ALL EYES ON THE FED AFTER GOOD WEEK FOR EQUITIES
RECAP: Most global bourses have rebounded following the announcement of strong US economic figures, but all eyes will be fixed on next week’s US Federal Reserve meeting when an interest-rate increase seems very likely. On the domestic front, investor sentiment is positive now that the National Legislative Assembly has passed all four organic laws on the general election.
The SET index moved in a range of 1,784.39 and 1,820.51 points before closing yesterday at 1,811.76, up 2% from the previous week, in heavy trade averaging 70.30 billion baht a day.
Retail investors were net sellers of 17.54 billion baht. Foreign investors were net buyers of 3.92 billion baht, institutional investors bought 10.08 billion and brokers 3.54 billion worth of shares.
NEWSMAKERS: US President Donald Trump has blocked a planned takeover of the US chipmaker Qualcomm by Singapore-based rival Broadcom. His order cited “credible evidence” that the proposed $140-billion deal “threatens to impair the national security of the US”. Concerns about Broadcom’s links with Chinese businesses appear to be the main issue.
China announced plans to merge its banking and insurance regulators as part of sweeping changes to its central government structure. The move is aimed at reducing systemic risk in the financial sector.
Bank of Japan Governor Haruhiko Kuroda voiced confidence that the central bank could engineer a smooth exit from its ultra-loose monetary policy, but said it was too early to debate specifics with inflation still far from its 2% target. Indonesia Digital Asset Exchange, formerly known as Bitcoin.co.id, will have 1.5 million members buying and selling digital currencies by the end of this year. In contrast, the Indonesia Stock Exchange, which offers stocks, futures and options and exchangetraded funds, has only 1.18 million registered participants.
Thai-EU free trade agreement (FTA) talks are expected to resume by the middle of this year, after the bloc late last year agreed to resume political contact “at all levels”, more than three years after suspending them to protest against the 2014 military coup.
The cabinet on Tuesday approved in principle the drafts of two royal decrees, one to regulate digital-asset-related transactions and another to amend the Revenue Code to let the tax-collecting agency impose levies on digital assets. Nathporn Chatusripitak, a spokesman for Deputy Prime Minister Somkid Jatusripitak, said the new digital asset law would cover cryptocurrencies and initial coin offerings. Investors who make digital-asset-related trades will be liable for 7% value-added tax (VAT), on top of the 15% withholding tax on capital gains and returns from such investments, when the new law is enforced. A series of levies is designed to discourage speculation. The long-delayed Thailand Future Fund (TFF) is likely to be launched in May, with a total asset size of 40-45 billion baht, says MFC Asset Management, which will run the fund with Krungthai Asset Management.
The upcoming resignation of Lars Norling, chief executive of Total Access Communication Plc (DTAC), may further drag down the company’s already shaky reputation, as the country’s third-largest mobile operator has downsized its management structure in an effort to keep operating costs as low as possible.
Digital TV operators rejoiced as the Central Administrative Court issued a ruling that will open the door for some financially struggling operators to renounce the licences they acquired four years ago in an orgy of over-exuberant bidding. They along with telecom operators that offered sky-high bids for 4G licences are now seeking financial bailouts from the taxpayer.
COMING UP: Japan will release February trade data, the UK will update March house prices and New Zealand will release February services figures on Monday.
The Reserve Bank of Australia will release the minutes of its most recent meeting on Tuesday. Due the same day are UK consumer prices and housing costs for February, and German and euro zone ZEW business expectation surveys. The UK will release February jobless claims on Wednesday, and the US will update existing home sales.
The Federal Open Market Committee will announce its policy decision around 2am Thursday Thailand time. Australia will announce employment and unemployment rates for February, and Japan will release the Nikkei purchasing managers’ index for March. Japan and Canada will release February inflation data on Friday, with the US releasing durable goods orders for February.
STOCKS TO WATCH: Tisco Securities recommends buying stocks expected to be targets for window-dressing by fund managers at the end of the quarter including BANPU, EGCO, CPN, ERW, GLOBAL, MINT, PTTEP and SGP.
With the cabinet scheduled to consider further investments in the Eastern Economic Corridor on Tuesday, including a high-speed train worth 200 billion baht to connect three airports, Tisco expects stocks benefitting to include CK, STEC, SEAFCO, AMATA, ROJNA and WHA.
Asia Plus Securities recommends accumulating growth stocks TVO, AH, PTTEP and BPP. It also recommends defensive stocks in health care such as BCH and RJH, together with chicken exporters GFPT, TFG and CPF. Top picks for next week are BBL and BCH.
TECHNICAL VIEW: Tisco Securities sees support at 1,760 points and resistance at 1,850. Finansia Syrus Securities sees support at 1,805 points and resistance at 1,830.