Growing confidence drives stocks up

If you build a sandbox, will they come?

Recap: Global stocks extended their record highs with the MSCI All Country World Index, poised for a fourth weekly advance amid rising confidence. European stocks rallied after the European Central Bank raised its inflation forecast and renewed its pledge to aggressively buy emergency bonds. Emerging market equities rallied while Thai equities continued to climb.

The SET index has evolved in a range of 1,605.31 and 1,636.92 points this week before closing yesterday at 1,636.56, up 1.55% compared to the previous week, for a figure of average daily business of 163.75 billion baht.

Foreign investors were net buyers of 7.45 billion baht and brokers bought 479.28 million baht. Retail investors were net sellers of 6.1 billion baht, while institutional investors sold 1.83 billion baht of shares.

Current actors: Group of Seven leaders at a summit in England pledged to provide at least 1 billion additional doses of coronavirus vaccine over the next year to help cover 80% of the world’s adult population. The United States plans to purchase 500 million doses of Pfizer to be shared internationally.

  • The United States created 559,000 jobs last month as hard-hit sectors rehired workers who had been laid off during the worst days of the pandemic. But analysts have warned that the virus continues to complicate the economy despite massive government stimulus measures.
  • Several of the wealthiest Americans, including Elon Musk and Jeff Bezos, have paid no personal income taxes in recent years, according to an investigative report released Tuesday, which comes as Washington examines new proposals to fight tax evasion.
  • Wealthy G7 countries have approved a plan to ensure the world’s biggest corporations pay a minimum tax rate, possibly around 15%. But Amazon.com can escape it because the tax would apply to companies with a profit margin of 10% or more. Amazon’s margin is less than 7%.
  • China is claiming sweeping powers to seize assets and block business transactions in a new law intended to strike back against sanctions against large Chinese companies by the United States and its allies. Effective immediately, the law aims to counter “hegemonism and the politics of power,” the Xinhua News Agency said.
  • China’s exports rose 27.9% in May as imports grew at the fastest rate in more than a decade as the global economy recovers from the pandemic, official data showed on Monday.
  • Hordes of beaming tourists flocked to the sunny resort town of Malaga on Monday after Spain opened its borders to all vaccinated travelers from around the world.
  • The International Air Transport Association said on Thursday that its digital travel pass would “go live” in the Middle East in the coming weeks, as Europe and the United States relax travel restrictions.
  • Shopee, the market leader for e-commerce in Southeast Asia, plans to expand in Colombia and Chile, reports Reuters. The Singapore-based unicorn launched a pilot project in Brazil in 2019 to test the Latin American market and opened in Mexico in February.
  • Salvadoran lawmakers have passed a law that will make bitcoin legal tender, making it the first country in the world to adopt a cryptocurrency.
  • The revelation this week that U.S. officials recovered most of the bitcoin ransom paid in the recent Colonial Pipeline ransomware attack revealed a fundamental misconception about cryptocurrencies: They aren’t as hard to track as cryptocurrencies. cybercriminals think so.
  • London’s status as a financial hub appears secure despite Brexit, according to a study by London-based think tank New Financial. It found five times more international financial activity in the UK than in France or Germany in 2019, and while there have been a few changes since then, they haven’t done much damage.
  • China’s main banking regulator has warned retail investors to avoid financial derivatives, amid rising volatility in global commodities. Investors who speculate in currency, gold or other commodity futures should pay the same hefty price as those who bet house prices will never fall, said Guo Shuqing.
  • Chinese ridesharing giant Didi Chuxing has filed an application to list its shares in New York City, in what could be one of the biggest IPOs of this year. Early press reports suggest he could raise up to $ 7 billion.
  • The first new auto assembly plant built in Detroit in 30 years was opened by Jeep maker Stellantis AV, which has invested $ 1.6 billion in the facility and will hire 2,100 local workers.
  • The third wave of the pandemic is expected to end in July, which could support Thai economic growth of 5% in the last quarter if the government can maintain a vaccination rate of 400,000 doses per day, according to the Kasikorn Research Center.
  • Thailand is targeting 3 million foreign tourists this year, linked with a gradual reopening to vaccinated visitors later this year, the Tourism Authority of Thailand said on Wednesday.
  • The government officially approved the reopening of Phuket to foreign tourists vaccinated from July 1. But the complete lack of Chinese travelers and the requirement for visitors to stay on the island for 14 days (instead of 7) before going elsewhere means expectations are low.
  • South Korea is in talks with Thailand for travel bubble deals that would also include Singapore, Taiwan, Guam and Saipan to revive tourism.
  • Bank of Thailand will allow commercial banks to pay interim dividends because lenders are strong and have sufficient capital to withstand the impact of Covid outbreaks, Governor Sethaput Suthiwartnarueput said Thursday.
  • The Federation of Thai Industries (FTI) is in talks with the Chulabhorn Royal Academy to purchase Chinese-made Sinopharm vaccines for workers and to improve confidence after the Thailand Industry Sentiment Index (TISI) sank for two consecutive months.
  • The state-private partnership plans to start distributing Sinopharm vaccines to factory workers in five industrial zones and around the port of Map Ta Phut on July 9.
  • The cabinet on Tuesday approved the allocation of 2.25 billion baht to hire 10,000 new college graduates for a year, with the aim of helping those suffering financially from the coronavirus epidemic.
  • Finance Minister Arkhom Termpittayapaisith on Wednesday defended the executive decree to borrow 500 billion baht to tackle the public health crisis, insisting the loan would not exceed the public debt ceiling of 60% of GDP. Previous loans linked to the pandemic pushed that figure to around 58%.
  • New investment measures, including a plan to allow wealthy foreigners to hold 10-year visas, own land and property, and pay a 17% fixed income tax on local income, are yet to be settled.
  • The Commerce Ministry said a new consumer price index (CPI) for services would better reflect changes in prices for services than the existing CPI, which measures headline inflation. A separate Business Confidence Index (CCI) is also in preparation for operators in the service sector.
  • Seafood giant Thai Union Group Plc’s venture capital fund has invested in Israeli startup ViAqua Therapeutics, which uses RNA technology to improve animal health in aquaculture.
  • Thai Airways International will launch direct flights from five European cities to Phuket in July, in line with a plan to reopen the island to tourists.
  • Global entertainment giant Walt Disney Company has chosen Advanced Info Service (AIS) to distribute its Disney + Hotstar streaming service in Thailand, with expected success given the growing popularity of streaming services since the start of the pandemic.
  • Thai stocks are expected to rise 3-5% per month over the next two months, with foreign funds returning to the stock market as vaccinations resume and foot traffic in retail stores picks up, Asia Plus Securities said.
  • The SET-listed Bangkok Aviation Fuel Services Plc (BAFS) will acquire another renewable power plant at around 700 million baht to offset the drop in revenues from its refueling business during the pandemic. It recently acquired seven operational solar farms with a combined capacity of 34.4 megawatts.

