RECAP: Most Asian equity markets advanced on Friday, following a tech rally on Wall Street, while US economic data sustained expectations that the Federal Reserve would start cutting interest rates next week.
The SET index moved in a range of 1,405.30 and 1,438.31 points this week, before closing on Friday at 1,424.39, down 0.2% from the previous week, with daily turnover averaging 61 billion baht.
Foreign investors were net buyers of 7.71 billion baht, followed by brokerage firms at 1.84 billion. Retail investors were net sellers of 5.46 billion baht, followed by institutional investors at 4.09 billion.
NEWSMAKERS: The US dollar fell yesterday as traders began to see a higher chance that the Federal Reserve will cut its benchmark interest rate by 50 basis points rather than 25 next week. Reports in both The Wall Street Journal and Financial Times suggesting a larger rate cut was on the table have led markets to re-evaluate their expectations.
- US consumer inflation in August declined to its lowest level since February 2021, to 2.5% year-on-year, down 0.4 percentage points from July. But core inflation rose more than expected by 0.3% month-on-month, prompting most investors to believe the Fed would stick with a smaller rate cut.
- The US producer price index picked up slightly by 0.2% in August form a month earlier, following a flat reading in July. Compared with a year ago, the PPI rose 1.7%.
- US non-farm payrolls in August grew by 142,000 positions, lower than market expectations. The July employment figure was revised down to 89,000 positions from 114,000 reported earlier.
- The European Central Bank (ECB) on Thursday cut its key deposit rate by a quarter point to 3.5%, as expected, providing further relief to euro zone households and businesses. Inflation in the euro zone has eased but the economic outlook remains weak, the bank said.
- The Bank of Japan should raise its policy interest rate to "at least around 1%" to avoid upside risks to inflation, a board member said on Thursday, signalling that the central bank is preparing for further monetary tightening.
- The main international oil contract, Brent crude, recovered to around $72 a barrel yesterday after falling below $70 earlier in the week for the first time since December 2021 amid concerns about slowing economic growth depressing fuel demand.
- Opec on Tuesday cut its forecast for global oil demand growth in 2024, saying world oil demand will rise by 2.03 million barrels per day (bpd), down from 2.11 million bpd forecast last month.
- Chinese exports in August grew by 8.7% year-on-year, their fastest pace since March 2023, suggesting manufacturers are rushing out orders ahead of tariffs expected from a growing number of trade partners, while imports missed forecasts amid weak domestic demand.
- OpenAI, the creator of ChatGPT, is in talks to raise about $6.5 billion as part of a deal that would value the company in the vicinity of $150 billion, an increase of nearly $70 billion from its valuation nine months ago.
- The Japanese trading firm Mitsui & Co said it will double its share buyback plan to up to 400 billion yen to boost shareholder returns and improve capital efficiency. The buyback period will be extended to Feb 28, from an earlier expiry date of Sept 20.
- The Thai government on Sept 25 will start distributing a 10,000-baht cash handout to 14.2 million needy people, Finance Minister Pichai Chunhavajira said. However, handouts for another 30 million people will not begin until 2025, he said.
- Investment units in the Vayupak Fund 1 will be offered for public subscription next week, with an annual guaranteed return of 3-9% over its 10-year term. It will start investing in the Stock Exchange of Thailand on Oct 1, the Association of Investment Management Companies (AIMC) said.
- Household debt in Thailand is now at a 16-year high, averaging 606,378 baht and up 8.4% from a year ago, the University of the Thai Chamber of Commerce (UTCC) said. Most of the debt is from credit cards.
- The Ministry of Labour confirms that the minimum wage will increase to 400 baht a day nationwide on Oct 1. It is considering relief measures for businesses, including temporary reductions in employer contributions to the Social Security Fund.
- Consumer confidence dropped for a sixth consecutive month to 13-month low at 56.6 in August due to concerns about slow economic growth, the higher cost of living and uncertainty over the new government's policies.
- The Thai Condominium Association said the condo market shows no signs of recovery due to weak purchasing power among Thais and a slowdown in the foreign market. It urges the Bank of Thailand to relax loan to value (LTV) criteria and cut interest rates and for the government to increase the foreign buyer quota to 75% from 49%.
- The value of Thailand's digital industry grew by 3.88% in 2023 to 2 trillion baht. The software industry showed the highest growth at 12%, exceeding 215 billion baht.
- The Revenue Department is preparing to amend laws to collect a 15% minimum corporate tax from large multinational corporations, and to tax individuals with foreign income even if it is not repatriated to Thailand.
- Thai rice prices fell to the range of $550 to $565 per tonne this week, their weakest levels since July 2023, and down from $585 quoted last week as bidders were forced to reduce their high prices in a recent auction held by Indonesia.
- WHA Corporation has revised up its industrial land sales target to 2,500 rai this year, from an original target of 2,400 rai, thanks to growing foreign investment.
- Advanced Info Service (ADVANC) is preparing to offer sustainability bonds to general investors. The bonds will have terms of four and seven years, becoming available for subscription on Nov 8 and Nov 11-12.
- MR. D.I.Y. Holding (Thailand), a fast-growing home improvement and lifestyle retailer, has filed with the Securities and Exchange Commission for an initial public offering.
COMING UP: On Monday, the euro zone releases wages and trade updates. On Tuesday, the US releases monthly retail sales and industrial production and Japan reports August trade figures. Wednesday brings UK and euro zone inflation updates and the Fed rate decision (2am Thursday Thailand time). On Thursday, the Bank of England and the Bank of Japan hold rate meetings and the US releases August existing home sales. On Friday, the UK reports monthly retail sales and Canada releases monthly housing prices.
STOCKS TO WATCH: Asia Plus Securities says the economic fallout from flooding could pressure overall spending. But some demand for construction materials for repairs could help some firms. Some retail, food and healthcare firms could also realise gains. Recommended stocks are CKP, BDMS, BCH, MEGA, STA, TASCO, GLOBAL, DOHOME, HMPRO and TOA.
- InnovestX Securities recommends companies whose profits have continuously recovered and benefited from the improving domestic economic outlook as well as short-term economic stimulus. Recommended stocks are BDMS, CPALL, GPSC, HANA and LHHOTEL.
TECHNICAL VIEW: Kingsford Securities sees support at 1,400 points and resistance at 1,440. Daol Securities (Thailand) sees support at 1,406 and resistance at 1,434.
