US SHUTDOWN CAUSES BRIEF STIR, POLL DELAY RATTLES SET
RECAP: Global stock markets recovered from a case of nerves early in the week after the US government was briefly shut down amid political wrangling. The dollar continued to slide as top US officials signalled that a weaker currency to benefit exports was in line with what President Donald Trump favoured. Meanwhile, his address to the World Economic Forum in Davos yesterday was being closely watched.
On the domestic front, there was a market correction as investors were concerned about yet another postponement of the general election, this time to early next year. The SET index moved in the range of 1,815.13 and 1,848.07 points before closing at 1,828.88, up by 0.4% from the previous week, in heavy trade averaging 70.25 billion baht per day.
Foreign investors were net buyers of 4.1 billion baht, with brokerages purchasing 281 million baht worth of shares. Institutional investors were net sellers of 2.4 billion and retail investors sold 1.97 billion.
NEWSMAKERS: US senators approved Jerome Powell, Donald Trump’s choice to chair the Federal Reserve, by a vote of 84-13 with support from Republicans and many Democrats. Mr Powell is a Republican who is seen to back low interest rates.
Mr Trump brushed off concerns that new US tariffs on imported washing machines and solar panels will lead to a trade war. The announcement of the tariffs — of up to 50% — prompted an outcry from China and South Korea, the primary targets of the measure. However, Thailand is also a major exporter of washing machines to the US.
The Trans-Pacific Partnership (TPP), rejected by Donald Trump, lives on with the 11 remaining members led by Japan vowing to sign the free trade pact in Chile in March.
South Korean economic growth weakened in the fourth quarter of 2017 as a fall in automobile exports offset higher semiconductor shipments. GDP contracted 0.2% from the previous quarter, when it grew 1.5%, said the Bank of Korea.
Malaysia’s central bank on Thursday raised its key interest rate for the first time since July 2014, at a time when growth has been robust and inflation creeping up. Year-to-date foreign fund inflows to the Thai bond market amount to 79 billion baht, with half invested in short-term bonds to speculate on baht appreciation, says the Thai Bond Market Association.
A law on pooling money parked in bank accounts that have been dormant for at least 10 years into suspended Finance Ministry accounts will apply only to baht-denominated savings and current accounts of individuals, says a Fiscal Policy Office source. Thailand finished last year with export growth of 9.9%, the highest in six years, propelled by higher purchases from key partners, especially the US, EU, Asean and China. The Commerce Ministry said full-year shipments were worth US$237 billion. By contrast, exports in 2016 rose only 0.5% year-on-year. State-owned Krungthai Bank’s unaudited consolidated net profit tumbled by 30.5% last year largely because of a 34.1% surge in loan-loss charges, making it the worst performer among SET-listed bank peers. It reported a net profit of 22.4 billion baht in 2017, compared with 32.3 billion a year earlier.
Siam Commercial Bank (SCB) plans to downsize from 27,000 employees to 15,000 over the next three years and transform more than 600 branches to ready itself for the digital banking era. The bank is also poised to reduce traditional branches from 1,153 to 400 between 2018 and 2020, said chief executive Arthid Nanthawithaya.
The government will offer a first batch of SME soft loans worth 78 billion baht in the first quarter, to support the development of digital technologies by small and medium-sized enterprises.
Two more non-listed companies will seek to raise funds through initial coin offerings soon, following in the footsteps of J Ventures’ plan to issue an ICO in March, says former finance minister Korn Chatikavanij.
COMING UP: The US will release December personal consumption and January manufacturing data on Monday. It will follow on Tuesday with November home prices and January consumer confidence. Japan will release unemployment, household spending and retail sales for December on Tuesday. Elsewhere, the EU will release business confidence, consumer confidence and economic confidence for January.
The Federal Open Market Committee will hold its first meeting of 2018 with results to be announced around 2am Thursday Thailand time. The Fed will also release employment data for January on Wednesday. China will release services and manufacturing purchasing managers’ index (PMI) data for January. Japan and the UK will release consumer confidence for January, and the EU will announce December unemployment numbers.
STOCKS TO WATCH: Tisco Securities suggests buying stocks of firms expected to report good Q4 2017 performance with upside of at least 5%. Recommended are AMATAV, ASAP, BEAUTY, BPP, BR, CK, COM7, DRT, JWD, MCS, MTLS, ORI, PLANB, PLAT, ROJNA, RS and UNIQ. Securities companies that could benefit from high SET turnover include Asia Plus Securities and KGI Securities Thailand.
Bualuang Securities expects interim dividends for H2 2017 to be announced by GLOW, KKP, SIRI and TISCO. Dividend stocks with yields higher than 7% for this year are identified as KKP, JASIF and SIRI.
TECHNICAL VIEW: Bualuang Securities sees support at 1,803 points and resistance at 1,850. Tisco Securities sees support at 1,805 points and resistance at 1,840.