Shares rise on hopes for stimulus in China

RECAP: Asian stocks inched higher yesterday as weak manufacturing data from China stoked expectations of fresh stimulus, even as strong US data bolstered the view that the Federal Reserve will keep interest rates higher for longer.

The yen and the yuan were also in focus amid concern from authorities in both countries about weakness in the currencies.

Domestically, the stock market has been plagued by political uncertainty and trouble involving small and mid-sized stocks, particularly scandal-plagued Stark Corp.

The SET Index moved in a range of 1,461.61 and 1,507.63 points this week before closing on Friday at 1,503.10, down 0.2% from the previous week, in daily turnover averaging 50.53 billion baht.

Retail investors were net buyers of 3.49 billion baht. Brokers were net sellers of 2.45 billion, followed by institutions at 547.38 million and foreign investors at 493.42 million.

NEWSMAKERS:The US economy expanded by 2% year-on-year in the first quarter, well above an earlier estimate of 1.3%. The stronger performance reflected upward adjustments to exports and consumer spending. The latter rose 4.2% -- the strongest pace in nearly two years.

• US Federal Reserve chairman Jerome Powell signalled that policymakers could potentially raise interest rates in July and September to curb persistent price pressures and cool a surprisingly resilient US labour market.
• The Japanese yen briefly hit a seven-month low of 145 to the dollar yesterday, as bets on higher US interest rates pushed up the greenback. Markets are watching for signs of intervention after Finance Minister Shunichi Suzuki warned against excessive weakening of the currency.
• Chinese manufacturing activity contracted for a third straight month in June, albeit at a slower pace. The purchasing managers' index (PMI) slipped to 49.0 from 48.8 in May, staying below the 50-point mark that separates expansion from contraction.
• Bitcoin remains firmly above $30,000, helped by reports that the giant US fund manager Fidelity has sought approval for a Bitcoin exchange-traded fund. The largest cryptocurrency was trading around $30,855 yesterday, down from a recent peak of $31,410 on June 23.
• The Japanese government on July 21 will restore South Korea to its list of preferred export destinations, ending a years-long trade dispute by making it easier for Japanese businesses to ship to Korea.
• The semiconductor materials maker JSR Corp has agreed to be bought by a Japanese government-backed fund for about ¥909 billion ($6.35 billion). Japan Investment Corp is leading a government drive to regain Japan's lead in advanced chip production.
• Mitsubishi Corp is investing in a copper mine in Chile as demand grows for the metal critical to electric vehicles and offshore wind farms. Mitsubishi will acquire a 5% stake in Marimaca Copper, a Canadian mining company, for US$15.1 million.
• Mitsubishi UFJ Financial Group will acquire Mandala Finance, a major automobile loan provider in Indonesia, for 7 trillion rupiah ($465 million), becoming the industry leader in Southeast Asia's largest economy.
• Panasonic and the Chinese smartphone company Xiaomi have entered a partnership to produce and develop air conditioners on the mainland.
• The French chemicals group Arkema will buy a 54% stake of PI Advanced Materials, a South Korean maker of high-performance plastics used in consumer electronics and EVs, from a Seoul-based private equity fund for 1 trillion won ($757 million).
• The Swiss banking group UBS plans to cut 35,000 jobs at Credit Suisse -- more than half its workforce -- as part of the emergency rescue takeover of its rival in March.
• LG Innotek of South Korea will step up production of smartphone camera modules in Vietnam, investing $1 billion to double output capacity.
• Vietnam's economy grew 4.1% in the second quarter, according to an official estimate released on Thursday, picking up from 3.3% in the first quarter but still slower than hoped for, as export demand loses steam.
• Thai government revenue for the first eight months of fiscal 2023 exceeded its target by 122 billion baht as a result of economic recovery and active imports.
• Household debt eased to 90.6% of GDP in the first quarter of 2023, down from 91.4% in the previous quarter, the Bank of Thailand said yesterday.
