ASIAN SHARES GET LIFT FROM US TECH RESULTS
RECAP: Asian shares rose yesterday, led by tech firms after strong earnings reports from Microsoft and Alphabet on Wall Street. But investors are becoming resigned to the idea that US interest rate cuts are probably many more months away.
After rising for four days in a row driven by foreign buying, the Thai index underwent a correction on Friday, falling 0.3% to near a key resistance of 1,350 points.
The SET index moved in a range of 1,339.92 and 1,366.24 points on the week, before closing yesterday at 1,359.94, up 2.1% from the previous week, with daily turnover averaging 41.3 billion baht.
Institutional investors were net buyers of 4.1 billion baht, followed by foreign investors at 3.94 billion. Retail investors were net sellers of 7.05 billion baht, followed by brokerage firms at 997.27 million.
NEWSMAKERS: US economic growth slowed more than expected in the first quarter as consumer and government spending cooled amid a sharp pickup in inflation. GDP grew 1.6%, well below forecasts of 2.4% rise and the 3.4% growth seen in the fourth quarter of 2023.
■ The yen fell past 155 to the dollar to a 34-year low on Wednesday but rallied yesterday amid speculation that the Bank of Japan might intervene to prop up the currency. The BoJ kept interest rates around zero.
■ Bank Indonesia raised its benchmark interest rate to a record high of 6.25% to support the rupiah after it hit pandemicera lows.
■ Forecast-beating earnings from Microsoft and the Google parent Alphabet indicate their spending on AI and cloud computing is paying off, say analysts. Facebook parent Meta, in contrast, disappointed investors with forecasts of higher expenses and below-target revenue. Microsoft’s revenue rose 17% to $61.86 billion in its financial third quarter, and earnings per share increased 20%.
■ Vietnam’s top tech firm FPT plans to build a $200-million AI factory using Nvidia graphics chips and software, the two firms said on Tuesday.
■ Apple’s smartphone sales in China declined by 19% in the first quarter, while those of rival Huawei grew by 69%, signalling an increasing threat to the US firm’s dominance in the high-end segment of the world’s largest smartphone market.
■ Apple Inc plans to invest more than US$250 million to expand its regional campus in Singapore, according to a company statement on Wednesday.
■ US-based solar equipment makers have asked the government administration to impose steep tariffs on panels and cells from Malaysia, Cambodia, Vietnam and Thailand as they seek to protect billions of dollars in investments in US manufacturing. They accuse Chinese companies with factories in the four countries of flooding the US market with panels priced below production costs.
■ US prosecutors want Changpeng Zhao, the founder and former chief executive of Binance, the world’s largest cryptocurrency exchange, to serve three years in prison after he pleaded guilty to violating laws against money laundering. He is to be sentenced on April 30.
■ Tesla said its profits fell sharply in the first quarter to $1.13 billion, from $2.5 billion in the same period of 2023. Faced with falling sales, the EV maker said it would lay off 6,020 staff in Texas and California.
■ Hotel prices in Japan neared a three-decade high in March, as the cheap yen and cherry blossom season attracted record tourist numberss. The average daily room rate rose 20% year-on-year to ¥20,986.
■ Honda said it would invest C$15 billion to create Canada’s first comprehensive electric vehicle supply chain. The new facility will be built 100km northwest of Toronto and open in 2028.
■ Toyota Motor has announced a tie-up with Tencent to offer AI and cloud computing in its EVs, as the world’s largest automaker seeks to increase sales in China.
■ Banks in China maintained their benchmark lending rates on
Monday, following the central bank’s recent decision to stand pat on monetary policy.
The one-year loan prime rate was held at
3.45% with the five-year rate, a reference for mortgages, was kept at 3.95% as expected.
■ The Japanese tech giant SoftBank says it will invest ¥150 billion to upgrade its computing infrastructure to deliver a Generative AI platform in the Japanese language, the Nikkei reported.
■ Capital A, the holding company of the budget airline group AirAsia, has extended the contract of chief executive Tony Fernandes for five years. Mr Fernandes had been planning to retire but said he had changed his mind as he wants to steer AirAsia back to sounder financial health.
