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The roller-coaster continues

Recap: The Stock Exchange of Thailand caught the S&P Flu along with the rest of the world last week but staged a modest rebound after the US Federal Reserve pledged to keep interest rates near zero for two more years if that’s what it takes to get the world’s largest economy moving again.

Recap: The Stock Exchange of Thailand caught the S&P Flu along with the rest of the world last week but staged a modest rebound after the US Federal Reserve pledged to keep interest rates near zero for two more years if that’s what it takes to get the world’s largest economy moving again.

The SET index moved between 1,033.38 and 1,087.16 points and closed a four-day trading week at 1,062.07 points, down 2.86% from a week earlier.

Foreign investors _ spooked by Standard & Poor’s move to trim Washington’s credit rating _ were big net sellers of 17.9 billion baht in Thai shares on the week. Local institutions sold 4.31 billion baht while brokers bought 132.36 million and retail investors 22.07 billion.

Big movers: Energy and banking sectors remained in play due to their large market capitalisation. PTT closed at 315 baht, down 4.55% from the previous week. KBANK declined 2.3% to 129 baht, BBL shed 3.1% to 158 baht, and SCB was down 0.8% at 117.5 baht.

– Bangkok Life Assurance (BLA) shares continued their steady rise after reporting record-high operating results, with analysts saying the company’s fundamentals remained strong. BLA rose 3.2% to end the week at 57 baht.

Newsmakers: Prime Minister Yingluck Shinawatra and her 35-member cabinet were endorsed by His Majesty the King and they are expected to move quickly to fulfil some of their promises. Two key economic ministers are no strangers to the local capital markets: former SET president Kittirat Na-Ranong as Deputy PM and Commerce Minister, and former SEC chief Thirachai Phuvanatnaranubala as Finance Minister.

– Brokerages were in the spotlight with tender offers arising from acquisition agreements announced earlier. UOB Kay Hian bought 168,816,704 shares of United Securities at 5.58 baht per share in an offer that will run until Aug 26. OSK Investment Bank Berhad of Malaysia bought 400,465,640 shares in BFIT Securities (BSEC) at 2.5745 baht each in an offer that expires on Sept 9.

– Hitachi Transport System (Thailand) and Hitachi Transport System Asia Pte bought 701,819 shares of Eternity Grand Logistics (ETG) at 5.74 baht each.

Coming up this week Expect more signals from new ministers about their priorities as they settle into their offices. The Pheu Thai-led government must formally announce its policies to Parliament within 15 days of royal endorsement.

– In Europe, more drama awaits after attention turned to France last week. Paris denied market rumours that it might be the first seriously big European economy to lose its AAA credit rating. At SocGen, meanwhile, executives are hunting for the rumour-mongers who pushed its shares down by 20% at one point on speculation, which the Paris bank denied, that it might be more exposed to Greek debt than any bank should be.

– The good news? All the anxiety in the US and Europe means fund flows are expected to return soon to healthier Asian economies.

Stocks to watch: Asia Plus Securities foresees more volatility on the SET this week with daily swings in the range of 3%. With US economic growth near zero and maybe even a recession in the medium term, ASP recommends selective buys of stocks with good fundamentals and high dividends. ASP has 13 stocks on its shopping list: ADVANC, RATCH, BTS and CPF, all with market cap exceeding 30 billion baht; BECL, KK, SPALI and MAJOR, capitalised at 10-30 billion; and among the smaller-caps: ASK, SIRI, THAN, SENA and TK.

– DBS Vickers Securities recommends high-dividend stocks such as AS, ADVANC, DTAC, CSL, TMT, MCS, MODERN, QHPF, SPF, MNIT, LPN, SPALI, TICON, DCC, SNC, MK, PF, and SIRI.

Technical view: Asia Plus sees support at 1,040 points and resistance at 1,080, and in the worst-case scenario, resistance might be below 1,000 points. Thanachart Securities sees support at 1,035 points and resistance at 1,080.

Source: Bangkok Post

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