INVESTORS CHEER ECB DIRECTION, SET STAYS ABOVE 1,700
RECAP: European shares hit a five-month high yesterday as investors cheered the European Central Bank’s decision to reduce bond purchases while keeping quantitative easing openended and interest rates near zero as long as necessary. Continued loose policy by the Bank of Japan also buoyed global stock markets.
Optimism over the prospects for US tax cuts and signs that US President Donald Trump could install a more hawkish Federal Reserve chief encouraged investors as well.
Tracking the global exuberance and buying sprees ahead of corporate earnings releases, the Thai stock market climbed above 1,700 again in a shortened week. The market was closed on Monday and Thursday.
The SET index moved in a range of 1,693.03 and 1,721.88 points before closing at 1,716.03, up 1.4% from the previous week, in heavy turnover averaging 55.3 billion baht a day. Foreign investors were net sellers of 3.56 billion baht, and retail investors sold 2.58 billion. Institutional investors were net buyers of 4.84 billion baht and brokers bought 1.29 billion.
NEWSMAKERS: Chinese Communist Party leader Xi Jinping on Wednesday introduced the six other Politburo Standing Committee members who will rule alongside him as he embarks on his second five-year term. All are seen as safe, reliable Party hands and none is seen as an obvious successor to Xi, whose authority remains undisputed.
The European Central Bank (ECB) will reduce the amount of assets it buys every month to €30 billion from the current €60 billion starting in January. Policymakers are confident that the economic recovery has found its footing, but say quantitative easing to stave off the threat of deflation and help spur employment could remain in place longer, possibly to the end of 2018.
Japanese core consumer prices marked a ninth straight month of annual gains in September but failed to rise from the previous month, remaining well short of the central bank’s elusive 2% inflation target. The core consumer price index, which includes oil products but excludes volatile fresh food prices, rose 0.7% in September from a year earlier, the same rate as in August. Japanese Prime Minister Shinzo Abe’s economic agenda is shaping up after his landslide election win on Oct 22 with a focus on steering businesses to lift wages and keeping the economic recovery going with loose fiscal and monetary policies.
The Hong Kong stock exchange is preparing to close its physical trading floor after 31 years. In its heyday, during the 1980s and 1990s, the floor was home to more than 1,000 traders. But the rise of electronic and internet trading has changed the industry irrevocably. Indonesian shares hit a record closing high on Tuesday, as coal mining firms gained after the International Energy Agency forecast strong prospects for energy demand in Southeast Asia. Five of the 11 SET-listed banks saw their gross bad loan ratios continue to rise in the third quarter, further reflecting the uneven economic recovery. The five lenders were Bangkok Bank, Krungthai Bank, Siam Commercial Bank, CIMBT Thai Bank, and Land and Houses Financial Group, according to filings with the SET. Group Lease Plc (GL) has appointed an interim Japanese chairman amid an ongoing regulatory scandal, but the chief executive position remains vacant as no suitable candidate has been found.
Relatively weak global oil prices have pushed PTT Exploration and Production Plc (PTTEP) to delay its final decision to invest in its wholly owned Mariana oil sands project in Canada, said president and chief executive Somporn Vongvuthipornchai.
The cabinet on Tuesday approved an amendment to the five-year strategic plan for public-private partnerships (PPP) to make them compatible with the 12th National Economic and Social Development Plan (2016-20). New projects under the PPP plan are slightly changed from the previous one, with the number cut to 55 from 65 approved for 201519. But the investment value increased to 1.62 trillion baht from 1.41 trillion.
Exports are forecast to hit a record high of US$232.6 billion (7.72 trillion baht) this year, up 8% from 2016 because of a recovering global economy and strong demand for Thai goods, says Chantira Jimreivat Vivatrat, the new director-general of the International Trade Promotion Department.
The Fiscal Policy Office (FPO) at the Finance Ministry is preparing to raise its economic growth forecast next week, a senior official says. Based on initial figures, it is likely to revise up its prediction from 3.6% made in July as exports are doling better than expected, said Soraphol Tulayasathien, director of the FPO’s Macroeconomic Policy Bureau.
COMING UP: Japan and Germany will release September retail sales data on Monday. Due the same day are EU business and consumer confidence indices, US personal consumption for September and the manufacturing index for October.
The Bank of Japan will meet on Tuesday. Euro zone third-quarter GDP and employment data will be released the same day.
STOCKS TO WATCH: Philip Securities (Thailand) has a buy recommendation on laggards and firms expected to post solid earnings third-quarter earnings, notably CHO, SPALI and ECL.
Asia Plus Securities recommends investors accumulate stocks estimated to show robust Q3 profits, among them QH, BGH, PLANB, ADVANC and VGI. It also recommends BBL as loan growth is picking up, and SPALI due to its high backlog.
TECHNICAL VIEW: Phillip Securities tips support at 1,670 points with resistance at 1,752. Asia Plus Securities puts support at 1,700 and resistance in a range of 1,725 to 1,730.