INVESTORS KEEP THE PARTY GOING IN YEAR’S FIRST WEEK
Recap: Asian stock markets started the year on a strong footing, rising in response to more upbeat sentiment about the global economy and indications that the US Federal Reserve might not be as aggressive in raising interest rates as earlier predicted. The Thai stock market joined in the rally.
The SET index moved in a range of 1,548.44 to 1,575.62 points before closing on Friday at 1,571.48, up 1.8% from the previous week, in brisk turnover averaging 65.2 billion baht a day. Foreigners were net buyers of 7.08 billion baht, institutional investors bought 3.99 billion and brokers 213 million. Retail investors were net sellers of 11.3 billion baht.
Big movers: MAX led in volume, losing 12.5% to 0.07 baht. Leading in turnover were IVL, adding 9% to 36.50 baht; PTT, jumping 4.6% to 389 baht; and CPALL, up 2% to 63.75 baht. Top gainer PRECHA surged 27.1% to 2.44 baht and top loser MIT tumbled 17.5% to 8.25 baht.
Newsmakers: Minutes of the December Fed meeting showed that while members expected more expansionary fiscal policies under a new US president, most agreed that a “gradual” pace of rate increases over the coming years would remain appropriate.
US factory activity accelerated to a two-year high in December amid a surge in new orders and rising raw material prices, indicating that some of the drag on manufacturing from prolonged dollar strength and a slump in oil prices was fading. The Institute for Supply Management (ISM) index of national factory activity rose 1.5 percentage points to 54.7.
China’s manufacturing sector expanded for a fifth month in December, but the growth rate slowed in a sign that government measures to rein in soaring asset prices are starting to have a knock-on effect on the broader economy. The official Purchasing Managers’ Index (PMI) stood at 51.4 in December compared with 51.7 in November.
Euro zone consumer prices grew faster than expected in December, driven mainly by higher costs of energy, food, alcohol and tobacco and services. Eurostat said prices in the 19 countries sharing the euro rose 1.1% year-on-year, from 0.6% in November.
Euro zone business activity hit its highest rate since May 2011 in December. The composite PMI of 54.4 points was an improvement from 53.9 in November.
German inflation jumped to a three-year high and providing the European Central Bank with evidence its loose monetary policy is working. German consumer prices rose 1.7% on the year after a gain of 0.7% in November.
Economists at HSBC raised their forecast for global growth and inflation over the next two years based on robust manufacturing, a resilient China and the fiscal boost expected in the United States. It sees the global economy expanding by 2.5% this year, with inflation at 3.0% this year and 2.7% next year. For Thailand, it raised its GDP growth forecast to 3.2% in both 2017 and 2018 from 2.8% and 3%, respectively.
Thai inflation rose the most in 25 months in December, driven by fuel, food and non-alcoholic drinks. The consumer price index, based on 450 products and services, rose for the ninth straight month, up 1.13% yearon-year after a gain of 0.6% in November. For all of 2016, prices rose 0.19%, within the Commerce Ministry’s target range of 0-1%.
Consumer sentiment rose for the first time in three months in December, lifted by the holiday tax breaks, improving exports and higher rice prices. The University of the Thai Chamber of Commerce (UTCC) said the index recovered to 73.7 points after dropping to 72.3 in November and 73.1 in October.
Tourism revenue during the holiday period from Dec 31 to Jan 3 rose 8.7% from the same period last year to 30.1 billion baht, thanks to 65 extra international flights and tax breaks for spending on tour packages and hotels. Preliminary data showed 19.6 billion baht came from foreign tourists, up 5.4%, and 10.5 billion from local tourists, up 15.3%.
Inter Far East Energy Corp (IFEC), a renewable power producer, has defaulted on its debt for the second time in less than a month after failing to pay 200 million baht in bills of exchange owed to Solaris Asset Management Co Ltd.
Coming up this week: China will release inflation and lending data for December tomorrow.
Euro-zone industrial production figures are due on Thursday.
A meeting of Opec and non-Opec representatives to monitor production cuts is planned for Friday. Due the same day are US retail sales data, and a Bank of Korea meeting.
Stocks to watch: Tisco Securities has buy recommendations for medium and large laggards including ADVANC, INTUCH, AOT and CK; infrastructure spending beneficiaries including CK, STEC, UNIQ, SEAFCO, ILINK and LOXLEY. Its January plays are STEC, SEAFCO, TPIPL, JWD, BEAUTY, MALEE and TWPC.
KTB Securities says interesting stocks are PTTEP, KBANK, SCC, FSMART, THAI, GFPT and SAPPE.
Technical view: KT Zmico Securities sees support at 1,558 with resistance at 1,600 points. Bualuang Securities tips support at 1,560 and resistance at 1,600 points.