SHUTDOWN FEAR SPOILS WALL STREET MOOD, SET ADVANCES
RECAP: US stocks retreated from their recent dizzying heights amid concerns about a possible government shutdown as early as the weekend as legislators haggled over funding proposals. On the domestic front, the SET index moved in a range of 1,816.06 and 1,837.92 points before closing at 1,821.34 points, up 0.6% from the previous week, in heavy trade averaging 81.25 billion baht a day.
Brokerages were net sellers of 2.3 billion baht, with institutional investors selling 541.5 million worth of shares. Foreign investors were net buyers of 2.42 billion baht and retail investors bought 419.78 million.
NEWSMAKERS: China’s economy grew by 6.9% in 2017 — the first time in seven years that growth exceeded the previous year’s figure. But many observers believe the GDP numbers are much weaker than the official figures suggest. This month alone, the governments of Inner Mongolia and of the large industrial city of Tianjin admitted their data for 2016 were overstated.
Bitcoin traded below $10,000 for the first time since early December. The value of one bitcoin fell to $9,958 before making a slight recovery, according to Coindesk. Other cryptocurrencies have also experienced steep falls, including Ethereum, Ripple and Bitcoin Cash. At least 75 people were injured on Monday when a mezzanine floor at Indonesia’s stock exchange building collapsed into the lobby. In a rare move, the Bank of Thailand has threatened to investigate some financial institutions with operations in Thailand for possible involvement in baht speculation. The announcement comes amid the baht’s continued rally against the US dollar. The local currency, up nearly 2% versus the greenback in 2018, is the second-best performer in Asia this year after the Malaysian ringgit.
The Bank of Thailand is escalating the punishment for banks that violate market conduct rules. Institutions that fail to conform to guidelines will be barred from operating the transgressing business and will be subject to fines of up to 1 million baht per day, among other penalties.
Jaymart subsidiary J Ventures will become the first SET-listed company to sell its own digital currency once it releases “JFin” through an initial coin offering (ICO) in March. The company hopes to raise 660 million baht in the first phase of the 100-million-coin ICO, with a price of US$0.20 (6.40 baht) per coin. It plans to use the funds to develop a decentralised digital lending platform using blockchain technology.
J Trust Asia Pte Ltd (JTA) has filed lawsuits against SET-listed Group Lease Plc (GL), requesting compensation for alleged wrongful acts, avoidance of voidable transactions and false claims of damages.
Japanese companies operating in Thailand are considering raising wages by an average 4.4% this year, according to an annual survey by NNA. Of 403 Japanese firms surveyed, 305 or 75.7% plan wage hikes for workers and those in managerial positions.
With concerns over high household debt and an uptick in bad loans, Tisco Bank has set a conservative loan growth target of 5% this year, far below the 11.8% growth it recorded last year, partly driven by a 33-billion-baht retail loan transferred from Standard Chartered Bank (Thai).
Tourist arrivals jumped to a monthly record high of 3.5 million in December, bringing in 190 billion baht in revenue. The figures brought the number of foreign tourists last year to 35.3 million, up 8.8%, and total tourism revenue of 1.8 trillion baht, said Pongpanu Svetarundra, permanent secretary of the Tourism and Sports Ministry.
The government has given reluctant parents a big push in the form of generous tax breaks aimed at encouraging them to have more than one child. Key to the incentives is the tax deduction for child care from the second child onward at 60,000 baht each.
The government expects investment in the Eastern Economic Corridor to increase from 500 billion to 600 billion baht over the next five years, fuelled by stimulus measures and infrastructure projects, says Industry Minister Uttama Savanayana.
COMING UP: The Bank of Japan will meet on Tuesday, while the EU will release the ZEW economic sentiment index for January. On Wednesday, Japan will release December trade figures, and the EU, the US, Germany and France will release January purchasing managers’ index updates. The US will also release November home prices and December second-hand home sales.
The European Central Bank will meet on Thursday, with investors watching for signals about the future of its stimulus policy. The US will release wholesale inventories and new home sales for December on the same day.
STOCKS TO WATCH: Fundamental picks recommended by DBS Vickers Securities Thailand for the first quarter are AMATA, AOT, BBL, KKP, BEM, IVL, MTLS, SC, VGI and WORK. For high dividend yields, it suggests accumulating KKP, LH, PSH, LALIN, SENA, TMT, MODERN, BCP, MC, SNC, DIF, CPNREIT and LHHOTEL.
Finansia Syrus Securities forecasts stocks expecting to report record-high net profits for Q4 2017 will include CPALL, HMPRO, TCAP, MTLS, ASAP, TK, ORI, ATP30, TACC. Higher net profits on a quarterly and annualised basis are expected from AVANC, ERW, CENTEL, MINT, TPCH, GUNKUL, SC, SEAFCO and PT, as well as GFPT, CPF and TU.
TECHNICAL VIEW: DBS Vickers Securities Thailand sees support at 1,800 points and resistance at 1,850. Krungsri Securities sees support at 1,800 and resistance at 1,840 points.