• The World Bank has upgraded its 2023 GDP growth forecast for Thailand to 3.9%, compared to 2.6% last year, because of stronger demand from China, Europe and the US, private consumption growth and the recovery in tourism.
• The baht has weakened to a seven-month low around 35.40 to the surging dollar as political uncertainty dampens investor appetite, but the move is in line with other emerging Asian currencies.
• Toyota Motor says it will start producing hydrogen from biogas in Thailand from November, a step forward in its project with the Thai conglomerate Charoen Pokphand Group to help decarbonise the transport sector.
• Thailand's top three banks have combined non-performing loans (NPLs) of more than US$9.6 billion, the highest in Southeast Asia, but Thai banks overall still have high levels of reserves for bad debts, says the Federation of Thai Capital Market Organizations (Fetco).
• Thailand's manufacturing production index (MPI) in May dropped by a less-than-expected 3.14% from a year earlier as exports remained sluggish, the Industry Ministry said.
• The SET has joined with the Association of Thai Securities Companies and the Thai Bankers' Association to launch a digital infrastructure for fully electronic end-to-end bond offerings.
• Thailand's domestic gas supply has increased as production from the Erawan field in the Gulf of Thailand has risen to 400 million standard cubic feet per day (MMSCFD) from 210 MMSCFD earlier this year. It will reach 800 MMSCFD by April next year, PTT Exploration and Production has said.
• Stark Corp, the cable maker at the centre of an accounting scandal and debt default, plans to restructure its debts through the Central Bankruptcy Court to stave off a forced delisting from the stock market.
• The Securities and Exchange Commission has filed a complaint against 32 individuals for involvement in the 800-million-baht share manipulation of More Return Plc (MORE).
• The consumer goods conglomerate Saha Group is diversifying into the gold business. A new venture with the bullion trader MTS Gold Group will offer a digital gold-savings platform for both Thais and foreigners.
• Global Power Synergy Plc (GPSC) plans to invest 8.28 billion baht in India-based Avaada Energy Pvt to expand its renewable energy business amid growing electricity demand in India.
• The hotel and restaurant company Minor International Plc (Mint) is preparing to acquire a 100% stake in Singco Trading Pte, the intellectual property holder of the restaurant brand Sizzler, except in the US, Guatemala and Puerto Rico. The acquisition is valued at 546 million baht.
• The Bank of Thailand says it will double the amount that Thai retail investors can invest in foreign securities to $10 million in order to encourage capital outflows amid a volatile baht.
• At least three Japanese firms are expected to invest roughly 3.7 billion baht in industries such as EVs and smart electronics in the Eastern Economic Corridor, says the Industrial Estate Authority of Thailand.
• Line Thailand is preparing new consumer and business features and has embraced generative artificial intelligence (AI) as part of its plan to offer value-added services to users in a "chat economy".

COMING UP: On Monday, Europe and the US will report the purchasing managers' index (PMI) updates for June. China will release a PMI update on Wednesday and the US will release minutes of the last Fed meeting.

• Locally, parliament will convene on Monday and the speaker is to be chosen the following day. The Commerce Ministry will release June inflation figures on Wednesday.

STOCKS TO WATCH: Trinity Securities recommends power plant stocks such as GULF, BGRIM and GPSC; large companies that face little competition such as AOT, ADVANC and TRUE; stocks related to political parties such as SC, SIRI, PR9, PTG and STEC; stocks related to public infrastructure projects such as BEM, BTS, CK and ITD; and stocks with a high proportion of labour costs, namely CPALL, CRC and ERW.

• Asia Plus Securities recommends accumulating good fundamental stocks for which prices have fallen sharply, such as PTT, IVL, CBG, CK, M, HANA, BEC, PTTEP, CKP, TOP, EA, TASCO, PLANB and JMART.

TECHNICAL VIEW: Asia Plus Securities sees support at 1,480 points and resistance at 1,540. Krungsri Capital Securities sees support at 1,480 and resistance at 1,520.