6 nov 2015 · 2015-11-06 · daily market outlook 6 nov 2015 2 please see disclaimer on last page...

Daily Market Outlook 6 Nov 2015

1

Please see disclaimer on last page

Looming Fed rate hike

Thai shares today look set to trade in a narrow range, with a negative bias, as investors take a cautious stance ahead of a crucial US job data report tonight that could reinforce the likelihood of a Fed rate hike. Locally, the first pick up in consumer confidence in 10 months, should help alleviate overall economic concerns and limit market losses (if any). The NBTC’s pledge to go ahead with the 4G auction as scheduled helps ease some uncertainty in the telecom sector.

Pick of the day: TCAP (Bt34.75; BUY; 16TP AWS Bt40.00) Thanachart Capital PCL is our pick of the day because of its ongoing improvement in asset quality. Though many banks have been affected by the economic downturn, which has led to higher NPLs, TCAP revealed at its analyst meeting on Wednesday that its NPL ratio is on a decreasing trend at 3.5% in 3Q15 from 3.8% in 2Q15. The bank expects its NPL ratio to continue to decline to below 3.0% in 2016. Additionally, TCAP currently has tax savings of approximately Bt5bn, which can be used to set aside extra provisions to enhance its coverage ratio. Also, the company aims to diversify its portfolio by reducing the proportion of hire-purchase (HP) loans and emphasizing other segments such as retail banking. We estimate FY15 and FY16 earnings growth of 8.2% and 12.3%, respectively. The counter also has an attractive dividend yield of 5.6%. A buy signal has recently occurred in its daily and weekly charts. If TCAP manages to close above Bt35.00 by the end of this month, a monthly buy signal will appear, confirming the reversal from downtrend to uptrend. TCAP is likely to adjust up to break an immediate target at Bt36.25 before rising further to test the next target at Bt38.75. (Resistance: 35.25, 36.00, 36.50; Support: 34.25, 33.75, 33.00)

Local issues

Consumer confidence rebounds. The consumer

confidence index for October rose for the first time in 10

months to 73.4 points from 72.1 in September, echoing

positive prospects for stronger economic growth late this

year and next year. The government’s economic stimulus

package continues to inject money into the economy and

each industry, making consumers feel more optimistic

about spending their money on durable goods and travel.

(The Nation)

Plan to further secure gas supply after EGAT cited that

sizable power plants on the West region are now over-

dependent on gas supplies from Myanmar. Thailand has

also faced more disruptions of gas in recent years due to

maintenance requirements of the gas fields and

unexpected events adversely affecting the Thai gas and

power industries. PTT is now doubling the capacity of its

LNG receiving terminal by 2017, and also building an east-

west gas pipeline loop to integrate supply from various

domestic and foreign sources, helping boost national gas

security. (The Nation)

