500-billion-baht soft loan scheme by six months, and allowed companies listed on the Market for Alternative Investment to apply for the loans, a previous obstacle to participation.

Total Access Communication Plc (DTAC), the country’s third largest mobile operator by subscribers, saw a drop of 107,000 subscribers in the third quarter, with service revenue excluding interconnection charges down 7.6% year-on-year to 14.4 billion baht because of the slow recovery from the pandemic and aggressive competition.

B.Grimm Power Plc, Thailand’s top private power generator by capacity, has reached a US$186-million syndicated loan deal with the Asian Development Bank and key lenders to finance its solar farm in Vietnam, one of the largest in Southeast Asia.

SET-listed Banpu Power Plc (BPP) is conducting a feasibility study to acquire more assets as it is planning to invest in gas-fired power plants in the US.

COMING UP:

Germany will release the October business climate survey on Monday and the US will release September durable goods orders on Tuesday. The Bank of Canada will announce its interest rate decision on Wednesday and Thailand will release September industrial production.

Japan will release October consumer confidence on Thursday and the US will release preliminary third-quarter GDP data, followed by the EU, Germany, France, Italy and Spain on Friday. Thailand on Friday will release September current account, private consumption and investment data along with the coincident index of economic activity.

STOCKS TO WATCH: DBS Vickers Securities Thailand recommends accumulating shares of firms expected to report good Q3 performance, such as AEONTS, ASIAN, AP, ORI, DRT, UTP and PTL. High-dividend stocks at a time of financial volatility include KKP, TISCO, LH, AIMIRT, WHART, DIF, JASIF, SENA, LALIN, NOBLE and ROJNA.

Capital Nomura Securities recommends firms that will see minimal impact from domestic political turmoil and have prospects for good Q3 earnings, among them TU, CPF, ICHI, HTC, WICE, BEM, SMT, KCE, HANA, XO, SAPPE, DELTA and GLOBAL.

TECHNICAL VIEW: DBS Vickers sees support at 1,190 points and resistance at 1,230. Capital Nomura sees support at 1,193 and resistance at 1,235.