■ Pichai Chunhavajira resigned on Thursday as chairman of the Stock Exchange of Thailand, in a move believed to pave the way for his appointment as finance minister in a cabinet reshuffle. Mr Pichai, 76, has been an adviser to Prime Minister Srettha Thavisin, who is looking to give up the finance post.
■ The Ministry of Finance has reiterated that the government’s digital wallet scheme needs to be as broad-based as possible to stimulate the economy. It was responding to a Bank of Thailand proposal that the programme be scaled back to target only a select group of 15 million financially vulnerable people.
■ The government will ask the Council of State, its legal adviser, to clarify whether the Bank for Agriculture and Agricultural Cooperatives (BAAC) can allow the government to borrow 172.3 billion baht to help finance the digital wallet scheme.
■ Bangkok Bank confirmed yesterday that it will cut its retail loan rates by 25 basis points for six months, effective from Monday, to help vulnerable borrowers reduce their interest burden. It was the first to announce a move after the Thai Bankers Association responded to a request from the government to trim borrowing costs in the absence of a rate cut by the Bank of Thailand.
■ Commercial banks booked marginal profit growth in the first quarter of this
year, largely influenced by the decreased profitability of small to mid-sized banks thanks to higher provisions for loan loss reserves. The 11 SET-listed commercial banks’ net profit for the first quarter was 63.9 billion baht, a modest 4.5% year-onyear increase.
■ The cabinet on Tuesday approved a 60-day visa exemption for Russian visitors, to take effect from May 1 to July 31. The current 90-day visa-free period expires on April 30.
■ The State Railway of Thailand board has approved the second phase of the Thai-Chinese high-speed train project from Nakhon Ratchasima to Nong Khai with a total investment of 341.35 billion baht. The first phase from Bangkok to Korat is still three to four years away from opening.
■ Domestic car sales fell 29.8% year-on-year to 56,099 units last month, though the figure was slightly better than the February total. Vehicle production dropped 23.1% to 138,331 units, the Federation of Thai Industries said.
■ Toyota has launched a public transport pilot project in Pattaya using nine fully electric Hilux Revo pickup trucks converted into songtaews.
■ The extended three-week Songkran festival period this year generated 140 billion baht in tourism income, with 1.9 million foreign tourists visiting, says the Tourism and Spots Ministry.
■ The National Broadcasting and Telecommunications Commission has delayed approval of a National Telecom (NT) proposal to provide gateway facilities for the European satellite operator OneWeb.
■ PTTEP Exploration and Production posted total revenues of 78.8 billion baht in the first quarter, down 5% year-on-year, as net profit fell 3.1% to 18.6 billion baht.
COMING UP: On Tuesday, Germany reports quarterly GDP, unemployment and inflation, and the US will release quarterly wage data and a consumer confidence update. On Wednesday, the US will release updated manufacturing PMI and crude oil inventories and Japan will release monetary policy meeting minutes.
The Federal Reserve will hold a policy meeting on Tuesday and Wednesday with the decision to be announced around 2am Thursday Thailand time. On Thursday, the US will report trade figures and initial jobless claims. Friday will bring US nonfarm payrolls and unemployment, services PMI and ISM non-manufacturing price index.
Locally, the Office of Industrial Economics will update the industrial production index and the Fiscal Policy Office will release regional fiscal and economic data.
STOCKS TO WATCH: Daol Securities says the decision by banks to cut the minimum retail rate (MRR) by 25 basis points for retail and SME customers would be slightly negative in terms of sentiment for banks. As the cuts will last just six months, the impact on net profits will be modest, probably between -0.2% and -0.5%. Those most affected, in descending order, are SCB, KBANK, TTB, BBL, KTB, KKP and TISCO.
Asia Plus Securities says two groups of stocks will be helped by new SET measures to regulate short-selling. The first comprises stocks with outstanding short-sell status and market cap of 5 billion to 7.5 billion baht. Short selling of these stocks could decline when the measures take effect at the end of the second quarter. Top picks are LPN, LANNA, KEX, III and SAMART.
The second group includes stocks with a chance to rebound after being short-sold and seeing prices drop 10% this year: HANA, BTS, LH, EA, KCE, BANPU and COM7.
TECHNICAL VIEW: Krungthai XSpring sees support at 1,330 points and resistance at 1,378. InnovestX Securities sees support at 1,350 and resistance at 1,377.