Worries about economic slowdown depress stocks

Recap: Global shares moved higher on Friday but were still heading for losses compared with a week earlier as investors remain worried over high inflation and an economic slowdown.

The SET index moved in a range of 1,590.96 and 1,626.16 points this week and closed at 1,622.95, for a gain of 2.43% from the previous week, in daily turnover averaging 71.99 billion baht for four operating days.

Foreign investors were net buyers of 9.36 billion baht and institutional investors bought 1.68 billion baht. Retail investors were net sellers of 10.16 billion baht and brokers offloaded 878.66 million baht worth of shares.

Newsmakers: US President Joe Biden arrived in Seoul yesterday to begin a four-day visit to South Korea and Japan, which will feature the official launch a long-awaited Indo-Pacific economic initiative to increase US engagement with Asia.

• UK inflation in April rose to a 40-year high of 9%, amid soaring energy and food prices, adding to pressure for action from the government and central bank.
• China on Friday announced it would cut a key interest rate in a boost to home buyers and debt-mired developers as the country's economy is slowed by Covid-19 restrictions ripping across major cities.
• China has said it will impose tight restrictions on "non-essential" overseas travel for its citizens to help contain the coronavirus outbreak.
• Billionaire Elon Musk said on Tuesday his bid to buy Twitter won't proceed unless he gets proof of the number of spam accounts plaguing the platform, adding uncertainty to his roller-coaster pursuit of the social media giant.
• Tesla shares have lost one third of their value since Mr Musk disclosed his stake in Twitter in early April and sold $8.5 billion in Tesla stocks to help finance the deal.
• Only two of the world's 12 top automakers plan to make enough electric vehicles by 2030 to stay in step with Paris Agreement climate goals, according to a study by Influence Map, a research NGO.
• Oil prices headed for a modest weekly gain, with West Texas Intermediate close to $112 a barrel, as optimism about the outlook for demand eclipsed concerns about tighter monetary policy and an economic slowdown that have combined to trouble broader financial markets.
• The American fast-food giant McDonald's has reached a deal to sell its 850-restaurant Russian business to local licensee Alexander Govor, as it exits the Russian market in the wake of the Ukraine invasion.
• The Philippine central bank raised its key interest rate for the first time since 2018 to combat Southeast Asia's second-fastest inflation.
• Indonesia will lift its palm oil export ban from Monday, following improvements in the domestic cooking oil supply situation, President Joko Widodo said on Thursday.
• Reckoning they have little to lose with prices so ridiculously low, South Korean speculators have piled into Luna, the cryptocurrency that lost 99.99% of its value last week after its paired stablecoin TerraUSD collapsed.
• Finance Minister Arkhom Termpittayapaisith says the outlook for the economy this year is still good, despite the state planning agency's downgrade of its growth forecast, adding that he wants to see a policy interest rate that supports the recovery.
• Mounting pressure from inflation, energy prices, the global slowdown and the Ukraine crisis prompted the National Economic and Social Development Council to cut its GDP growth forecast to a range of 2.5% to 3.5%, from 3.5% to 4.5% previously. GDP in the first quarter rose 2.2% year-on-year.
• Thailand has no need to raise interest rates in response to actions of the US Federal Reserve as domestic factors and the country's economic recovery will be the key factors influencing decisions, Bank of Thailand governor Sethaput Suthiwartnarueput said on Thursday.
• The industries sentiment index dropped to a five-month low in April, hit by higher production costs linked to rising energy and raw material prices.
• Commercial banks showed strong growth in personal loans during the first quarter due to greater household demand for liquidity to support daily spending needs.
• Commerce Minister Jurin Laksanawisit will chair four days of Asia-Pacific Economic Cooperation (Apec) meetings that have as part of their agenda the ambitious goal of creating the world's biggest free trade area.
• The government will continue to cap the diesel price at 32 baht a litre -- about 10 baht below the real market price -- thanks to the increased diesel excise tax cut of five baht a litre, which will remain in effect until July 20.
• The five-baht reduction of the diesel excise tax will relieve pressure on logistics and transport costs, says the Land Transport Federation of Thailand (LTFT).
• Rice exporters have expressed growing concerns about second-quarter shipment prospects, as a sharp rise in domestic prices may lead importers to baulk at buying Thai grains.
• Volatile oil prices continue to cast a shadow over any recovery in the aviation sector, even as tourism shows signs of improvement as a result of border entry relaxations during the first quarter.
• More easing of Covid-19 controls announced including pubs and massage parlours being allowed to reopen in 31 provinces from June 1, with masks mandatory.
• The Tourism Authority of Thailand (TAT) hopes to encourage 80 million domestic trips in the first half this year as the downward trend in new Covid infections helps rebuild local travel sentiment.
• The Tourism and Sports Ministry and the TAT are expanding partnerships with airlines and online travel agencies to boost the number of arrivals from Saudi Arabia and the Middle East.
• The Thai outbound market is expected to rebound in the second half as Japan is starting to ease travel rules for tourists, starting with limited tour groups.
• Shares of Jasmine Technology Solution Plc (JTS) were suspended on Friday, with the SET citing "abnormality" in trading. The telecom-turned-crypto company has lost more than a third of its value in the past month as the crypto plunge casts doubt on its plan to expand into bitcoin mining.
• Charoen Pokphand Foods (CPF) and Charoen Pokphand Produce (CPP), part of the agribusiness and food conglomerate CP Group, have teamed up with Gunkul Engineering, a renewable energy developer and construction company, to develop cannabidiol-infused food and beverage products.
• The majority state-owned energy conglomerate PTT Plc has been asked to help the state-run Electricity Generating Authority of Thailand (Egat) relieve the 60-billion-baht financial burden it incurred by providing discounts on electricity bills during the pandemic.
• PTT Oil and Retail Business (OR) plans to strengthen its electric vehicle operations by installing more charging outlets at department stores to serve diners and shoppers.
• Thai Airways International (THAI) posted a 155% increase in revenue and a narrower loss in the first quarter of this year.
• After more than two years without passenger flights, Thai AirAsia X (TAAX) filed for bankruptcy protection, with the case accepted by the Central Bankruptcy Court on Wednesday.

Coming up: Germany will release the May business climate index on Monday and manufacturing PMI on Tuesday. The US will release April new home sales on Tuesday.

• The Reserve Bank of New Zealand will announce its interest-rate decision on Wednesday, Germany will release first-quarter GDP and the US will release April core durable goods orders.
• The US will release first-quarter GDP and April pending home sales on Thursday and Canada will release March core retail sales. Australia will release April retail sales on Friday.

Stocks to watch: Capital Nomura Securities recommends stocks of companies that will benefit from baht depreciation including food and beverage, hospital, ICT and electronics businesses. The brokerage's picks include GFPT, CPF, SAPPE, ASIAN, MEGA, KCE, BDMS, BCH, JMT, JMART, KCE, BE8, BBIK, INSET and CHAYO. Life insurance stocks that will gain from rising bond yields are TIPH, BLA and THREL.

• Asia Plus Securities said the government's easing of Covid control measures will be positive for tourism-related stocks, including MINT, CENTEL, ERW, CPN, CRC, MAJOR, AOT, BEM and AAV.

Technical view: Globlex Securities sees support at 1,600 points and resistance at 1,650. Thanachart Securities sees support at 1,590 and resistance 1,634.