Daily Market Outlook 19 Jun 2015
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Daily Market Outlook 19 Jun 2015 Up on policy hopes Expect the SET to adjust up today, with local uncertainties Major Indices Close Chg %Chg overridden by global optimism. Locally, uncertainties regarding SET 1,508.04 -6.8 -0.4 MERS and ICAO on the tourism industry weigh on the bourse. SET50 991.03 -5.8 -0.6 Globally, dovish interpretations of the Fed-policy forecasts and SET P/E (x) 20.2 strong US data provide a powerful one-two for equities, while SET P/BV (x) 2.1 SET Div. Yield (%) 2.9 hopes of a positive outcome from an emergency meeting on Dow Jones 18,115.84 +180.1 +1.0 Greece Monday also provide support for the SET. S&P 500 2,121.24 +20.8 +1.0 NASDAQ 5,132.95 +68.1 +1.3 Pick of the day: MINT (Bt30; NR; 15TP Bloomberg Bt35.79) UK 6,707.88 +27.3 +0.4 MINT should be among the biggest beneficiaries of the Germany 11,100.30 +122.3 +1.1 continued growth in global tourism this year and recovery in France 4,803.48 +12.9 +0.3 Thailand’s tourism industry after last year’s political instability. Japan 19,990.82 -228.5 -1.1 The United Nation’s World Tourism Organization (UNWTO) South Korea 2,041.88 +7.0 +0.3 forecasts strong global tourism growth of 4.0% this year, Hong Kong 26,694.66 -59.1 -0.2 China 4,786.17 -181.7 -3.7 particularly in the US and Asia Pacific. As MINT has Taiwan 9,218.37 +28.5 +0.3 considerable presence in 22 countries for its hotels and resorts Singapore 3,300.42 -25.5 -0.8 as well as food chains in Asia Pacific, it is in a strong position Malaysia 1,718.12 -8.7 -0.5 to capitalize on this trend. In 2015, MINT’s earnings should be Indonesia 4,945.50 -0.3 -0.0 solid thanks to strong demand recovery for hotels, especially Philippines 7,606.86 +70.6 +0.9 in Bangkok, and additional 2,151 rooms in 1Q15, mostly from Trading Summary Buy Sell Net M&A. The company also plans to increase its number of food Institution 4,743 6,678 -1,935 Proprietary 4,069 4,187 -119 & beverage outlets by 8-10% YoY this year which should help Foreign 10,881 10,343 538 total food sales (TSS) to grow by 10% while same store sales Individuals 20,933 19,417 1,515 should also improve from better consumer sentiment. Total Trading Value 40,625 Btmn According to Bloomberg earnings consensus, MINT’s earnings Most Active Value Value Close %Chg growth this year is expected to be a robust 25.5%, decelerating AOT 3,909 307.00 -3.2 to 17.8% in 2016. MINT’s price pattern suggests that the PTT 1,471 355.00 - KBANK shares are currently in a consolidation period. A daily buy 1,414 200.00 0.5 JAS 1,385 6.10 -0.8 signal will occur when the share price breaks Bt30.50 after IRPC 1,091 4.12 -3.7 which an important target is Bt31.75. (Resistance: 30.50, Commodity Futures Close Chg %Chg 31.00, 31.50; Support: 29.75, 29.25, 28.75) US Crude 60.45 +0.5 +0.9 Brent Crude 64.26 +0.4 +0.6 Local issues Gold 1202.00 +25.2 +2.1 Pridiyathorn says economy will pick up soon. MR FX Rates Close Chg %Chg USD/THB 33.63 +0.0 +0.1 Pridiyathorn Devakula has remarked that the Thai economy EUR/USD 1.14 +0.0 +0.2 should pick up pace from September following a one-year USD/JPY 122.95 -0.5 -0.4 downward correction. Such a correction, he added was USD/CNY 6.21 -0.0 -0.0 Source: Bisnews, Bloomberg necessary following the previous government’s policies which distorted the market and was bad for sustainable Technical picks (support & resistance) growth – such as the first-time car buyer scheme. (Bangkok MAJOR (S: 31.25, R: 35.50); BH (S: 181.00, R: 199.50); Post) LH (S: 9.05, R: 9.45); SET (S: 1,492, R: 1,527) Fears of red flag fall-out. Thai officials and airline executives said the red flag imposed by the International Civil Aviation Organization (ICAO) on Thailand’s aviation safety supervision could result in more countries putting flights operated by Thai-registered airlines to their airports under closer scrutiny or even curb them. The European Aviation Safety Agency (EASA) has informed Thai Thailand Research Department authorities it will make an announcement on the issue next Mr. Warut Siwasariyanon (No.17923) Tel: 02 680 5041 Thursday. (Bangkok Post) Mr. Krit Suwanpibul (No.17968) Tel: 02 680 5090 Mr. Narudon Rusme, CFA (No.29737) Tel: 02 680 5056 Mr. Napat Siworapongpun (No.49234) Tel: 02 680 5094 1 Please see disclaimer on last page Daily Market Outlook 19 Jun 2015 Thailand could be hub for GMS investment, says NZ. The New Zealand ambassador said yesterday