FUND OUTFLOWS PULL DOWN ASIAN STOCKS, SET SLIDES

Recap: Most Asian stock markets dipped last week as US dollar strength led to capital outflows. The Thai stock market posted its fifth straight session of losses on Friday as brokers cut earnings growth forecasts for listed companies as the first-quarter earnings season drew to a close.

The SET index moved in a range of 1,537.43 and 1,571.42, before closing at 1,543.94, down 1.7% from the previous week, in heavy turnover averaging 46.9 billion baht a day. Bargain-hunting foreign investors were net buyers of 4.1 billion baht and retail investors bought 1.15 billion. Institutional investors were net sellers of 4.4 billion baht and brokers sold 820 million.

Big movers: BANPU led in turnover, falling 6.3% to 17.90 baht; CPALL rose 4.9% to 64.50 baht, and CPF was off 5.9% to 24.70 baht. SUPER led in volume, down 0.7% to 1.51 baht. Top gainer RICH added 16.7% to 0.07 baht and top loser EARTH slid 54.4% to 1.98 baht.

Newsmakers: China’s export growth slowed to 8% year-on-year in April from 16.4% in March as demand for electronic devices cooled. Import growth fell to 11.9% from 20.3% on reduced shipments of commodities such as iron ore and copper.

The International Monetary Fund forecast 5.5% economic growth for Asia this year, up from 5.3% last year. Its latest Economic Outlook report predicts Thai GDP expansion will improve to 3.2% from 3% last year, and Indonesia will grow by 5.1%, up from 5%. It estimated Asian economic growth at 5.4% in 2018, helped by accelerating growth in emerging as well as advanced economies, notably the United States.

Finance Minister Apisak Tantivorawong called on commercial banks to narrow their interest spreads, saying the gap in rates charged to large and small businesses is too wide.

Investment applications to the Board of Investment (BoI) and project values are falling, igniting concerns over the effectiveness of its investment promotions, particularly in the flagship Eastern Economic Corridor (EEC). Investment proposals dropped 17% year-on-year in the first quarter, but the BoI expects a pickup later this year. The value of the projects fell to 62 billion baht from 75 billion a year earlier. Actual investment in the first quarter was 80 billion baht, only 16% of the year’s target of 600 billion.

PTT Exploration and Production Plc (PTTEP) has suspended additional investment in Indonesia until its legal dispute with the Indonesian government is settled. Jakarta is suing PTTEP and its Australian unit for $2 billion for alleged environmental damage from the Montara oil spill in the Timor Sea in 2009. PTTEP disputes the claim.

The cabinet approved the Finance Ministry’s proposal to set up a 50-billion-baht “Pracha Rat Fund for Low-Income Earners” to focus on people who earn less than 100,000 baht a year and register with state agencies by May 15.

The Commerce Ministry said Thailand’s trade surplus with the US does not stem from unfair trade practices and that the figures are insignificant. It has prepared a report for the US government after President Donald Trump singled out 16 countries that had high trade surpluses with the US.

The initial public offering of the Thailand Future Fund (TFF) will be delayed for another three months to September, amid concerns raised about high financial costs by the Expressway Authority of Thailand (Exat) and others.

Investment budget disbursement by state enterprises in the first half of the fiscal year to March 31 was just 63 billion baht out of a total of 342 billion. However, the State Enterprise Policy Office (SEPO) believes the pace will accelerate in the third quarter and should reach 95% of the target.

Charoen Pokphand Foods Plc (CPF) raised 38.5 billion baht in fresh funds by allocating 1.54 billion newly issued shares through a rights offering at 25 baht each. Proceeds will be used to repay loans and/or debentures of about 27 billion baht by 2018, with remaining funds reserved for future investments of 11.71 billion.

Glow Energy Plc posted a 31% drop in net profit in Q1, largely due to falling revenue at its Gheco-One power plant.

The rubber producer Sri Trang Agro-Industry Plc (STA) will invest 1-2 billion baht this year to increase midstream rubber capacity by 500,000 tonnes to 2.9 million tonnes annually. In Thailand, it will build a new plant in the Northeast with an annual capacity of 86,400 tonnes. In Indonesia, capacity will expand by 60,000 tonnes a year.

Thai Union Group Plc (TU), the world’s biggest producer of canned tuna, posted a net profit of 1.5 billion baht in Q1, a rise of 19.3% year-onyear, due to rising revenue from its Red Lobster restaurant chain and foreign-exchange gains.

IRPC reported a Q1 net profit of 2.37 billion baht, down 22% year-onyear, due to a one-month maintenance shutdown in February.

SAWAD reported Q1 net profit of 690 million baht, up 64.3% yearon-year, on increased loan volume and a gain of 102 million baht from measurement at fair value of its equity interest in BFIT.

CIMB Thai Bank (CIMBT) aims to become a mid-sized bank by 2022 and explore opportunities for mergers and acquisitions (M&A) to enable rapid expansion.

Coming up this week: Thailand will announce official first-quarter GDP figures today. Also due are Chinese retail sales, industrial production and fixed assets for April.

The MSCI semi-annual index review will be revealed tomorrow. Euro zone first-quarter GDP will be released the same day, along with US housing starts and building permits.

Euro-zone inflation for April will be reported on Wednesday.

Japan and the Philippines will announce first-quarter GDP on Thursday. Bank Indonesia meets the same day.

Singapore will announce firstquarter GDP on Friday.

Stocks to watch: Tisco Securities recommends stocks expected to show strong Q1 earnings but with some upside left in their prices, such as AOT, BANPU, EA, HANA, PLANB, ROJNA and SUPER.

Bualuang Securities says stocks with good profit growth potential in 2017 are CPALL, BEAUTY, MAKRO, M, SAWAD and MTLS. It noted disappointing earnings in Q1 from LH, LPN, ANAN and SAPPE.

Technical view: Phillip Securities tips support at 1,500 with resistance at 1,560 points. Bualunag Securities sees support at 1,527 and resistance at 1,600 points.