SET dips amid local political shock, trade tensions

Recap: Signs that US-China trade talks may be faltering have concerned investors worldwide, with oil prices and Brexit speculation also influencing global market movements. Thailand's stock market plunged in the morning session yesterday before recovering to close down marginally after the surprising announcement that Princess Ubolratana would be the sole prime ministerial candidate of the Thai Raksa Chart Party.

The SET index moved in a range of 1,637.58 and 1,667.01 points before closing at 1,651.68, almost unchanged from the previous week, in moderate turnover averaging 40.52 billion baht a day.

Institutional investors were net buyers of 6.1 billion baht, while brokerage firms bought 847.5 million and foreign investors purchased 206.9 million worth of shares. Retail investors were net sellers of 7.14 billion baht.

Newsmakers: US President Donald Trump has vowed to end what he described as China's "theft" of American jobs. In his State of the Union address, he told the US Congress a trade deal with China would require "structural changes to end unfair trade practices".

European Union leader Donald Tusk said there should be a "special place in hell" for those calling for Brexit with no idea how to carry it out, adding that he hopes PM Theresa May now has a "realistic" plan.

The EU's competition commission has blocked a tie-up between Alstom of France and the rail business of Siemens of Germany, saying it would lead to higher prices.

A major inquiry into scandals at Australian financial services firms has referred more than 20 cases to regulators for possible prosecution and called for substantial changes in the sector.

Shares of businesses tied to the Shinawatra family rallied on Thursday amid rumours, confirmed yesterday, about the Thai Raksa Chart Party's prime ministerial candidate.

Rising anxiety over household debt prompted the Bank of Thailand to hold interest rates steady on Wednesday after December's tightening, which was meant to ward off potential financial stability risks.

An amalgamation plan between TMB Bank and Thanachart Bank is expected to be concluded this month after being submitted to Finance Minister Apisak Tantivorawong for consideration.

Seven steel-related associations on Monday petitioned the government for an extension of safeguard measures on imported hot-rolled steel alloy sheets for another three years. Without the protection, they claim the steel industry, which comprises 440 companies and a total investment of 200 billion baht, may collapse.

Billionaire Prasert Prasarttong-Osoth has asked the Securities and Exchange Commission for a seven-day deadline extension of his civil fine payment for manipulation of Bangkok Airways (BA) shares. He and two others are facing fines totalling 500 million baht.

Bank of Ayudhya (BAY) has set a lower non-interest income growth target of 3-5%, down from 7.2% last year, given lingering impacts of the digital transaction fee waiver and regulations on market conduct and debt collection.

Tata Steel, India's largest steelmaker, aims to reduce its business presence in Southeast Asia including Thailand after the local unit completed its share sale to a new venture partnership with a Chinese steelmaker.

Banpu Plc (BANPU) has signed an agreement to acquire a 21.5% stake in FOMM Corp, Japan's compact electric vehicle developer, for US$20 million in a move to expand its presence in the clean energy business throughout Asia-Pacific.

Global Power Synergy Plc (GPSC) expects installed capacity in 2019 to increase by 28% to 1,962 megawatts from domestic and foreign-based projects.

Thai Union Group Plc (TU), the global seafood conglomerate, has partnered with two establishments to set up SPACE-F, aimed at building an ecosystem for food tech startups and supporting the company's expansion into non-seafood businesses.

Coming up: Britain and Canada will release December trade figures on Monday, while Australia will release January business confidence on Tuesday. Britain and the US will release January inflation data on Wednesday.

China will release January trade figures on Thursday and Germany will announce Q4 GDP growth. The US will also release December retail sales. China will release January inflation on Friday.

Stocks to watch: Tisco Securities recommends large-cap stocks expected to benefit from inflows such as BBL, KBANK, SCB, AOT, SCC and MINT. Stocks sensitive to political factors are STEC, SC and PR9, while those benefiting from baht appreciation are SYNEX, COM7, TOA and TVO. It expects good Q4 earnings from ANAN, BJC, BGC, CENTEL, COM7, INTUCH, MTC, PLANB, SCCC, SEAFCO, STEC and SVI.

Bualuang Securities recommends switching holdings of CPALL and increasing the weighting of INTUCH. New stocks expected to be added to the MSCI emerging markets index are MTC and GULF.

Technical view: SCB Securities sees support at 1,630 points and resistance at 1,670. DBS Vickers Securities Thailand sees support at 1,640 and resistance at 1,680.



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