Thailand could become an investment hub of the Greater Mekong Sub-region after AEC comes to fruition this year. This would depend on factors such as economic growth and infrastructure development, however, the ambassador added. The New Zealand government also aims to discuss trade agreements with Thailand further. (The Nation) The disposable-water level at nine dams has dropped below 10% of their capacity, reflecting the severity of the drought in Thailand. As of yesterday, drought had already hit 23 provinces. Authorities have asked farmers in the Chao Phraya Basin to postpone growing rice till late July. The Bhumibol Dam, for example, had just 363mn cubic metres of water on Tuesday, or 3% of its capacity. The Sirikit Dam had just 697mn cubic metres of water, 7% of its capacity. Both are major dams in Thailand. (The Nation) First MERS case in Thailand. The Public Health Ministry said yesterday a 75-year-old man from Oman has tested positive for the Middle East Respiratory Syndrome (MERS) and has now been quarantined. Authorities are also monitoring 59 people suspected of coming into contact with the patient during and after his journey to Thailand. Meanwhile THAI has set out seven strict measures to deal with the Mers virus, including disinfecting cabins and monitoring staff hygiene. (Bangkok Post) DTAC appeals against the Central Administrative Court injunctive relief order which prohibits it from installing 2.1GHz equipment under the license scheme to its towers under the concession agreement with CAT. DTAC claimed that this prohibition was against the law principle that encourages infrastructure sharing for the sake of overall telecom efficiency and environment. (The Nation) Global issues Euro zone leaders will hold an emergency summit on Monday to try to avert a Greek default, after bank withdrawals accelerated and government revenue slumped as Athens and its international creditors remained deadlocked over a debt deal. Finance ministers of the 19-nation currency bloc failed to make any breakthrough at the Eurogroup meeting in Luxembourg on Thursday, just 12 days before Greece must make a crucial debt repayment to the IMF. The ECB told the meeting of euro zone finance ministers it was not sure if Greek banks would be able to open on Monday. (Reuters) USA Wall Street shares finished sharply higher on Thursday, with the Nasdaq making a new intraday all-time high since the dot-com era, bolstered by a series of strong economic data and a report of possible concessions made to Greece by its international creditors, which was later denied by EU. (Reuters) US consumer prices in May recorded their largest increase in more than two years as gasoline prices surged, suggesting the drag on inflation from lower oil prices was fading. The CPI rose 0.4% last month after gaining 0.1% in April. That was the largest increase since February 2013, and left the CPI unchanged in the 12 months through May after a 0.2% yearly decline in April. (Reuters) The US jobless claims fell to a near 15-year low last week. Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 267,000 for the week ended 13 Jun. It was the 15th straight week that claims held below 300,000, a threshold usually associated with a firming labor market. (Reuters) 2 Please see disclaimer on last page Daily Market Outlook 19 Jun 2015 Factory activity in the mid-Atlantic region accelerated to a six-month high in June. The Federal Reserve Bank of Philadelphia showing its business activity index jumped to a reading of 15.2 in June, the highest level since December, from 6.7 in May. (Reuters) The Conference Board’s Leading Economic Index rose 0.7% in May after a similar gain in April. (Reuters) Europe European stock markets recovered ground on Thursday boosted by a rise in mining shares although the Athens bourse touched 3-year lows on mounting worries over Greece's debt crisis. (Reuters) Asia One-third of Japanese firms say their profit plans for this business year would be hurt at current yen levels of around 120 to 125 to the dollar, and that increases to a majority of companies if the currency weakens further to 130. Concerns have grown that a further rapid depreciation in the yen could damage even an export-reliant economy like Japan, as import costs have spiked. Those include raw materials and fuel. BOJ Governor Haruhiko Kuroda last week put a floor under the yen by saying it was unlikely to fall further because it was already very weak.