SET UP 1.1% ON WEEK AS GLOBAL EQUITY REVIVAL CONTINUES
RECAP:
Global stock markets continued their rallies led by the Dow Jones. European equities rebounded at the end of the week while Asian bourses moved sideways throughout the week.
The SET Index moved in a range of 1,786.66 and 1,809.67 points before closing at 1,805.89, up 1.1% from the previous week, in modest turnover averaging 47.43 billion baht a day. Foreign investors remained net sellers, at 10.7 billion baht, while brokerage firms sold 854.3 million. Institutional investors were net buyers of 7.9 billion baht and retail investors bought 3.7 billion worth of shares.
NEWSMAKERS:
President Donald Trump announced a US$4.4-trillion budget for next year that heralds an era of $1-trillion-plus federal deficits and — unlike the plan he released last year — never comes close to promising a balanced budget even after 10 years.
US officials rejected a proposed merger between the Chicago Stock Exchange and a Chinese-linked investor group, after more than two years of reviews, on security grounds. The EU economy grew at its fastest pace in a decade last year, expanding by 2.5%. In the fourth quarter of 2017, both the EU and the 19-nation euro zone grew by 0.6% from the previous quarter.
Japan’s economic growth slowed to 0.5% in the last quarter of 2017 but it was still the eighth consecutive quarter of growth — the longest streak since the late 1980s. Japan yesterday reappointed central bank chief Haruhiko Kuroda for another term, and chose an advocate of bolder monetary easing as one of his deputies in a signal to investors that policymakers are in no rush to wind down a sweeping stimulus programme. Shares in the South Korean conglomerate Lotte plunged on Wednesday after the surprise jailing of its chairman for bribery. Shin Dong-bin was sentenced to two-and-a-half years for his part in the corruption scandal that has shaken the country. Lotte Group shares fell 7% and Lotte Shopping was down by 5.5%.
Despite the lack of a regulatory framework and high investment risk, J Ventures’ JFin coins flew off the shelves during their presale, the affiliate of SET-listed Jaymart said. It said 81% of 100 million digital tokens were sold by Wednesday afternoon at 6.60 baht each. The Bank of Thailand has asked all financial institutions to avoid making or being involved in cryptocurrency transactions as it looks to curb the risks of virtual currencies.
It is seeking cooperation from financial institutions to avoid investing or trading in digital tokens to benefit themselves or customers, to refrain from providing exchange channels for customers trading in cryptocurrencies, and to refrain from creating platforms for customers to make cryptocurrency transactions.
The SEC says it will examine all initial coin offerings (ICOs) and reprimand companies that are not in compliance with upcoming ICO rules framework. Examples of non-compliance include issuing digital tokens that are seen as securities tokens.
The Thai stock market’s bull run is expected to continue for at least a couple of years, says Tisco Securities, pointing to the growing earnings of listed companies.
The Bank of Thailand kept its policy rate unchanged on Wednesday as widely expected, saying purchasing power has improved, albeit at a gradual pace, and the economic recovery is picking up speed. Commercial lenders’ bad loans are showing signs of improvement after peaking in the third quarter last year, according to the central bank. Non-performing loans should continue to fall at a gradual pace from 2.91% of total credit in Q4 last year, the first decline in several years from 2.97% in the preceding three months.
The government has insisted the ThailandJapan partnership for joint investment in a shinkansen-like high-speed railway from Bangkok to Chiang Mai remains intact, despite recent reports that Japan was solely interested in offering loans for the project. It also confirmed the development will be based on the original goal of trains travelling 300kph to make the line competitive against low-cost airlines.
COMING UP:
Thailand will release official fourth-quarter and full-year 2017 GDP data on Monday, with Japan set to release January trade figures the same day. Japan will release retail sales and machine tool orders for January on Tuesday.
The US on Wednesday will release manufacturing and services purchasing managers’ index (PMI) estimates for February, as well as existing home sales for January. The Federal Reserve will release the minutes of its January meeting on the same day. On Thursday, the US will release jobless claims, leading economic indicators and updated petroleum industry data. The UK will release December services data December and Japan will announce January consumer prices.
On Friday, Germany will release private consumption, government spending, capital investment, construction investment and domestic demand figures for the fourth quarter of 2017. January inflation in the euro zone will be released the same day.
STOCKS TO WATCH:
Asia Plus Securities recommends buying domestic-play stocks and a mix of global stocks. Its picks are WAH, BJC, PTTEP and PTT. High-dividend stocks are identified as SITI and INTUCH.
Country Group Industry recommends three investment themes: small and medium stocks with good supporting factors such as FTE, JUBILE, PM, SMPC, TOG, TWPC, WICE, WINNER, SQ and HTC; stocks associated with the Eastern Economic Corridor such as AMATA, WHA and EASTW; and strong earnings plays such as BTS, GGC, AOT, SNC and IRPC.
TECHNICAL VIEW:
Kasikorn Securities sees support at 1,800 points and resistance at 1,830. Phillip Securities sees support at 1,790 points and resistance at 1,820.