ASIAN MARKETS AWAIT JOBS DATA WITH BATED BREATH
Recap: Asian stock markets changed little as investors awaited US jobs data, crucial information for the US Federal Reserve in deciding on its first rate hike in years. However, banking stocks were under selling pressure on investor concerns that larger loan-loss provisions to cushion against rising non-performing loans could erode third-quarter profits.
The Stock Exchange of Thailand (SET) index moved within a narrow range of 1,341.3 to 1,369.1 points, closing at 1,346.35, down by 2.21% from the previous week, in moderate trade averaging 32.1 billion baht a day.
Foreign investors were net sellers of 5.75 billion baht. Brokers also yanked 5.03 billion baht out of the market. Institutional and retail investors were net buyers of 2.63 billion and 8.15 billion baht, respectively.
Big movers:
JWD, an integrated inland logistics service provider, surged 44.6% above its 11-baht IPO price on its first day of trading last Tuesday.
EMC was the top loser, plunging 36.7% to 31 satang. TSC, the top gainer, added 14.4% to 12.70 baht.
SSI led in trading volume, sliding 33.3% to four satang.
Top value was JAS, down 0.9% to 5.50 baht; KBANK, down 7.14% to 169 baht; and PTT, down 1.6% to 246 baht.
Newsmakers:
The pace of growth at US factories slowed last month, a sign that the chill falling over the global economy could complicate the Fed’s plans to raise interest rates. The Institute for Supply Management said its index of national factory activity fell to 50.2 points, its lowest since May 2013. The final US manufacturing PMI inched higher to 53.1 points last month from 53 in August but was still at its second-lowest level since October 2013.
US construction spending climbed in August to the highest level since 2008, boosted by a surge in outlays for residential projects and giving a sign the housing market was helping the overall economy. Construction spending increased 0.7% to US$1.09 trillion, the highest level since May 2008.
Activity in China’s vast factory sector shrank again last month as demand softened at home and abroad, fuelling fears that the world’s second-largest economy may be cooling more rapidly than expected. The official manufacturing Purchasing Managers Index (PMI) inched up to 49.8 points last month from 49.7 in August but still suggested conditions were deteriorating. A private survey by Caixin/Markit focusing on small factories pointed to an even sharper cooldown, with the PMI shrinking to 47.2 points, the lowest since March 2009. Readings below 50 points signal a contraction.
Euro-zone manufacturing output weakened slightly last month. Markit’s final euro-zone manufacturing PMI was 52 points, lower than August’s 52.3.
Japan’s factory output unexpectedly fell for the second straight month in August, fuelling worries the economy is slipping back into recession. August factory output fell by 0.5% month-on-month.
World trade will grow by 2.8% this year and could be pegged back further by a US interest rate rise, China’s economic slowdown or Europe’s refugee crisis, the World Trade Organization said. The forecast, revised down from a 3.3% forecast in April, means 2015 will be the fourth year in a row with trade growth of less than 3%, half the annual average from 1990-2008 before the financial crisis hit.
India’s central bank aggressively cut interest rates in a bid to kick-start economic growth following a sharp drop in inflation. The Reserve Bank of India surprised analysts by lowering the benchmark repo rate, the level at which it lends to commercial banks, to 6.75% from 7.25% with immediate effect.
India’s economic growth slowed more than expected in the second quarter. GDP expanded by 7% yearon-year in the period, slower than provisional growth of 7.5% in the first quarter.
Vietnam’s economic growth quickened in the third quarter, buoyed by foreign investment and export growth that contrasted with the performance of many of its neighbours. GDP rose 6.81% year-on-year in the third quarter compared with a revised 6.47% pace in the second quarter.
Thailand’s troubled exports remain far from recovery, with August figures plunging for the eighth consecutive month. The Commerce Ministry reported exports fell sharply by 6.69% year-on-year last month to a value of US$17.7 billion.
The performance is the second worst this year after a 7.87% year-onyear decline in June, which was the biggest drop since an 8.15% fall in December 2011. Thai exporters expect shipments will slip into a full-year contraction of 5% or more as the pace of global economic recovery remains slow while foreign exchange becomes more volatile. Nopporn Thepsithar, chairman of the Thai National Shippers’ Council, said export prospects remained bleak based on the latest data in august showing shipments plunged for the eighth consecutive month.
The economy is expected to rebound next year, but the government may need to inject more money into the economic system if the economy remains stubbornly in the doldrums, Finance Minister Apisak Tantivorawong said. A wave of stimulus measures, the global economic pickup and a stable political situation at home will place the economy on the road to recovery next year, he said, adding that unexpected factors such as the more-severe-than-expected drought could delay the rebound.
The Bank of Thailand’s ratesetting panel will maintain its relaxed monetary policy stance.
Coming up this week:
Singapore’s third-quarter GDP figures the Markit Eurozone Composite PMI for September and retail sales for August will be released today.
The Reserve Bank of Australia will meet tomorrow.
The Bank of Japan will meet on Wednesday.
TFG’s first day of trading on the SET (IPO at 1.95 baht) and US weekly jobless claims are set for Thursday.
Stocks to watch:
Bualuang Securities has buy recommendations on high-growth stocks such as BEAUTY, UNIQ, SAMTEL, TSE, IFEC, SAMART and SYNEX and a trading buy recommendation on BSBM.
Tisco Securities’ list of its top picks this month are ANAN, BJC, BTS, CK, GPSC, HMPRO, MAJOR, SPA, BRR, KBS, KTIS, CK, SEAFCO, SCC, TPIPL, LPN, PS, SPALI, ANAN, AP and QH.
Technical view:
Tisco Securities tips support at 1,310 points with resistance at 1,380. Bualuang Securities pegs immediate support at 1,340 points and then 1,280 with resistance at 1,380.