TRADE, SO-SO EARNINGS HURT GLOBAL SENTIMENT BUT SET REVIVES
RECAP: The China-US trade war continues to weaken investors’ risk appetite, while markets have been disappointed by the second-quarter performance of large US corporations including eBay. The yuan has slumped to its lowest point in over a year, sparking talk of intervention by China’s central bank after US President Donald Trump stoked concerns with comments on the path of US interest rates.
The SET index moved in a range of 1,616.59 and 1,674.32 points before closing yesterday at 1,671.06, up 2.3% from the previous week, in moderate turnover averaging 48.2 billion baht a day.
Foreign investors were net sellers of 1.2 billion baht worth of shares, while brokerage firms sold 2.15 billion and retail investors 3.22 billion. Institutional investors were net buyers of 6.6 billion baht.
NEWSMAKERS: Donald Trump repeated his complaint that the EU was “taking advantage” of the US. This time his anger was directed at the $5-billion fine that European antitrust regulators slapped on Google on Wednesday. Its crime: making Google the default search engine and Chrome the default browser on its Android mobile operating system.
China’s economy performed as expected with 6.7% year-onyear growth in the second quarter, down slightly from 6.8% in the previous quarter.
The EU and Japan have signed one of the world’s biggest free trade deals, covering nearly a third of global GDP and 600 million people.
The global economic outlook has darkened as trade tensions rise and growth becomes uneven, says the International Monetary Fund. It has maintained its forecast for 3.9% global growth this year and next, but has cut the outlook for the UK and the euro zone among others. Views on the US dollar’s prospects for the rest of the year are mixed, with Kasikornbank forecasting that the baht will hit an 18-month low of 34 to the greenback this quarter amid large-scale capital outflows.
Siam Commercial Bank (SCB) said second-quarter net profit was down 6.7% year-on-year as the waiver of online transaction fees affected its bottom line.
PTT Exploration and Production Plc (PTTEP) is selling its Montara field off Australia in line with a strategy to focus on operations and projects in other locations with greater strategic potential.
Siam Cement Plc (SCG), the country’s largest cement maker, has acquired a 29% stake in PT Catur Sentosa Adiprana Tbk (CSA) with a transaction value of 1.035 trillion Indonesian rupiah (2.4 billion baht) to expand in that market.
CIMB Thai Bank (CIMBT) expects no personal loan growth this year, citing the impact of tighter Bank of Thailand regulations on personal loans to those earning less than 30,000 baht a month.
The introduction of new accounting rules has been delayed for another year to prevent any adverse impact on businesses, the Commerce Ministry said. International Financial Reporting Standard 9 (IFRS 9) will now take effect in January 2020.
The Asian Development Bank (ADB) upgraded its Thai economic growth forecast to 4.2% this year following robust growth of 4.8% in the first quarter but is keeping its forecast for 2019 unchanged at 4.1%.
Thai business confidence improved in June, boosted by economic stimulus measures, a weaker baht, which is good for tourism and exports, growing border trade and recovering farm prices. The Thai Chamber of Commerce said the index increased to 48.4 points in June from 47.7 in May. Automobile output in June increased by 7.7% to 188,970 units, driven by the production of pickup trucks for export, which rose by 5.9% to 64,342 units last month, said the Federation of Thai Industries.
COMING UP: The US will release June existing home sales on Monday, with the euro zone consumer confidence index for July due the same day.
On Tuesday, Japan will release the Nikkei manufacturing purchasing managers’ index (PMI) for July and supermarket sales for June. Also due are the US manufacturing PMI and the May house price index.
The US on Wednesday will update new home sales and mortgage applications as well as weekly crude oil inventories. South Korea will release July consumer confidence data on Wednesday and second-quarter GDP on Thursday. The European Central Bank will hold a policy meeting on Thursday and the US will release June trade figures and durable goods orders, and July jobless claims.
The US on Friday will release its preliminary second-quarter GDP figure and China will announce industrial profits for June. Britain will release July housing prices.
STOCKS TO WATCH: Kasikorn Securities recommends buying banking shares in light of impressive Q2 results. Its top pick is BBL.
Tisco Securities suggests buying SPA, LH, QH, AP, PSH and MINT, while retaining a positive view on strong quarterly earnings growth for MTC and AEONTS. Recommended telecom plays are TRUE and INTUCH.
TECHNICAL VIEW: SCB Securities sees support at 1,650 points and resistance at 1,700. Asia Plus Securities sees support at 1,650 and resistance between 1,680 and 1,710.