To come up : The eurozone and Japan will release April industrial production data on Monday and Canada will release April manufacturing sales. The Reserve Bank of Australia (RBA) will announce the minutes of the monetary policy meeting on Tuesday, Germany will release inflation data for May and the eurozone will release April trade balance figures. On the same day, the United States will release May retail sales, producer prices and industrial production updates.

  • China will release May industrial production and fixed capital investment figures on Wednesday, Canada will release May inflation data, and the United States will release housing starts and building permits in May.
  • The US Federal Reserve will announce the results of its latest policy meeting Thursday morning, Thai time. New Zealand will release first quarter GDP data, Australia will release employment data in May, and the euro area will release inflation in May. Germany will release producer prices for May on Friday.

Actions to watch out for: SCB Securities recommends actions related to vaccines, reopening, raw materials and electric vehicles. Its choices are BCH, PM, TPAC, WICE, SFT, CPW, TWPC, TMT, PTTEP, TVO, EA, GPSC, KCE and GULF.

UOB Kay Hian Securities recommends lagging stocks in telecommunications, REITs and electricity. Its choices are ADVANC, RATCH, EGCO, CPNREIT, BTS, BTSGIF and BEM. Other interesting themes are energy, petrochemicals, agriculture, insurance, steel, digital television, logistics and maritime transport. Choices include PTT, PTTGC, IVL, IRPC, TVO, CPI, TU, CPF, THRE, TIP, TQM, TSTH, GJS, AMC, BEC, WORK, MONO, JKN, SONIC, NCL, TTA, PSL, and RCL.

Technical view: UOB Kay Hian Securities sees support at 1615 and resistance at 1680. Phillip Securities sees support at 1600 and resistance at 1660.


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