Asian shares follow Wall Street upward

RECAP: Asian stocks climbed after Wall Street posted its first advance this month, with traders focused on upcoming US inflation figures for clues on the path of interest-rate increases.

Activity on the Thai stock market is expected to slow down next week as the Christmas and New Year festivals draw nearer and most institutional investors take a break. In addition, investors will be reassessing their positions in light of the new share transaction tax scheduled to take effect next year.

The SET Index moved in a range of 1,605.06 and 1,640.87 points this week before closing yesterday at 1,623.13, down 1.1% from the previous week, in daily turnover averaging 52.18 billion baht.

Foreign investors were net sellers of 4.98 billion baht worth of shares, followed by institutions at 1.36 billion. Retail investors were net buyers of 5.08 billion baht, followed by brokers at 1.26 billion.

NEWSMAKERS: The Chinese yuan climbed to a three-month high of 6.9300 per dollar yesterday as traders cheered the loosening of strict Covid curbs that had hobbled the world's second-largest economy for the past two-plus years.

• China's shift from tough Covid policies will likely depress growth over the next few months as infections surge, bringing a rebound only later in 2023, economists caution. A fragile healthcare system and low vaccination rates have left the country ill-prepared for a big wave of infections, which could spark labour shortages and make wary consumers even more nervous.
• China reported weak factory-gate and consumer prices for November on Thursday, indicating the surge in Covid cases and downbeat consumer sentiment were still weighing on the economy. The producer price index fell 1.3% from a year earlier while consumer price inflation was up 1.6% year-on-year, down from 2.1% in October.
• China's exports and imports shrank at their steepest pace in at least 2½ years in November, as feeble global and domestic demand, Covid-led production disruptions and a property slump at home piled pressure on the economy. Exports contracted 8.7% from a year earlier, official data showed.
• Global airlines are predicting their first industry-wide profit since 2019 next year as air travel rebounds from Covid restrictions. The International Air Transport Association (IATA) now expects a net profit of $4.7 billion for the industry next year. For 2022, it narrowed its forecast for industry-wide losses to $6.9 billion from $9.7 billion.
• China's central bank said this week that it had added 32 tonnes of gold worth $1.8 billion to its reserves, the first time it has disclosed an increase since September 2019. The additions bring Beijing's reported holdings to 1,980 tonnes, worth around $112 billion. China's holdings are the sixth largest in the world. The US tops the table with 8,133.5 tonnes.
• Japan's economy shrank by less than expected in the third quarter, bolstering a view that it is slowly recovering from the Covid doldrums even as major export markets weaken. The revised 0.8% annualised contraction in GDP was better than an early official estimate of 1.2% drop.
• India's Tata Group aims to begin producing semiconductors in its home country within a few years, according to Tata Sons chairman Natarajan Chandrasekaran. He said the conglomerate also plans to launch new businesses in emerging fields such as electric vehicles.
• Tesla officially entered Thailand, its second market in Southeast Asia, with the official launch of two electric vehicle (EV) models on Wednesday. The Model 3 sedan, priced from 1.76 million baht, and the Model Y midsize SUV at 1.96 million, will be available for delivery in the first quarter of 2023. The Board of Investment, meanwhile, is hoping it can persuade the US carmaker to set up a facility in the country.
• Prime Minister Prayut Chan-o-cha said on Tuesday he was ready to stay in power for two more years if backed by parliament following the general election that is due to take place by May 2023 at the latest. The Constitutional Court has ruled that he must leave office in 2025 in line with the eight-year term limit set out in the 2017 charter.
• Consumer confidence hit a 20-month high in November, the sixth straight increase in a row, lifted by improved economic activity, an increase in foreign tourist arrivals and lower fuel prices. The University of the Thai Chamber of Commerce said the index rose to 47.9 from 46.1 in October. It has risen steadily from 41,6 in June.
• Local tourism operators are hoping that the festive season and a hard sales push in December can help increase average hotel occupancy for this year to 50%, which is still short of the 69.5% average posted in pre-Covid 2019. The number of local trips, including one-day trips, totalled 219 million between January and November, with overnight stays reaching 160 million, for an average occupancy rate of 48%.
• PTT Exploration and Production Plc has announced a five-year investment plan of US$29 billion to boost national energy security and fight global warming. The budget, to be spent between 2023 and 2027, comprises capital expenditure of $18.1 billion and operating expenditure of $10.9 billion.
• Major Cineplex Group Plc, the country's leading movie theatre operator, is resuming investment by allocating up to 1 billion baht for expansion next year after scaling back during the pandemic. Major plans to open 13 new movie theatres with 49 screens and three new bowling facilities with 40 lanes, along with 30 new karaoke rooms.
• Business leaders were quick to express concern about a Pheu Thai Party pledge to raise the daily minimum wage to 600 baht from around 345 baht now. The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) said it could affect business competitiveness, deter foreign investment and threaten the survival of SMEs. Pheu Thai subsequently clarified that wages would only start rising when economic conditions improved if it formed a government.
• The multinational seafood company Thai Union Group Plc has reaffirmed its intention to invest 6 billion baht to expand over the coming year, despite ongoing global economic challenges. Chief executive Thiraphong Chansiri said 1 billion baht would be used to support the ongoing construction of two new factories in Samut Sakhon.
• Exports are expected to contract by 1-3% year-on-year in the fourth quarter on slowing global demand, the Thai National Shippers' Council says. The value of Thai shipments may fall to an average of $23.5 billion a month in November and December, after a 4.4% year-on-year contraction in October to $21.7 billion.
• BCPG Plc, the renewable power arm of Bangchak Corp Plc, plans to build Asia's largest wind farm in Laos in cooperation with PowerChina International. The new "Monsoon" complex would have a generation capacity of 600 megawatts, said Niwat Adirek, president of BCPG.
• The SET-listed developer Sansiri is expecting to achieve a record-high net profit in 2022, besting the 3.5 billion baht posted in 2015, resulting from its strategy to maximise cash flow during the pandemic, said chief executive Srettha Thavisin.
• Thailand's inflation rate slowed for a third straight month in November helped by a fall in food prices. The Commerce Ministry said the consumer price index (CPI) was up 5.55% year-on-year in November, after rising 5.98% in October and 6.41% in September.

