SET gains as Asian bourses enjoy upbeat week

RECAP: Asian stocks rose on Friday and were poised for their fifth straight week of gains as China's reopening and data highlighting a resilient US economy boosted investor sentiment.

The MSCI index of Asia-Pacific shares outside Japan, which fell nearly 20% last year, is up nearly 11% so far this month, buoyed by expectations of a strong economic rebound in China and hopes that most major central banks are nearing an end to hefty interest-rate hikes.

Thai shares moved in a range of 1,693.97 and 1,667.43 points this week before closing on Friday at 1,681.30, up 0.2% from the previous week in daily turnover averaging 58.28 billion baht.

Institutional investors were net sellers of 6.2 billion baht, while retail investors were net buyers of 5.29 billion, followed by brokers at 822.69 million and foreign investors at 93.73 million baht worth of shares.

NEWSMAKERS: The US economy expanded at a healthy pace in the fourth quarter, though signs of slowing demand mounted as high interest rates threaten growth. GDP grew 2.9% but personal consumption, the biggest part of the economy, rose just 2.1%, below expectations.

• The US composite purchasing managers' index (PMI) in January was 46.6, up from 45 in December but still below the 50 mark that separates expansion from contraction. Services and manufacturing PMI both topped forecasts, however. Euro zone composite PMI rose to 50.2 from 49.3, the first time it had topped 50 since last June.
• Core consumer prices in Tokyo rose 4.3% year-on-year in January, exceeding the central bank's 2% target for an eighth straight month. The increase will likely keep the Bank of Japan under pressure to phase out its massive stimulus programme.
• The International Monetary Fund on Thursday suggested that the Bank of Japan could allow more flexibility in 10-year bond yields.
• Akio Toyoda, 66, will step down as president and CEO of Toyota Motor Corp on April 1, to be replaced by chief branding officer Koji Sato, who has been tapped to "fully remodel" the Japanese automaker as a mobility company.
• Suzuki Motor Corp has announced plans to invest 4.5 trillion yen ($34.8 billion) through fiscal 2030 in research, development and capital spending to make battery electric vehicles (EVs).
• SteelAsia Manufacturing, the Philippines' top steelmaker, will partner with China Baowu Steel Group to build a $2-billion facility in the Philippines as the country revs up infrastructure spending.
• Microsoft is investing $10 billion in OpenAI, whose artificial intelligence tool ChatGPT has lit up the internet, amassing more than a million users within days and touching off a debate over the role of AI in the workplace.
• Shares in the business empire of Asia's richest man, Gautam Adani, nosedived yesterday, extending the week's losses to $45 billion, days after a US activist investment firm claimed it had committed "brazen" corporate fraud.
• The Bank of Thailand on Wednesday lifted its policy interest rate by 25 basis points, a fourth consecutive increase, to 1.5% in an attempt to contain high inflation. The Monetary Policy Committee will consider a terminal rate in future meetings.
• The consumer price index (CPI) rose 5.9% year-on-year in December, slowing further from the peak of 7.9% in August.
• State-run banks have begun to raise loan interest rates in line with the central bank's move. The Government Housing Bank on Thursday increased all loan rates by 25 basis points, the first increase in two years and nine months. The Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives followed suit. The Exim Bank will raise its prime lending rate to 6% from 5.75% on Feb 1.
• The baht has strengthened by 15% in the past three months from its weakest point of 38.45 to the US dollar on Oct 20, 2022 to 32.50 now. Further strengthening could adversely affect the crucial export sector, businesses warn.
• Siam Cement Group, the country's largest industrial conglomerate, expects its revenue in 2023 to grow by 10% as it aims to gain more income from a petrochemical business in Vietnam and improving economic conditions. Last year, the company posted 570 billion baht in revenue, up 7% from 2021, driven by packaging, cement and building materials.
• Singha Estate has paused new condominium development and will launch only low-rise houses in high-priced segments, with five new projects worth a combined 10 billion baht planned for this year.
• The Tourism Authority of Thailand (TAT) is preparing to spend an additional 1.9 billion baht to increase airline seat capacity, aiming to connect big cities whose residents that still have potential to spend amid the downturn. The cabinet on Tuesday allocated an additional 3.9 billion baht for tourism promotion, including 1.93 billion for marketing to help revive the economy.
• Tourism last year generated around 1 trillion baht, lower than the target of 1.3 trillion, as the economy slowly recovered from the impact of the pandemic, high inflation and household debt.
• The cabinet agreed to a fifth phase of the "Rao Tiew Duay Kan" (We Travel Together) hotel subsidy campaign worth 3.95 billion baht to promote domestic tourism. The scheme expects to draw 112,000 eligible people to exercise their rights, generating 12.5 billion baht worth of spending.
• Carabao Group (CBG), the maker of Carabao Dang energy drinks, is preparing to invest 4 billion baht to produce German-style beer at its Chai Nat plant, with sales to start in the fourth quarter of this year.
• B.Grimm Power Plc (BGRIM), an energy developer with the largest capacity in the small power producer segment, remains committed to its goal to triple electricity generation capacity to 10 gigawatts, half of which will come from renewable energy, by 2030. The company's current capacity stands at 3.3GW, generated by gas (75%) and renewable energy (25%).
• The dollar value of Thai exports dropped for a third straight month in December, falling 14.6% year-on-year to $21.7 billion, leading to annual growth of 5.5% for the year, the Ministry of Commerce said. Imports decreased 12% to $22.8 billion, resulting in a trade deficit of $1.03 billion.
• The Federation of Thai Industries expects domestic car manufacturing to increase by 3.5% to 1.95 million units this year, following an expansion of exports in 2022. Car production reached 1.88 million units last year, driven by better sales in Thailand and abroad, though December sales fell in many categories because of the impact of flooding and semiconductor shortages.
• MBK Plc plans to invest 1 billion baht to renovate its Paradise mall on Srinakarin Road, with 100-200 million baht planned to modernise other shopping centres, including The Nine on Rama 9. Some 200 million baht will go to renovations at the Pathumwan Princess Hotel near the company's flagship MBK mall.
• Thailand's e-commerce market value is expected to grow by 8-13% this year, with live-streaming and cross-border e-commerce predicted to gain significant traction. The Thai E-Commerce Association said the market last year was worth 770 billion baht, up 8% from the year before. It is expected to reach 870 billion baht this year and 1.12 trillion baht in 2025.

