Mixed reaction to scrapped summit, SET lower on week

Mixed reaction to scrapped summit, SET lower on week

Recap: World stock markets were mixed after North Korea issued a surprisingly restrained response to US President Donald Trump's abrupt decision to cancel a planned summit in Singapore. However, US-China trade tensions continue to weigh on sentiment, with US Commerce Secretary Wilbur Ross due to arrive in Beijing today for more talks.

The SET index moved in a range of 1,729.95 and 1,771.16 points and staged a modest rally yesterday to close at 1,741.21, down 0.7% from the previous week, in moderate turnover averaging 57.61 billion baht a day.

Foreign investors were big net sellers of 17.03 billion baht. Retail investors were net buyers of 9.5 billion baht, with institutional investors purchasing 5.72 billion and brokerage firms 1.6 billion worth of shares.

Newsmakers: US President Donald Trump cancelled a planned summit with North Korean leader Kim Jong-un, blaming the "tremendous anger and open hostility" shown in recent North Korean statements. Pyongyang said it was still willing to talk "at any time in any form" despite the cancellation of the June 12 talks planned for Singapore.

A move to relax US banking rules approved after the 2008 financial crisis cleared its last hurdle with a 258-159 vote in the House of Representatives, and now awaits Mr Trump's signature. The bill reduces the oversight requirements for banks with less than US$250 billion in assets, among other measures.

China announced plans to cut tariffs on car imports from July 1, the latest sign of an easing of trade frictions with the United States. The planned reduction in duties from 25% to 15% is a boon for international automakers but does not meet Donald Trump's expectations that Beijing match US tariffs of 2.5%. Meanwhile, Mr Trump has asked his officials to study raising US tariffs on imported cars.

Thailand's competitiveness ranking slipped three spots this year, to 30th place, mainly due to government inefficiency and budget deficits, said the World Competitiveness Center at IMD business school in Switzerland.

The country's GDP in the first quarter expanded by a forecast-beating 4.8% year-on-year, the fastest pace in five years, accelerating from 4% in the previous quarter.

Exports expanded for a 14th straight month in April, led by stronger shipments of cars and parts, computers and accessories, plastic pellets, oil products, rice, tapioca products, frozen and processed chicken, and fresh, canned and processed fruits and vegetables.

Major consumer goods makers have pledged not to raise prices despite transport costs rising 5% because of higher diesel prices.

SET-listed companies reported a record 286 billion baht in combined net profits in the first quarter, driven by power plants and the banking sector. The amount was up 15.6% quarter-on-quarter and 0.3% year-on-year.

The SEC will allow only firms registered in Thailand to launch initial coin offerings (ICOs) in the initial stage to raise funds from the domestic market. Thai firms registered in overseas markets are excluded because they are under other countries' jurisdiction, said Tipsuda Thavaramara, the SEC deputy secretary-general.

Five large bidders are expected to seek the contract for the 225-billion-baht high-speed railway linking Don Mueang, Suvarnabhumi and U-tapao airports, says Industry Minister Uttama Savanayana. He declined to name them, saying only that several local and foreign investors were interested.

The board of Thai Airways International has named Sumeth Damrongchaitham as president, filling a position that has been vacant for two years since the retirement of Charamporn Jotikasthira. Mr Sumeth, 53, is managing director of the state-owned property company Dhanarak Asset Development Co. He was also chief operating officer of the music and entertainment group GMM Grammy Plc.

Local automobile sales jumped 25.2% year-on-year in April to 79,206 units, thanks to new and refreshed models and the success of the latest Bangkok International Motor Show, the Federation of Thai Industries said.

Coming up: The US will release the May consumer confidence index on Tuesday. Japan will announce April unemployment the same day, followed by May consumer confidence on Wednesday.

Germany on Wednesday will update employment and inflation data for May, the Organisation for Economic Cooperation and Development will release its latest OECD economic outlook, and the US will release revised first-quarter GDP data and April trade figures.

The UK will release consumer confidence for May on Thursday, with China releasing the May manufacturing purchasing managers index (PMI). The EU will release May unemployment and inflation data, with the US announcing personal income and spending data for April the same day.

On Friday, China will release the Caixin manufacturing PMI for May and the US will release closely watched non-farm payroll figures for May.

Stocks to watch: Tisco Securities has no new stock recommendations this week given that the SET index has fallen to below 1,745 points. It suggests selling stocks and holding 100% cash for now to assess the market situation, as there are no positive factors in the short term. Resume buying if the index can hold above 1,720 points.

Capital Nomura Securities recommends purchases in sectors expected to report good earnings growth in the first quarter such as finance, hotels, hospitality and healthcare. Its picks are AEONTS, ERW, BDMS, and THG.

Technical view: Tisco Securities sees support at 1,720 points and resistance at 1,760. Asia Plus Securities sees support at 1,725 and resistance at 1,760.

Do you like the content of this article?
COMMENT