SET GAINS ON OIL REVIVAL AS GREEK DRAMA INTENSIFIES
Recap: Asian stock markets were rattled by concerns about Greece’s plans to renegotiate its bailout. Worries mounted after Greece’s new finance minister clashed with his powerful German counterpart and the European Central Bank (ECB) moved to stop funding Greece’s lenders.
However, the local bourse was shielded from the jitters as investors shifted their focus to the rebounding oil price. SET Index last week moved in the range of 1,571.69 and 1,619.77 points, and closed at 1,613.63 points, up 2.1% from the previous week. Average trading value was brisk at 53.63 billion baht a day.
Foreign investors were net buyers of 6.01 billion baht, institutional investors bought 465.37 million and brokers 112.57 million. Retail investors were net sellers of 6.59 billion baht.
Big movers: Top loser NPP slid 30.1% to 3.30 baht and top gainer ACAP added 54.3% to 13.50 baht. NPARK led in volume, losing 20% to 0.04 baht. Tops in value were TRUE, rising 4.4% to 14.20 baht; PTT, up 9% to 377 baht; and PTTEP, gaining 10.1% to 120 baht.
Newsmakers: China’s central bank cut bank reserve requirements for the first time in over two years. The reduction of 50 basis points to 19.5% in the amount of cash big banks must hold could free up 600 billion yuan (US$96 billion). This would allow banks to inject 2-3 trillion yuan into the economy after accounting for the multiplier effect of loans.
The decision by the ECB to stop accepting Greek bonds in return for funds shifts the burden onto Athens’ central bank to finance lenders and marks a big setback for the new government’s attempt to negotiate a new debt deal with its euro zone peers.
Australia’s central bank lowered its key interest rate by 25 basis points to a record low of 2.25%, the first cut in 18 months, to spur growth.
Indonesia’s economic growth slipped a five-year low in 2014 on weak exports and investment. GDP expanded 5.02%, compared with 5.58% in 2013. Fourth-quarter growth was 5.01% from a year earlier, but down 2.06% from the third quarter.
The Bank of Thailand believes its current policy rate is appropriate but has left the door open to a possible reduction if the economy is slower than expected or unexpected effects emerge. It insists that the threat of negative inflation, expected to continue into the second quarter, does not warrant a cut in the policy rate, saying the situation will be short-lived.
January headline inflation, based on 450 products and services, shrank by 0.41% year-on-year, the first contraction since September 2009 due to declining oil and food prices, but authorities still insist Thailand has yet to see signs of deflation.
Consumer sentiment fell last month from an 18-month high in December, as people grew more concerned about the slow economic recovery, low farm prices and weak export growth. The University of the Thai Chamber of Commerce (UTCC) said the January consumer confidence index fell to 80.4 points from 81.1 in December.
Higher value-added tax (VAT) collection last month is a good indicator of recovery, says Deputy Prime Minister MR Pridiyathorn Devakula. VAT collection rose 11.4% year-on-year to 40.1 billion baht, reflecting improving consumption. VAT collection has risen each month since September.
PTT, the largest shareholder in Bangchak Petroleum (BCP) with a 27% stake, has agreed to sell a 15% stake in BCP to the state-owned Vayupak Fund, with the remaining 12% likely to be sold to outsider bidders. PTT estimated it would receive more than 10 billion baht in cash from the sale, expected to be completed in the first quarter.
Egco Group, Thailand’s largest solar farm operator, has expanded its presence in renewable energy by acquiring an additional 33.33% of Natural Energy Development Co (NED) for 12 billion baht.
The Fetco-Nida investor sentiment index for February showed confidence among four types of investors about the next three months at 115.59 points, up nearly 31% from the previous survey. The foreign investor confidence index rose from 66.67 a month ago to 116.67.
PTG plans to initially launch 30 LPG stations and expand its traditional PT retail stations to 1,200 within this year, which would move it into second place for market share in the retail oil industry. PTG also targets revenue growth this year of 20% driven by higher sales volume and more stations.
Samart i-Mobile (SIM) estimated 2014 net income at 11 billion baht and forecasts 5% profit growth this year, with revenue growth of 15-20%. It aims to launch 25 smartphone models this year with a sales target of 5 million handsets overall.
Coming up this week: Japan’s consumer confidence index for January will be released today.
China will release inflation and new-loan figures tomorrow.
US retail sales for January and the euro zone’s fourth-quarter GDP are due on Thursday.
Stocks to watch: Tisco Securities says its stock picks for February are AP, BGH, CK, INTUCH, KGI, SIRI, SST and TCAP. It also recommends buying high-dividend plays including STPI, SRICHA, BJCHI, KTB, ASP, SITHAI, AP, PYLON, QH and SIRI.
Bualuang Securities is underweight on energy and petrochemical stocks such as TPCH. Asia Plus Group Holdings Securities has buy recommendations on MCS, VNG and ERW.
Technical view: Finansia Syrus sees support at 1,593 and resistance at 1,630 points. ASP puts support at 1,604 and resistance at 1,650.