COMING UP: Due Monday is January consumer confidence in the euro zone. On Tuesday China will report manufacturing and services purchasing managers' index (PMI) figures and the US will update the housing price index. The Federal Reserve will hold its policy meeting on Tuesday and Wednesday. Locally, the Bank of Thailand will report economic and financial conditions, and the Ministry of Commerce will release January consumer prices on Feb 6.

STOCKS TO WATCH: Capital Nomura Securities recommends three investment themes. The first is stocks that benefit from China's reopening and upside for the Thai economy, such as AOT, AMATA, AWC, AAV, ERW, BAFS, CENTEL, MINT, SNNP, WHA, SCGP, SPA, EKH, MC, NER, ORI, AP, SIRI, SISB and PRM. Petrochemical firms PTTGC, IRPC and SCC are also recommended.

• The second group includes stocks that benefit from baht appreciation and firms that have foreign debt, such as airlines, with AAV and BA recommended. Also recommended are energy stocks GPSC, GULF, BGRIM, PTTGC, TOP and PTT, as well as industrial estates including AMATA. Importer stocks to watch are TOA, ICHI, SABINA, JUBILE, SYNEX and SIS.
• The third theme is beneficiaries of government stimulus measures and consumer stocks with stable fundamentals, namely CRC, HMPRO, MAKRO, BJC, CPALL, BBL, KBANK, M, ADVANC, DTAC, TRUE, AEONTS, KTC and AMATA.
• Asia Plus Securities recommend stocks that will benefit from higher interest rates, including banks like BBL, SCB and KTB. Firms with good net cash flow are M, SAPPE and SAT, while those benefiting from government stimulus and tourism recovery are BEM, CPALL, ERW, CENTEL and ADVANC.

TECHNICAL VIEW: Maybank Securities sees support at 1,660 points and resistance at 1,707. Capital Nomura Securities sees support at 1,659 and resistance at 1,695.