Stocks advance as Fed officials back easing

Stocks advance as Fed officials back easing

Recap: Investment sentiment returned to risk-on mode after two senior US Federal Reserve officials spoke of the need to get ahead of an economic slowdown while interest rates are already low, prompting gains in global stock markets and the value of the US dollar.

The SET index moved in a range of 1,714,41 and 1,738.70 points before closing at 1,735.10, up 0.2% from the previous week, in turnover averaging 58.2 billion baht a day for four operating days.

Foreign investors were net buyers of 4.7 billion baht, retail investors bought 3.1 billion and brokerage firms purchased 859.3 million worth of shares. Institutional investors were net sellers of 8.6 billion baht.

Newsmakers: Christine Lagarde has said she will step down as managing director of the International Monetary Fund on Sept 12. It comes ahead of a decision on her nomination to become head of the European Central Bank.

China's economic growth in the second quarter slowed to 6.2% year-on-year, the weakest in 27 years, with the US-China trade war and weakening global demand weighing on the economy.

US retail sales increased more than expected in June, pointing to strong consumer spending, which could help to offset some of the drag on the economy from weak business investment.

Malaysia will file a complaint to the World Trade Organisation by November to challenge a European Union move to phase out palm oil from being used in transport fuels.

The Chinese telecoms giant Huawei, which is subject to US sanctions over concerns about its ties to the government in Beijing, is planning to make major job cuts at its US operations.

Facebook's ambitious plan to create a financial ecosystem based on its Libra digital currency faces questions from US lawmakers, following negative comments from President Donald Trump, his treasury secretary and the head of the Federal Reserve.

The EU has the US chip maker Qualcomm with an antitrust fine of €242 million, in another blow against a tech titan that is fighting competition battles in Asia and the US.

The Bank of Thailand says the impact of a policy rate cut to tame offshore fund inflows would be limited, but that it stands ready to take other measures if recent moves to shrink non-resident baht accounts fail to contain the local currency.

♦The Federation of Thai Industries is calling for the Labour Ministry to waive the 5% contribution from insured workers to the Social Security Fund for 6-12 months instead of increasing the daily minimum wage to 400 baht as promised during the election campaign.

Thailand's GDP is set to grow by less than 4% this year and next, as the first-quarter growth downturn and a sharp export slowdown point to subdued momentum, says the Asian Development Bank.

The government has tightened its grip on the movement of eight agricultural products on the new price control list to curb smuggling from neighbouring countries, shore up domestic prices and prevent a spread of crop diseases. The products under scrutiny include rice paddy, garlic, onions, palm oil, coconuts and cassava.

The Stock Exchange of Thailand's proposed stablecoin would be used as an e-payment medium for clearing and settlement and not a fundraising tool, says a senior official at the Securities and Exchange Commission.

The Department of Internal Trade has warned online businesses to properly display goods prices. Failure to do so will lead to a maximum fine of 10,000 baht.

Parties involved with digital asset transactions worth above 5 million baht will have to report their trades to the Anti-Money Laundering Office.

Investors are advised to shift their holdings into overseas assets amid the strengthening baht until the local currency starts to depreciate towards the end of 2019, says Bualuang Securities.

The average land appraisal price in Bangkok will rise by 2.5% from the current valuation but remain 20% below the average market price, says the Treasury Department.

The Thai Airways International (THAI) labour union has attacked the airline's plan to buy or lease 38 new aircraft, saying it would put further strain on a company that is already suffering under crippling debt.

Total Access Communications (DTAC) saw a large second-quarter profit gain of 20.3% from the first quarter, even though subscriber numbers fell by 94,000 to 20.6 million, as the third-largest mobile operator began to turn around its waning fortunes after years of decline and stagnation.

SET-listed Pace Development Corporation Plc (PACE), the Bangkok-based owner of Dean & DeLuca, plans to restructure the gourmet food business by separating operations in Asia, which are generally performing well, from those in the US where market conditions have become very tough.

Coming up: The EU will release preliminary July consumer confidence figures on Tuesday and Germany will release preliminary manufacturing PMI for July on Wednesday.

The European Central Bank will hold a policy meeting on Thursday, Germany will release its July Ifo business climate update for July and the US will release June durable goods orders.

The US will announce second-quarter GDP data on Friday and Japan will hold the House of Councillors election on Saturday. Prime Minister Shinzo Abe is hoping gains for his party in the upper house will help him push forward a contentious constitutional amendment related to the role of the country's military.

Stocks to watch: Capital Nomura Securities' recommended portfolio allocation is 82.5% stocks, 12.5% gold and 5% bonds. Stocks expected to benefit from government stimulus policies are CPALL, SABINA, ZEN, ROBINS, KAMART and ICHI, while Eastern Economic Corridor plays include AMATA, WHA, STEC, CK, SCC and PYLON.

PTTEP, TASCO, TOA, AMATA, STPI, SABINA, BGRIM, JUBILE and TVO are identified as gaining from the strong baht, while those gaining from the lower interest rate outlook are SAWAD and AMANAH, the brokerage says.

DBS Vickers Securities' fundamental picks for the third quarter are BBL, DIF, DRT, QH, STEC and WHA. For dollar-cost averaging, it suggests AOT, BBL, CPALL, BDMS and PTT.

Technical view: Maybank Kim Eng Securities Thailand sees support at 1,715 points and resistance at 1,750. Capital Nomura Securities sees support at 1,711 and resistance at 1,747.

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