Strong economic indicators cheer global investors

Recap: Global shares headed higher on Friday as US futures and commodity prices advanced ahead of jobs data that was expected to cap a series of strong economic reports. Forecast-beating Chinese trade figures also lifted sentiment.

The SET index moved in a range of 1,551.42 and 1,589.21 points this week before closing yesterday at 1,585.03, up 0.12% on the week, in daily turnover averaging 104.1 billion baht.

Retail investors were net buyers of 9.41 billion baht. Foreign investors was net sellers 6.02 billion baht, brokers sold 2.4 billion and institutional investors offloaded 997.75 million baht worth of shares.

Newsmakers: Pharmaceutical firms have attacked a US-backed proposal to temporarily waive patent protection for Covid vaccines, saying it could threaten future innovations and would not speed up production as Washington claims. Germany also opposes the idea.

• The US economy is likely to see its fastest growth in nearly four decades this year, but the short-term inflation spike that will come with the rebound is not a cause for concern, a top Federal Reserve official said on Monday.
• China on Thursday suspended an economic agreement with Australia, in an apparent tit-for-tat response to Canberra’s scrapping a Belt and Road infrastructure pact and a threat to undo a deal leasing Darwin Port to a Chinese company for 99 years.
• The mobile operator Telenor plans to stay in Myanmar for now, but the future is uncertain, CEO Sigve Brekke said this week. The Norwegian firm has booked a $783-million asset impairment write-down on its operation in the country where the military junta has severely limited mobile and internet access.
• Europe is looking at easing travel restrictions on foreign tourists as early as next month, if they are fully vaccinated or come from a country with Covid under control, officials said on Monday.
• Asean, the Asian Development Bank (ADB) and the IMF have agreed that economic prospects in this region and the world are expected to see a rapid recovery following global inoculations.
• Google is working on a new security feature that will let Android device users see what data developers collect about them and share. Android app developers have until the second quarter of 2022 to declare the information.
• IBM says it has developed the world’s first 2-nanometre chipmaking technology, which could be up to 75% more power-efficient as current chips and allow a smartphone to last 4 days on one charge.
• Gold was trading yesterday near a 10-week high above $1,810 an ounce, aided by a pullback in the dollar and Treasury yields as investors awaited US payrolls data for further cues on the health of the economy.
• The cabinet has approved plans for another 225 billion baht in financial relief to low-income groups to cope with the economic hit from biggest Covid-19 outbreak since pandemic began.
• The Federation of Thai Industries (FTI) is planning to provide full support for a state-private inoculation programme, which aims to achieve a target of 100 million doses before the year-end deadline.
• The Department of Intellectual Property has rejected a new patent application from the Japanese drug favipiravir, paving the way for local production of the antiviral medication now widely used to treat Covid-19 patients.
• The Export-Import Bank of Thailand (Exim Thailand) vows to offer loans with a special low interest rate and longer grace period to promote future industries.
• Energy authorities are preparing to extend the power discount period for households and businesses to reduce monthly expenses during the third Covid wave due to work-from-home orders.
• The Bank of Thailand slashed its economic growth forecast for 2021 on Wednesday for the second time this year, to 1-2%. It also left its key interest rate unchanged at a record low of 0.5%, as expected, preserving its limited ammunition as the economy struggles with a third Covid wave.
• Shares of Don Muang Tollway (DMT), the elevated toll road operator, shot up to 18.80 baht on their first trading day yesterday but closed at 15.90, 10 satang below the initial public offering price of 16 baht.
• Liquidity in the domestic banking sector has been declining due to higher deposit withdrawals by business operators attempting to cope with the impact of the prolonged pandemic.
• Thai shippers upgraded their export growth forecast to 6-7% this year from a 3-4% projection in December, helped by the global recovery and healthy exports of industrial products such as automobiles, electrical appliances, equipment and parts, plastic pellets and chemicals.
• The value of border and transit trade rose 19.3% year-on-year to 384 billion baht in the first quarter this year, driven mainly by trade with Malaysia and rising demand for Thai rubber.
• Thailand saw its rice exports dive 23% in the first quarter year-on-year to 1.13 million tonnes because of higher prices than those of competitors.
• Chiang Mai tourism operators have expressed optimism that they can begin welcoming vaccinated foreigners, mainly from Asia, by Oct 1 under the so-called sandbox pilot programme. They believe the northern province will receive a windfall from the Phuket sandbox, which is scheduled to start on July 1.
• The number of Covid-19 cases in Phuket must reach zero before it reopens to foreign tourists on July 1 as scheduled under the sandbox scheme, says Phiphat Ratchakitprakarn, the tourism and sports minister.
• Consumer confidence hit a record low in April, dented by a new wave of Covid infections, which could cost the economy as much as 600 billion baht if it cannot be contained this month, the University of the Thai Chamber of Commerce said on Thursday.
• The consumer price index (CPI) rose in April for the first time since March 2020. The annualised inflation rate of 3.4% was the highest in over eight years, given the low base of the previous year. It reflected higher fuel and food prices as well as the expiry of subsidies on utility bills.
• Average fuel consumption contracted by 7.7% to 138.9 million litres per day in the first quarter due mainly to the recurrence of Covid-19, says the Department of Energy Business.

Coming up: Australia will release March retail sales and April business confidence on Monday. Japan will release March household spending on Tuesday. The same day, China will release April inflation data and Germany and the euro zone will release May economic sentiment. Opec will issue its monthly oil market report and the US will release its short-term energy outlook.

Germany and the US on Wednesday will release April inflation data, the US will announce weekly crude oil stock changes and the euro zone will release March industrial production. The US will release April producer prices on Thursday.

The US will release April retail sales and the import-export price index and April industrial production on Friday.

Stocks to watch: UOB Kay Hian Securities recommends petrochemicals and energy stocks. Its picks are PTT, PTTGC, IVL and IRPC. For food and agriculture players, the brokerage recommends TVO, CPI, TU and CPF. Stocks with prospects for reporting good first-quarter results are SCC, BANPU, SUPER, TVO, PTT, FTREIT, WHART, EASTW, WHAUP and PTG. Stocks that will benefit from rising demand for Covid insurance are THRE, TIP and TQM.

Finansia Syrus Securities recommends stocks with growth potential in May including BCH, CPALL, ITEL, STEC and TU.

Technical view: Thanachart Securities sees support at 1,550 points and resistance 1,600. Maybank Kim Eng Securities sees support at 1,566 and resistance at 1,600.