Recap: Most regional bourses plummeted as foreign investors sold equities and moved into safer havens including gold after US Federal Reserve minutes showed that officials supported scaling back stimulus this year. Disappointing economic growth also weighed on Thai market sentiment.
The SET Index on Friday recorded its lowest close since Dec 7, at 1,338.13 points, down 7.4% from a week earlier, with heavy average daily turnover of 49.87 billion baht. It moved in a wide range of 1,351.81 to 1,438.78.
Foreign investors were net sellers of 24.82 billion baht and brokers 5.97 billion baht, while local institutions were net buyers of 9.15 billion baht and domestic retail investors bought 21.65 billion baht.
Big movers: KBANK led in turnover, falling 12.7% on the week to 162 baht. INTUCH sank 15.4% to 75.75 baht and SCB slid 12.4% at 141.5 baht. TMB led in volume on speculation that Malaysia's Maybank and Japan's Mizuho Financial Group would seek stakes. The stock rose 3.2% to 2.60 baht. Far East DDB (FE) was last week's top gainer, up 12.2% to 230 baht. Food and Drink (F&D) was the top loser, down 25.7% to 26 baht.
Newsmakers: Investors' concerns grew that the next Fed meeting on Sept 17-18 will bring news of a reduction in its $85 billion in monthly asset purchases.
- The baht on Thursday weakened beyond 32 to the dollar, a three-year low, on capital outflows.
- Thailand's economy expanded at a weak 2.8% annual rate in Q2, but contracted 0.3% quarter-on-quarter on tepid consumption and exports. The second straight quarter of contraction marks a technical recession. The National Economic and Social Development Board revised down its full-year GDP forecast to between 3.8% and 4.3% from 4.2% to 5.2% earlier.
- The Monetary Policy Committee voted 6-1 to keep the benchmark interest rate at 2.5%. Concern about rising household debt and capital outflows outweighed the benefits of a rate cut to spur the slumping economy.
- Hire-purchase loans grew at a slower pace in July. All of the three large auto lenders _ Tisco, TCAP and KKP _ reported aggregate loan growth rate of just 0.6% month-on-month, the lowest in a year.
- Central Pattana has budgeted 12-14 billion baht to invest in new shopping complexes as well as mergers and acquisitions, including possible expansion to Malaysia, Indonesia, Vietnam and Myanmar.
- PTT Global Chemical has cut output at its ethylene cracker by 10% on lower gas and feedstock supply due to the shutdown of parent PTT's fifth gas separation plant after a lightning strike.
- Tata Steel (Thailand) expects a better performance in Q4, helped by duties on Chinese imports. President Peeyush Gupta predicts an increase in demand and prices of steel in the next quarter even if economic growth slows.
- PTT plans to spend 2.45 billion baht from its five-year budget through 2015 to expand its retail oil business in Asean.
Coming up this week: US durable goods orders for July will be released today.
- Thailand will announce trade data this week.
- Thailand Focus 2013 will be held on Wednesday and Thursday.
Stocks to watch: Finansia Syrus Securities recommends buying TCAP and KKP after prices fell on the sharp drop in hire-purchase loans in Q2, noting they offer dividend yields of 4-6%. It also recommends AMATA on expectations that land sales will reach its 3,000-rai target this year, with a gain from Amata VN's listing also.
Asia Plus Securities recommends stocks that benefit from baht depreciation if revenue is in US dollars, among them SCC and CPF.
Technical view: Finansia Syrus expects the SET Index will fall to between 1,280 and 1,330 in the worst case, but with good opportunities to snap up shares for long-term investment. Krungsri Securities sees support at 1,300 and 1,280 and resistance at 1,358 and 1,370.
About the author
Writer: Nuntawun Polkuamdee & Darana Chudasri