Asian shares fall amid tougher rate talk

RECAP: Asian shares declined yesterday, as continued interest rate hikes and a steadfast hawkish stance by major central banks fuelled global recession worries and sapped risk sentiment, driving US and European markets down.

Thai shares moved in a range of 1,612.02 and 1,638.88 points this week before closing yesterday at 1,619.01, down 0.3% from the previous week, in daily turnover averaging 61.65 billion baht.

Retail investors were net sellers of 2.27 billion baht, followed by brokers at 424.18 million. Institutions were net buyers of 1.82 billion baht and foreign investors bought 877.18 million baht worth of shares.

NEWSMAKERS: US interest rates are now expected to peak in 2023 above 5%, a half-point higher than earlier forecasts, Federal Reserve chairman Jerome Powell said this week. He made the prediction after the Fed raised its benchmark rate by 50 basis points to a range between 3.75% and 4%, the highest level in 15 years.

• US consumer inflation eased to 7.1% in November, the smallest annual increase in nearly a year and down from 7.7% in October, bringing some relief to policymakers.
• Both the Bank of England and the European Central Bank (ECB) on Thursday mirrored the Fed's half-point rate hike. The BoE said it believed UK inflation had peaked, after easing to 10.7% in November from 11.1% in October.
• The ECB said the euro zone economy has probably started to contract, and it cut its 2023 GDP growth forecast to just 0.5%.
• China's economy lost more steam in November as factory output slowed and retail sales extended declines. Industrial output rose 2.2%, after 5% growth in October.
• UBS and Australia & New Zealand Banking Group are the latest forecasters to downgrade growth projections for China following Beijing's abrupt ending of zero-Covid. They expect growth this year to be just 2.7% as Covid infections spread rapidly, but they foresee an improvement to 5% next year.
• Outbound tourism from China is expected to restart during the Chinese New Year in late January, say Thai tourism operators. Hong Kong Chief Executive John Lee said it was "highly possible" that the border with mainland China would reopen, while local news reports said the change could come as soon as January.
• Disgraced cryptocurrency tycoon Sam Bankman-Fried plans to fight extradition from the Bahamas to the US where he face charges including allegedly misappropriating billions of dollars in customers' fund from FTX, once the world's second-largest crypto exchange.
• Binance, the world's largest crypto exchange, sought to counter concerns about outflows by reiterating that users' assets are underpinned by reserves while also flagging an absence of debt. "User assets at Binance are all backed 1:1 and Binance's capital structure is debt free," a spokesperson said.
• Macau said yesterday that international arrivals, including from Hong Kong and Taiwan, can isolate at home for five days instead of in a mandated hotel, as authorities in the gambling hub begin to unwind strict Covid rules.
• Japanese megabanks, including Sumitomo Mitsui Banking Corp and Mizuho Bank, are set to lend around 1.2 trillion yen (US$8.8 billion) to a consortium led by the investment fund Japan Industrial Partners that is seeking to take over Toshiba. Toshiba has said it will consider the proposal.
• The Thai economy is projected to recover faster than expected this year, but will face slower growth in 2023 because of global headwinds. The World Bank now projects GDP growth of 3.4% this year, revised up from 2.9% in June. The Asian Development Bank has revised up its forecast to 3.2% from 2.9%, with 4.0% expansion forecast in 2023.
• Businesses will see their electricity tariffs rise by 20% in the first four months of 2023, the Energy Regulatory Commission said, but household bills will remain unchanged. The Federation of Thai Industries warned earlier that product prices would have to rise by 5-12% if the increase went ahead.
• Authorities have decided to maintain the cap on liquefied petroleum gas for cooking, at 408 baht per 15-kilogramme cylinder until the end of next month to slow rising living costs.
• Thai shrimp production is expected to stay at 280,000 tonnes, on par with the previous year, as the industry remains in the doldrums because of persistent diseases and unfavourable weather, the The Thai Shrimp Association said.
• Krungthai Bank aims to offer digital loans starting next year on its Pao Tang mobile app, which now has some 40 million users.
• The cabinet on Tuesday approved the new national logistics development plan (2023-27), aiming to reduce logistics costs to 5% of GDP from 13.8% in 2021.
• Minor International Plc has acquired a 50.1% stake in GAGA Beverages (Thailand) Co for an undisclosed amount in a move to expand into the retail beverage business. Founded in 2018, GAGA boasts distinctive brand characteristics marketed under the theme "Attitude in a Cup".
• The Industrial Estate Authority of Thailand has co-developed a new dock with Thai Tank Terminal Ltd for the transport and storage of liquid goods, including liquefied natural gas, at its Map Ta Phut deep-sea port in the Eastern Economic Corridor.
• SF Corporation, the operator of the SF cinema chain, expects to allocate several hundred million baht to open at least one new SF cinema in Chon Buri next year and renovate six existing branches at Central Lat Phrao, The Mall Bang Kapi, The Mall Bangkae, Central Khon Kaen, Robinson Chanthaburi and Passione Shopping Destination in Rayong.
• The super-app Grab has launched "GrabTukTuk" service in Phuket, aiming to capture tourists flocking to the southern island following the country's reopening. Some 100 drivers are expected to join the platform, the company said.

COMING UP: The Bank of Thailand will hold an analysts' conference on Monday. Also due this week are November trade figures from the Ministry of Commerce and auto production and export data from the Federation of Thai Industries. In the last week of December, updates are due from the Office of Industrial Economics on manufacturing indices and from the Fiscal Policy Office on economic conditions and future sentiment.

STOCKS TO WATCH: Asia Plus Securities cautions that trading turnover will drop in the run-up to the year-end holidays. However, it recommends stocks that will enjoy positive sentiment from China reopening including AOT, NER, KCE, NOBLE, SCGP, CBG and MTC, as well as firms that benefit from the electric vehicle trend: KCE, TISCO and GPSC. Stocks that benefit from slowing inflation include SCGP, BDMS, KCE, CBG, MTC, CENTEL and ERW. These three investment themes are expected to outperform the SET for the rest of 2022, the brokerage says.

• Capital Nomura Securities recommends China reopening and election-linked stocks. Its picks include SCGP, CPALL, MAKRO, BJC, CRC, SPA, AOT, AU, BAFS, AAV, ICHI, SISB, CBG, SC, SIRI, AWC, ERW, MINT, AMATA, WHA, ERW, CENTEL, SNNP and M.

TECHNICAL VIEW: ASL Securities sees support at 1,610 points and resistance at 1,644. Maybank Securities sees support at 1,610 and resistance at 1,650.