Recap: The US Federal Reserve's less-hawkish view on the pace of interest-rate increases, coupled with policy tweaks by the Bank of Japan, buoyed global stock markets last week. The Thai bourse tracked global movements before profit-taking set in on Friday, while a huge tender offer for Jasmine International (JAS) shares also created a bounce.
The SET index moved in a band of 1,467.55 to 1,506.70 points before closing on Friday at 1,492.88, up 0.9% from the week before, in turnover averaging 51.15 billion baht a day. Institutional investors were net sellers of 1.9 billion baht. Brokers were net buyers of 1.7 billion baht, foreign investors bought 43.8 million net and retail investors 160.8 million.
Big movers: JAS led in both turnover and volume, rising 9.8% to 7.30 baht. TRUE was steady at 7.15 baht and JAS-W3 -- also the second most active in volume -- rose 15.6% to 3.70 baht. NEWS was the top gainer, adding 80% to 0.10 baht, and NTV was the top loser, sliding 24.4% to 38 baht.
Newsmakers: The SET is investigating JAS price movements after its CEO and largest shareholder made a surprising tender offer. Pete Bodharamik proposes to buy 4.09 billion shares and 2.73 billion W3 warrant units in a deal worth up to 40 billion baht. The offer price is 7.25 baht per share and 3.68 baht per W3. He told the SET that the offer was aimed at creating better management, but market watchers believe it is intended to pave the way to sell Jasmine's fixed-line broadband business, speculation that pushed share and warrant prices above the offer prices.
The US Federal Reserve left key interest rates unchanged at 0.25% to 0.5% but strongly signalled it could raise rates in December as the labour market continued to improve. Analysts now project a less aggressive pace of rate increases next year and in 2018.
The Bank of Japan modified its monetary policy last week with a new focus on targeting interest rates on government bonds to achieve its inflation target, after years of money printing failed to jolt the economy out of stagnation. The central bank said it would buy long-term government bonds as necessary to keep 10-year yields at current levels of around zero, rather than letting them fall into negative territory, to the relief of big investors such as banks and insurers.
China's banking sector could be facing an imminent debt crisis, the Bank for International Settlements (BIS) has warned. It noted that China's credit-to-GDP gap reached a record high of 30.1% in the first quarter, far above the 10% level thought to present a risk to a country's banking system.
The Organisation for Economic Cooperation and Development (OECD) forecast global growth of just 2.9% this year, down from 3.0% in its last estimate in June.
Indonesia's central bank escalated efforts to spur lending by cutting its benchmark interest rate for the fifth time this year, by 25 basis points to 5%. Bank Indonesia (BI) also cut overnight deposit and lending rates to banks by 25 basis points.
Finance Minister Apisak Tantivorawong said the government would introduce new stimulus measures, targeting agriculture specifically, in an effort to increase consumption.
Domestic car sales turned positive in August, rising 2.6% year-on-year to 63,609 units, the Federation of Thai Industries (FTI) reported. However, overall car production slipped 1.8%, export volume fell 7.6% and export value was down 3.4%.
The government wants to revive the concession regime for future communication satellites instead of the licensing system under which Thaicom (THCOM), the country's sole provider, now operates. Deputy Prime Minister Prajin Juntong said the government's share of revenue from licensing was lower than it was when concessions were in force. The new Digital Economy Ministry hopes to meet with THCOM to discuss the new fee structure next month.
The Board of Investment (BoI) reports stronger interest from digital-based businesses, with 155 project applications worth 2.5 billion baht in the first seven months of 2016. It said it was confident that the total of investment applications would reach 550 billion baht this year, with total real investment value of 700 billion, including 300 billion in the first half.
Industry confidence fell for the third straight month in August. The FTI Thai industries sentiment index (TISI) was 83.3 points, down from 84.7 in July, reflecting concerns about the slow recovery in domestic purchasing power, currency volatility and a possible rise in labour costs.
Coming up this week: US new home sales figures for August will be released today, and the Thai manufacturing production index for August is due tomorrow.
US durable goods orders for August are to be released on Wednesday. The same day, Opec and non-Opec producers will end talks on stabilising oil prices, but analysts do not expect any breakthrough.
Final US second-quarter GDP figures and the euro zone consumer confidence index will be announced on Thursday.
Stocks to watch: Finansia Syrus Securities recommends investors hold off and wait for a new round of rallies. It has "buy on weakness" recommendations for stocks with good fundamentals such as ARROW, BCH, BJC, BLA and KTC. Hospitality sector earnings will peak in the third quarter, so some strong stocks in this sector are a good choice. Its technical picks are TISCO, MONO and GUNKUL.
KTB Securities recommends stocks that gain from fund inflows such as PTT, BANPU, IVL and CPF. Also on its list are WICE, SVI and ASK.
Technical view: Finansia Syrus Securities puts support at 1,470 with resistance at 1,510 points. KT Zmico Securities puts support at 1,480 and resistance at 1,528.