Stocks stable ahead of Fed chief’s key speech

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Summary: Global stocks stabilized near record highs yesterday as investors waited for an eagerly anticipated speech by Federal Reserve Chairman Jerome Powell that could shed light on when and how the Fed plans to cut its economic stimulus .

The SET index hovered around 1,565.93 and 1,615.22 points this week before closing at 1,611.2 yesterday, up 3.74% – the largest weekly increase since mid-January – in daily sales of an average of 96.98 billion baht.

Foreign investors were net buyers of 13.41 billion baht, local institutional investors bought 8.07 billion, and brokerage firms bought 2.57 billion baht. Retail investors were net sellers of shares valued at 24.04 billion baht.

Newsmaker: The slow roll-out of coronavirus vaccines will cost the global economy $ 2.3 trillion in lost production, according to a new report by the Economist Intelligence Unit.

The market consensus leading up to the Fed’s Jackson Hole Symposium was that the US Federal Reserve could start scaling back its massive bond purchases as early as October to pave the way for rate hikes in late 2022.

The World Trade Organization is urged to step up its role in removing new barriers to trade and providing essential products to tackle Covid-19 such as vaccines, drugs, medical supplies and equipment.

US sanctions have beaten Huawei’s smartphone business and opened the door for Chinese rivals to gain market share. Xiaomi phone sales rose 83% in the second quarter, ranking second in the world behind Samsung.

According to a Reuters poll, Asia’s largest corporations are likely to see their first quarterly earnings decline in six quarters in the July-September period, with a consensus forecast of a 6.2% decline. The setback reflects the serious effects of the new Covid lockdowns in many countries.

China has reopened a key terminal in the port of Ningbo-Zhoushan, the world’s third largest cargo port, after a Covid shutdown elsewhere created large backlogs and exacerbated export delays already caused by the pandemic.

According to official information from the exchange, more than 40 IPOs on the stock exchanges in Shanghai and Shenzhen were stopped as part of an official investigation against several intermediaries in the business.

Vaccine makers Pfizer and Moderna are well on their way to billions in sales than previously expected as new booster shot strategies and Delta variant concerns drive demand and companies raise prices in the US and elsewhere.

Danish shipping giant AP Moller-Maersk says it is accelerating its green fleet plans by ordering eight carbon neutral container ships, a pioneering project in the heavily polluting industry.

Wing Aviation, the drone delivery subsidiary of Google parent Alphabet, is about to deliver the 100,000th package to a customer. The milestone marks further advances in studies in the United States, Australia, and Finland.

Qantas is preparing to resume international flights to countries with high vaccination rates, which have been suspended since March 2020, in December, starting with the US and the UK.

Thailand’s financial position remains strong and it can raise its sovereign debt ceiling if necessary, Treasury Secretary Arkhom Termpittayapaisith said Wednesday as policymakers discuss how to fund more pandemic assistance if needed.

The banking system remained strong in the second quarter with high capitalization and loan loss provisions to deal with the impact of the pandemic while non-performing loans remained stable, the Bank of Thailand said on Monday.

On Tuesday, the cabinet approved the extension of the VAT rate of 7% for a further two years.

The Thai and Chinese authorities have agreed to launch the Thailand-Guangdong cooperation project to promote high-tech industries, including electric vehicles, and the green economy in the Eastern Economic Corridor.

Thai exports are maintaining their growth momentum, up 20.2% year over year in July, albeit from a very low level in 2020, despite ongoing Covid outbreaks.

Driven by rising exports in the first seven months of 2021, Minister of Commerce Jurin Laksanawisit has set the goal this year of increasing fruit deliveries to 180 billion baht this year, more than 30% more than last year.

Domestic auto sales slumped 11.6% year-on-year in July to their lowest level in seven months due to drastic lockdowns.

The Ministry of Health will suggest eating in restaurants and in dark red and red zones for fully vaccinated or passed Covid tests.

Thailand’s unemployment rate fell in the second quarter from a 12-year high in the past three months, but Covid containments are likely to hurt more jobs, the state planning agency said on Wednesday.

The government is urged to step up the introduction of more effective and intensive support measures to maintain jobs and to create jobs for new graduates.

The government plans to convert 10,000 rai in three provinces that make up the Eastern Economic Corridor into herb plantations that grow cannabis, hemp and Fatalai Jone.

The Bank of Agriculture and Agricultural Cooperatives’ lending grew less sharply in the first quarter of fiscal year than in the same period last year, reflecting a weakening economy, said President Tanaratt Ngamvalairatt.

Pattaya City is unlikely to break on Jan.

SET-listed logistics company JWD InfoLogistics has partnered with Thailand Post and Flash Express to launch cold chain express delivery under the Fuze Post brand to capitalize on the 34 billion baht market.

Nok Air plans to add 5 billion baht in liquidity starting next year through a five-year rehabilitation plan to shift the segments to premium service.

The Bank of Ayudhya said Wednesday that it will acquire SHB Finance in Vietnam for 5.1 billion baht from the Saigon-Hanoi Commercial Joint Stock Bank.

Krungsri Finnovate (KFIN), the corporate venture capital arm of Bank of Ayudhya (BAY), has launched a startup fund for wealthy investors interested in technology companies.

Coming soon: The Eurozone will publish consumer confidence in August and the US will publish outstanding home sales for July on Monday. The Bank of Thailand will release its monthly economic update on Tuesday, China will release August manufacturing and services PMI, and the US will release an update on consumer confidence.

The US will release the PMI and non-farm manufacturing employment for August on Wednesday. China will publish August manufacturing PMI and Australia will publish second quarter GDP.

The US will be releasing non-agricultural productivity and July trade data for the second quarter on Thursday and August non-agricultural payroll, unemployment and non-manufacturing PMI on Friday.

Stocks to Watch Out for: Country Group Securities (CGS) recommends stocks that will benefit from lockdown easing, including hospitality groups CENTEL, M, and MINT, retailers like BJC, CRC, and CPALL, mall developer CPN, and transportation companies BTS and BEM. Short-term recommended defensive stocks are communications companies like ADVANC and power plants like BCPG, BGRIM, GPSC and GULF.

Bualuang Securities has a positive outlook for JMART after successfully increasing its share capital by 24.2% in a private placement by VGI and U despite a short-term dilution of earnings per share. In the long term, JMART is expected to invest part of the 10 billion baht in its subsidiaries JMT and SINGER for profit growth.

Technical view: Maybank KimEng Securities sees support at 1,585 and resistance at 1,640. Asia Plus Securities sees support at 1,600 and resistance at 1,620.


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