Shares boosted by growing hopes for a soft landing

RECAP: Asian stocks closed in on a fourth month of gains, lifted by hopes of a soft landing for the US economy. The dollar was poised for its worst monthly performance in nine months on the view that US interest rates are all but certain to start falling next month.

The SET index moved in a range of 1,351.33 and 1,370.67 points this week, before closing on Friday at 1,359.07, up 0.3% from the previous week, with daily turnover averaging 51.2 billion baht.

Foreign investors were net buyers of 4.36 billion baht, followed by brokerage firms at 540.67 million. Institutional investors were net sellers of 3.15 billion baht, followed by retail investors at 1.76 billion.

NEWSMAKERS: The US economy grew at a healthy annual pace of 3% in the second quarter, according to a final revision, beating analysts' estimate of 2.8%, fuelled by strong consumer spending and business investment.

• Federal Reserve Bank of Atlanta president Raphael Bostic said it may be "time to move" on interest rate cuts, as inflation is down farther and the unemployment rate up more than he anticipated, but he wants to be sure before making a final decision.
• The US consumer confidence index and outlook for the next six months hit a six-month high of 103.3 in August, up from 101.9 in July and well above the forecast of 100.9.
• Canada, following the lead of the US and EU, is preparing to impose a 100% tariff on imports of Chinese electric vehicles, along with a 25% tariff on steel and aluminium from China.
• Samsung SDI has completed an agreement with General Motors to build a joint electric vehicle (EV) battery factory in the US state of Indiana, worth about $3.5 billion.
• The AI chipmaker Nvidia said its second-quarter profit more than doubled year-on-year to $16.6 billion, beating analysts' forecasts of $15 billion, on sales of $30 billion, up 122%.
• LG Electronics is considering an initial public offering for its Indian business, tapping a booming stock market to help hit a target of $75 billion in electronics revenue by 2030.
• Apple is set to launch AI-enabled iPhone 16s, new watches and AirPods on Sept 10, with sales in key markets starting on Sept 20, Bloomberg reported.
• Profits at China's major industrial firms grew at a faster pace of 4.1% year-on-year in July, underlining the resilience of the manufacturing sector which has helped support economic growth.
• Oil output in Libya was slashed in half this week as breakaway authorities in the east shuttered more than 500,000 barrels a day amid a fight with the Tripoli-based government for control of the central bank.
• Bank of Japan deputy governor Ryozo Himino said the central bank was ready to hike interest rates further as long as inflation moves in line with its forecasts. The Tokyo consumer price index rose 2.4% in August, from 2.2% in July.
• The board of JD.com has approved a $5-billion share repurchase programme, allowing the Chinese e-commerce giant to buy back its stock over the next 36 months.
• IBM is shutting down its China research and development department, the latest retreat from the country by top US technology companies, affecting more than 1,000 jobs there.
• Indian regulators have tentatively approved an $8.5-billion merger between Disney and Reliance Industries, controlled by billionaire Mukesh Ambani, to create India's biggest entertainment player.
• China is considering allowing homeowners to refinance as much as $5.4 trillion in mortgages to lower borrowing costs for millions of families and boost consumption.
• Malaysia Aviation Group Bhd, the parent of national carrier Malaysia Airlines, said it would reduce network capacity by 20% across its airlines this year amid a shortage of planes, labour and parts.
• The Bank of Thailand says it is monitoring the baht as the currency has appreciated to break the level of 34 to the dollar, influenced by both domestic and external factors. Kasikorn Research Center predicted the baht could go as high as 33.50.
• Thai banks' non-performing loans in the second quarter grew to 540 billion baht, or 2.84% of credit outstanding, largely consumer, auto and home loans. The NPL ratio for mortgages rose to 3.7% from 3.5%, the Bank of Thailand said.
• TMBThanachart Bank has doubled its debt restructuring portfolio for auto loans in an effort to contain consumer finance NPLs.
• Over 700,000 rai of farmland has been affected by flooding, according to the agriculture ministry. The Thai Chamber of Commerce estimates economic damage of 4-6 billion baht.
• The Royal Turf Club has announced plans for a comprehensive entertainment complex to be called The Royal Siam Haven, which would include a casino, 6-star hotel, horse race course and other attractions. It is seeking to raise 200 billion baht by tapping international partners.
• The Ministry of Finance said the draft law for entertainment complexes, part of the casino legalisation process, is undergoing public hearings and will be sent to the cabinet for consideration late this year.
• Deputy Finance Minister Paopoom Rojanasakul said the 10,000-baht digital handout programme was being scaled back, with the first round in September to prioritise 14 million state welfare cardholders.
• The finance ministry has set up two committees to manage its stock portfolio as it plans to sell about 25 unlisted companies worth 20 billion baht that are not generating revenue for the state.
• The Energy Regulatory Commission has issued criteria for the second phase of green energy purchases, with targets of 600MW for wind power and 1,580MW for solar farms.
• The Ministry of Commerce reported exports totalled $25.7 billion in July, growing 15.2% year-on-year and the highest growth in 28 months. Imports were up 13.1%.
• July automobile production of 124,829 units was down 16.6% year on year, the Federation of Thai Industries reported. Domestic sales dropped 40.85% due to stricter lending policies, high household debt and a weak economy.
• US-based Western Digital has announced a plan to invest 23 billion baht to expand hard disk drive production in Thailand.

COMING UP: On Monday, the UK will release a housing price update, the euro zone and Germany will report manufacturing PMI and Australia will update the current account. Tuesday brings US manufacturing PMI and Japanese and Chinese services PMI. On Wednesday, the Bank of Canada has a rate meeting. On Friday, the US will release August employment data and China will announce August trade figures.

• Locally, SCB will discuss its second-quarter financial performance on Tuesday. DBS Group (Singapore) has a briefing on Wednesday.

STOCKS TO WATCH: Asia Plus Securities notes improving market sentiment with foreign investors returning to net-buy status this week. It recommends three themes, starting with firms whose H2 results should be better than in H1, among them SCC, IVL, CRC, SCGP, BGRIM and HMPRO. The second involves stocks with stronger fundamentals than the market, including PLANB, MTC, BH, GULF and CPAXT. Finally, consider stocks with H2 profit benefiting from heavy rains, such as BCH, TASCO and CKP.

• InnovestX Securities recommends stocks that are both oversold and undervalued such as SCGP, BCH, KCE, PTTGC and OSP, with short-term caution on overbought shares including COM7, VGI, TRUE and ADVANC.
• Pi Securities says food exports are healthy, notably with pet food up 26% this year, benefiting AAI, ITC and TU. Chilled chicken exports that are up 14% are positive for GFPT, TFG and CPF.

TECHNICAL VIEW: InnovestX sees support at 1,340 points and resistance at 1,372. KrungthaiXSpring Securities sees support at 1,345 and resistance at 1,375.