COMING UP: The Fed will announce its policy rate decision on Wednesday (early Thursday morning Thailand time). China and the US will release November inflation figures and Japan will release the updated Tankan Large Manufacturing Index. On Thursday the Bank of England will meet and UK inflation will be announced.

STOCKS TO WATCH: Capital Nomura Securities recommends investing in stocks of firms that will benefit from baht appreciation, such as power plant businesses including SCGP, GULF, GPSC, TOA and TASCO. It also recommends China reopening plays such as CPALL, MAKRO, BJC, CRC, SPA, AU, AAV, ICHI, SISB, CBG, SC and SIRI.

• The brokerage also advises investors to keep an eye on firms that could benefit from Saudi Arabian investment and those that could see more active trading in the run-up to the election, among them AMATA, ICHI, ERW, CENTEL, SNNP and TIDLOR, together with fundamentally solid consumer stocks such as TLI, BBL, ADVANC and TRUE.
• KKP Securities recommends defensive investments that benefit from energy price movements, as well as large banks. Its picks are ADVANC, BANPU, BBL, BDMS, CHG, CPALL, GFPT, MINT, PTT, SCGP, TOP and RATCH. For dividend stocks, it suggests TU, BBL, ADVANC, INTUCH, RATCH, LH and AP.

TECHNICAL VIEW: Capital Nomura Securities sees support at 1,606 points and resistance at 1,635. Thanachart Securities sees support at 1,610 and resistance at 1,636.