Major Indices Close Chg %Chg

SET 1,413.16 -10.3 -0.7

SET50 913.30 -8.3 -0.9

SET P/E (x) 18.7

SET P/BV (x) 1.9

SET Div. Yield (%) 3.1

Dow Jones 17,863.43 -4.2 -0.0

S&P 500 2,099.93 -2.4 -0.1

NASDAQ 5,127.74 -14.7 -0.3

UK 6,364.90 -48.0 -0.7

Germany 10,887.74 +42.5 +0.4

France 4,980.04 +31.8 +0.6

Japan 19,116.41 +189.5 +1.0

South Korea 2,049.41 -3.4 -0.2

Hong Kong 23,051.04 -2.5 -0.0

China 3,524.26 +64.6 +1.9

Taiwan 8,850.18 -6.8 -0.1

Singapore 2,879.59 -16.2 -0.6

Malaysia 1,688.54 +2.9 +0.2

Indonesia 4,577.23 -35.3 -0.8

Philippines 7,122.45 -78.6 -1.1

Trading Summary Buy Sell Net

Institution 3,770 4,135 -365

Proprietary 4,560 3,694 866

Foreign 9,117 8,456 660

Individuals 26,594 27,755 -1,161

Total Trading Value 44,041 Btmn

Most Active Value Value Close %Chg

ITD 3,379 7.70 -6.7

JAS 2,583 5.90 1.7

ADVANC 1,584 230.00 -1.3

PTT 1,575 294.00 -1.7

SCI 1,512 10.70 -0.9

Commodity Futures Close Chg %Chg

US Crude 45.20 -1.1 -2.4

Brent Crude 47.98 -0.6 -1.2

Gold 1104.20 -2.0 -0.2

FX Rates Close Chg %Chg

USD/THB 35.55 +0.0 +0.1

EUR/USD 1.09 +0.0 +0.2

USD/JPY 121.74 +0.2 +0.2

USD/CNY 6.35 +0.0 +0.2

Source: Bisnews, Bloomberg

Technical picks (support & resistance)

AMATA (S: 13.70, R: 15.40); BMCL (S: 1.81, R: 2.06);

BECL (S: 35.25, R: 39.75); SET (S: 1,394, R: 1,432)

Thailand Research Department

Mr. Warut Siwasariyanon (No.17923) Tel: 02 680 5041

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


2


NBTC is confident that the two auctions for 1,800MHz licences and two

900MHz licences would take place as scheduled on 11 Nov and 15 Dec,

respectively, even as CAT plans to sue to prevent the auction. Deputy PM

Wissanu urged the NBTC to move ahead with the auctions. The NTBC’s

Secretary-General cited a resolution of the now-defunct state-run Frequency

Allocation Panel, which states that the terms of the mobile-phone spectra

would expire on the same day as the mobile-phone service concessions

expire. (The Nation, Bangkok Post) Comment: Although there are some

issues that add more risk to the auctions, we believe they will go on as

scheduled, and this should benefit ADVANC (Bt230, 2016 TP Bt271) the

most while DTAC (Bt62.50, 2016 TP 62.50) should face pressure from

more 4G competition.

TOT, ADVANC reached tentative deal on towers for a long-term lease of

13,000 telecommunications towers. Previously, ADVANC had proposed a

joint venture to manage the towers, but TOT Plc. insisted that those towers

were its assets. Therefore, ADVANC decided to withdraw the dispute from

arbitration and went for a lease agreement. (The Nation) Comment: We

think this is a good way of ADVANC to gain favor with TOT, not only to

secure its existing network coverage, but also enhance the likelihood

that TOT will choose ADVANC as its strategic partner to mutually

operate TOT’s 2.1 GHz spectrum (and maybe 2.3 GHz).

BECL informed to SET that the draft concession agreements which BECL

and BMCL are already contractual parties to have been considered by the

Office of the Attorney General. The drafts are in the process of going to the

Cabinet for approval of the amalgamation, and expected to be approved by 8

Dec 2015. The meeting between BECL & BMCL will be held 28 Dec 2015

(XM 19 Nov 15) to consider matters relating to the new company. The record

date for determining the shareholders’ right to receive allocation of shares in

the new company is scheduled for 23 Dec 2015. The shares of BECL and

BMCL will post SP sign 21-30 Dec 2015, last day of trade for BMCL & BECL

on SET is 18 Dec 2015. (SET)

Global issues US job report looms: Investors are looking to today's US nonfarm

payrolls report as they gauge whether the Federal Reserve will raise interest

rates in December. According to a Reuters survey, nonfarm payrolls rose

180,000 in October, well above the average gain of 139,000 jobs for August

and September. The unemployment rate is forecast at 5.1%. (Reuters)

Bond yields rise: US 2-year Treasury yields hit their highest in 4-1/2 years

on Thursday on intensifying expectations for a December Fed liftoff, while

long-dated yields also rose on fresh corporate bond issues. (Reuters)

USA Wall Street stocks inched down on Thursday weighed down by energy

shares and on mixed tech and healthcare earnings results a day ahead of

Friday's US non-farm payrolls report. Energy shares led the market down as

crude prices fell. Qualcomm and Biotech Celgene released downbeat

forecast and results, respectively, while Facebook reported strong quarterly

results. (Reuters)

Biotech sector hit by probe: A US Senate panel on Wednesday launched

a probe into drug price increases, seeking documents from four drugmakers

including Valeant Pharmaceuticals. The probe hit the entire biotech group.

