GREECE KEEPS INVESTORS ON EDGE BUT SET RALLIES

Recap: Pressure on US and European share markets eased after Greece obtained some breathing room from the MF, which agreed to defer all 1.6 billion euros in debt repayments to the end of this month, but a successful outcome of talks with euro zone creditors remains elusive.

The SET Index slid early in the week before rebounding, trading between 1,476.16 and 1,509.06 points and closing at 1,507.37, up 0.76% from the previous week, on turnover averaging 37.86 billion baht a day.

Foreign investors were net sellers of 4.98 billion baht and brokers sold 1.65 billion baht. Institutions were net buyers of 4.83 billion baht and domestic retail investors bought 1.81 billion baht.

Big movers: Top loser ABC shed 21.9% to 0.89 baht and top gainer BTC rose 38.5% to 0.36 baht. IEC led in volume, down 20% to 0.04 baht. Leading in turnover were PTT, down 0.3% to 346 baht; KBANK, up 4.1% to 203 baht; and TIPCO, up 27.8% to 13.80 baht.

Newsmakers: The World Bank forecast Thai GDP growth in 2015 at 3.5%, helped by tourism, accelerated government spending and low oil prices. However, sluggish export growth is still a threat, especially exports to China, which is the biggest importer in Asia. The World Bank’s GDP forecast is lower than that of the IMF, which may revise its figure.

Greece delayed a debt payment of 300 million euros to the IMF that was due on as PM Alexis Tsipras demanded changes in the tough austerity demands made by international lenders in return for aid to stave off default.

Deputy PM Wissanu Krea-ngam said that if the National Reform Council (NRC) approved the draft constitution, it should be put to a national vote straight away, likely in January.

The consumer confidence index fell to 75.6 points in May from 76.6 in April, the fifth straight monthly fall and the lowest since June 2014, the University of the Thai Chamber of Commerce reported. It cited public concern over the tepid recovery, weak exports and low farm prices.

With 187 billion baht or 41.6% of the 449-billion-baht investment budget drawn down as of May 9 and another 46.5% already signed off, the government is well on its way to disbursing 87% of its investment budget for fiscal 2015 ending Sept 30. The Fiscal Policy Office has said that the country could achieve 3.7% growth this year if 70% of the investment budget was drawn down.

The Finance Ministry has revived the contentious land and buildings tax, which PM Prayut Chan-o-cha put on hold earlier because of concern about the slow economy. Under a revised proposal, homeowners would be charged 0.1% of appraised value, while land for agricultural and commercial use would be taxed at 0.05% and 0.2%, respectively. Houses owned by farmers in rural provinces would be tax-exempt. The ministry is also seeking cabinet approval to extend the 7% VAT for another year.

The organiser of the Thailand International Motor Expo said it expects the local automotive industry to remain weak until next year, citing both weak domestic demand and the lingering effects of the generous firsttime car buyers’ scheme launched by the previous administration.

Inflation in May contracted 1.27% year-on-year but edged up 0.17% from April, thanks to lower domestic oil prices and electricity bills. The Commerce Ministry’s projection for 2015 inflation remains between 0.6% and 1.3%. Over the first five months, headline inflation was -0.77% and core inflation 1.27%.

The Bank of Thailand’s Monetary Policy Committee (MPC) intends to focus more on the exchange rate when formulating policy, hoping to use exports to strengthen the economy, as interest-rate cuts have had limited impact on domestic activity so far.

The Joint Standing Committee on Commerce, Industry and Banking believes the economy has bottomed out and forecasts stronger expansion in the second half, citing continued strength in tourism and the first year-on-year growth in China-bound exports over April.

The Finance Ministry will propose increasing the investment limit for the private sector from 1 billion to 5 billion baht in government business or public-private partnerships.

Major Cineplex Plc has partnered with CJ E&M Corp of South Korea to co-produce films for the Thai and global markets. They plan to produce six films this year.

Bangchak Petroleum aims to invest in a geothermal power plant at Indonesia and a solar farm in Japan this year as part of a plan to reduce its reliance on oil refining.

Thonburi Hospital Group, the country’s third largest hospital group, plans to invest up to 10 billion baht this year acquiring six hospitals in Thailand as well as China. The group led by Dr Boon Vanasin currently has 22 hospitals in Thailand and abroad with a combined 3,000 beds.

Millcon Steel Plc has signed an agreement with Kobe Steel Ltd of Japan for a joint venture to produce special-grade wire rods in Thailand for the automotive industry in Thailand and Asean.

Coming up this week: Japan will release revised first-quarter GDP figures and China will release trade data for May today, followed by inflation figures tomorrow.

The Monetary Policy Committee (MPC) on Wednesday is expected to leave its interest rate at 1.50%, having made two cuts already this year. China will release May lending data the same day.

Chinese retail sales and industrial production, US retail sales and a Bank of Korea meeting are on the calendar for Thursday.

Stocks to watch: Finansia Syrus recommends stocks CENTEL, GPSC, INTUCH, KTB and TPIPL. Maybank Kim Eng has buy recommendations on TPCH and IFEC, and rates TASCO and LPN as trading buys.

Globlex Securities recommends stocks that will benefit from government projects including ITD, CK, STEC, SEAFCO and PYLON; and beneficiaries of interest-rate cuts including SAWAD, MILS, GL and THANI.

Technical view: Finansia Syrus sees support at 1,460 and resistance at 1,496. Globlex Securities sees support at 1,460 and resistance at 1,520.