UPBEAT GLOBAL MOOD HELPS KEEP SET IN BLACK
Recap: Asian stock markets advanced early last week on speculation that China will introduce monetary stimulus measures, but stocks pulled back after the US Federal Reserve surprisingly increased its estimate for its benchmark interest rate by the end of 2015. However, persistent offshore fund inflows helped the Thai market trade in positive territory.
The SET Index moved in a range of 1,562.04 and 1,592.42 points and closed at 1584.91, up 0.2% from the preceding week, on average daily turnover of 46.67 billion baht. Foreign investors were net buyers of 5.45 billion baht. Retail investors were net sellers of 4.08 billion baht, institutional investors 39.95 million and brokers 1.33 billion.
Big movers: Rayong Wire Industries (RWI), a steel wire manufacturer, hit the ceiling on its opening day on Thursday at 4.80 baht from its 1.60-baht IPO price. It closed on Friday at 5.30 baht.
CYBER was the top gainer, up 120.25% to 3.48 baht. Top loser PERM fell 19.9% to 3.14 baht. N-PARK led in volume, down 14.3% to 0.06 baht. The top three by value were TRUE, up 0.8% to 12.60 baht; PTT, unchanged at 354 baht; and GRAND, up 56.5% to 2.66 baht.
Newsmakers: The Fed repeated that it would be a "considerable" time before it starts raising interest rates but raised its estimate of what the benchmark should be at the end of 2015 to 1.38% from 1.13% at its June meeting.
The Thai cabinet last week approved the reduction of personal income tax rates from the current range of 10-37% to a lower range of 5-35%. Those earning up to 300,000 baht per year would pay the lowest rate, while those earning more than 4 million baht would pay 35%. Corporate tax rate is maintained at 20% of net profit.
The Bank of Thailand's Monetary Policy Committee (MPC) voted unanimously to keep interest rates unchanged and expressed concern over economic growth, as exports were still below target.
AOT plans to go ahead with a new passenger terminal at Suvarnabhumi airport but has scrapped plans for a larger expansion. Details of the investment are expected to be submitted to the board next month. When the work completed in 2017, Suvarnabhumi will be able to handle 60 million passengers a year, up from 45 million now.
The government will borrow almost 100 billion baht in fiscal 2015 to finance infrastructure investment, says the Public Debt Management Office (PDMO). Of the total, 45.6 billion baht will fund the junta's eight-year investment plan through 2022 and the rest will be used for ongoing projects.
Thailand is expected to renew an electricity purchasing agreement with Myanmar that expired in 2010, says the Energy Policy and Planning Office. Under the original agreement signed in July 1997, Myanmar agreed to export power to the Electricity Generating Authority of Thailand (Egat), gradually rising to 3,000 megawatts in 2010.
More beverages will face excise taxes as the Excise Department tightens exemption rules. Currently a beverage that is "healthy" or contain local farm inputs can receive a waiver, allowing more than 100 drinks to avoid tax. The department plans to raise the required level of natural ingredients from 10% to 50%, which would result in many beverages using fruit juice concentrate being taxable. So too would green tea, as Ichitan Group has pointed out that a drink with 50% tea leaves would be too bitter for consumers.
Kasikornbank has set a target for its non-life insurance premiums from bancassurance to reach 5 billion baht in the next three years, which would make it the market leader. Its bancassurance sales grew 20% over the past 5 years. The local ratio of non-life insurance premiums to GDP is 1.7%, far below the 2.8% global rate, indicating room for further growth.
SPCG, Asean's largest solar-farm developer and operator, is teaming up with Japan's Kyocera Corp, an electrical parts producer, to develop a solar-panel production plant in Thailand worth 1 billion baht.
Gunkul Engineering, a supplier of electrical equipment, is moving toward making renewable energy its core business, aiming for the segment to contribute revenue of 4-5 billion baht by 2018.
Ratchaburi Electricity Generating Holding Plc (RATCH) and Chow Steel Industries have agreed to invest in a solar power generation business through two joint-venture companies: one for 33 MW of solar projects in Japan, and the other to manage the solar farms.
Thai Union Frozen Products Plc has caught another seafood brand, the sardine producer King Oscar from Norway, which ranks among the top 10 in the world and boasts a heritage going back more than 140 years. It was the second deal disclosed by TUF this month.
Coming up this week: The US will report existing home sales for August as well as final second-quarter GDP figures. Also due are euro zone consumer confidence figures and Chinese loan growth data for August. Thailand at midweek will report trade figures and review GDP and export targets.
Stocks to watch: Asia Plus Securities has buy recommendations for BTS and RS. It says BTS has an upside around 20% with a dividend yield around 4%, while RS should report a good Q3 performance because of revenue from the World Cup and improvements in its digital TV operation.
Tisco Securities has positive views on VGI, AJD, AOT, DTAC, ECF and GOLD, as well as HMPRO, PS, SAMTEL and SPCG.
Technical view: Capital Nomura Securities sees support at 1,576 and 1,581 and resistance at 1,590 and 1,601. Asia Plus Securities sees support at 1,560 and resistance at 1,600.