SHARE INVESTORS TREAD CAUTIOUSLY AHEAD OF FED MEETING
Recap: Most global stock markets moved sideways last week as investors kept an eye on the US interest rate outlook ahead of a Federal Reserve meeting this week, though most observers do not expect any move until September.
The SET index moved in a tight range of 1,569.16 and 1,582.69 points before closing at 1,573.51, down 0.3% from the previous week, in moderate to low turnover averaging 38.4 billion baht a day. Foreign investors continued to be net sellers at 154.1 million baht and institutional investors sold 7.2 billion. Brokers were net buyers of 448.8 million baht and retail investors bought 1.7 billion.
Big movers: B.Grimm Power Plc (BGRIM) made its SET debut on Thursday, gaining 12.5% to close at 18 baht, and finishing the week at 18.90 baht.
AOT led in turnover, gaining 5.1% to 51.25 baht; BGRIM gained 18.1% in its first week to close at 18.90 baht, and KBANK fell by 2.5% to 197 baht. NEWS led in volume, closing unchanged at 0.02 baht. POST was the top loser, plunging 23% to 3.14 baht. Top gainer was CEANE, surging 24.3% to 2.56 baht.
Newsmakers: China reported encouraging second-quarter GDP growth of 6.9% year-on-year, helping to allay fears of a slowdown amid concerns over high debt levels.
The European Central Bank (ECB) has insisted there is still a long way to go before it can call a halt to its stimulus programme. The bank is still buying €60 billion worth of bonds a month as part of its quantitative easing programme. It also kept the key interest unchanged at zero.
US housing starts in June reached a seasonally adjusted annual rate of 1.22 million, 8.3% higher than in May and 2.1% higher for the year.
Japanese equities climbed on Thursday after the Bank of Japan raised its economic growth forecasts while once again pushing back its inflation target. It now expects inflation to reach 2% in the year ending March 2020, a year later than its previous projection.
This is the sixth time it has moved the target.
The baht climbed to a
26-month high against the US dollar on Thursday at 33.59. The local currency is the second-best performer in Asia, up 6.1% since Jan 1, trailing only the Korean won (6.9%). The economic recovery remains resilient in the face of the stronger baht, with large businesses able to handle the situation, says Finance Minister Apisak Tantivorawong. Bank of Thailand governor Veerathai Santiprabhob said the recent run-up was caused mainly by the depreciation of the US dollar.
Two large banks reported lower net profits for the second quarter as higher loan-loss impairment charges amid rising delinquencies eroded their bottom lines. Krungthai Bank (KTB) posted a 62.9% slump in earnings yearon-year, while Kasikornbank (KBank) reported a 4.67% decline.
Thai exports in June surged 11.7% year-on-year despite the firmer baht, supported by strong orders from traditional markets and boosting the government’s confidence of meeting the full-year target of 5% growth in export value. The double-digit growth in June after a 13.2% leap in May signals a brighter outlook for the second half, the Commerce Ministry said.
The Federation of Thai Industries (FTI) sentiment index in June fell for a third month to a 10-month low amid weak purchasing power and fears of stiff punishments under new labour rules cut confidence. The index fell to 84.7 in June, from 85.5 in May and 86.4 in April.
A survey by the National Institute of Development Administration (Nida) and the National Credit Bureau found that 45.2% of respondents have monthly income equal to monthly expenses. The 2,000 respondents reported average monthly income of 26,470 baht versus expenses of 21,607 baht.
Coming up this week: Opec and non-Opec members will meet today to review compliance with their output-cut agreement. Also due today are Thai trade figures for June.
The latest US consumer confidence index will be released tomorrow.
The Federal Open Market Committee meets tomorrow and Wednesday, with a statement due around 2am Thursday Thailand time. Most observers expect no change in interest rates.
Firetrade Engineering Plc (FTE), with an IPO price of 2.95 baht, will begin trading on the SET on Thursday. The auction for the Hua Hin-Prachuap Khiri Khan double-track rail line will be held the same day. Also due are South Korean second-quarter GDP and US durablegoods orders.
Final US second-quarter GDP figures will be released on Friday.
Stocks to watch: Tisco Securities says its recommended stocks for the second half include AMA, BEAUTY, CK, JWD, ROJNA and SEAFCO.
DBS Vickers recommends high-dividend stocks, with top picks KKP, LALIN, TMT, LH, PSH, SNC, BCP, MC, DIF and LHHOTEL.
Technical view: Tisco Securities sees support at 1,550 and resistance at 1,600. Bualuang Securities puts support at 1,565 and resistance at 1,590.