(Reuters)


3


US jobless claims recorded their largest increase in eight months, but

remained at levels consistent with a fairly healthy labor market. Initial claims

for state unemployment benefits increased 16,000 to a seasonally adjusted

276,000 last week. It was the largest weekly increase since late February.

However, the number marked the 35th straight week that claims were below

the 300,000 threshold associated with a strong jobs market. (Reuters)

Productivity increased at a 1.6% YoY in 3Q15 after advancing at an

upwardly revised 3.5% in 2Q15. Manufacturing productivity grew at its fastest

pace in four years, led by the durable goods sector. Economists had expected

productivity to contract at a 0.2% rate in 3Q15. Despite the surprise rise in

3Q15, the trend in productivity remained weak. 9M15 productivity increased

only 0.4% YoY. That was a slowdown from 0.8% in 6M15. (Reuters)

Europe European shares edged higher on Thursday led by solid earnings reports

from Adidas and Societe Generale, while commodity-related stocks were hit

by a stronger dollar. (Reuters)

Overall 3Q15 earnings were mixed. In Europe, about 60% of companies

have reported results so far, of which half have met or beaten analysts'

earnings predictions, while the rest have missed, according to Thomson

Reuters StarMine data. (Reuters)

Asia Many BOJ policymakers warned of the damage a prolonged slowdown

in emerging economies could have on exports even as they held off on

expanding monetary stimulus on Oct. 6-7, minutes of the rate review showed

on Thursday. (Reuters)

Mainland Chinese stock markets extended their gains on Thursday as

investors jumped into blue-chip shares, driving transaction volumes to their

highest levels in more than three months. The rally in Shanghai was inspired

by plans to deepen reform of state-owned enterprises and with other signs of

tentative recovery in the Chinese economy. (Reuters)

Appetite for gold in China, which accounts for one fifth of global investment

demand, could fall in the long term as the country moves to free the yuan,

enabling savers to gain direct access to foreign stocks or bonds. Freer capital

flows eventually would involve freedom of movement of cash. Officially,

Chinese individuals have no direct access to overseas assets, such as bonds,

stocks and real estate but can only invest in six government-approved foreign

brokerages. Investors are allowed to hold gold bars but cannot export them.

(Reuters)

Commodities Gold fell to a 7-week low on Thursday as the dollar hit a three-month high,

and looked vulnerable to further losses after Fed left the door open to a US

interest rate rise in December. Spot gold was down 0.2% at US$1,105. US

December futures settled down 0.2% at US$1,104.20. (Reuters)

US crude oil futures fell about half percent on Thursday while Brent

steadied, tracking an oversupplied market and weak gasoline prices before

rebounding on the improved sentiment on Wall Street. US crude futures were

down 30 cents at US$46.02 a barrel. Brent futures were up 10 cents at

US$48.68. (Reuters)


4


Mon Tue Wed Thu Fri

2 3 4 5 6

XD

SVH

XD

CRYSTAL

DIF

ERWPF

MEM

MEU

MUS

POPF

PPF

SIRIP

SPWPF

TGROWTH

XD

CPNCG

CPNRF

XD

DCC

QHPF

9 10 11 12 13

XD

JAS

16 17 18 19 20

23 24 25 26 27

XD

TNH

30

Nov-15

Date Regions

2-Nov-15 CNY

2-Nov-15 EU

2-Nov-15 US

4-Nov-15 EU

4-Nov-15 JPY

5-Nov-15 US

6-Nov-15 US

6-Nov-15 US Unemployment Rate (Oct)

Economic Indicators

Caixin Manufacturing PMI (Sep)

Non-monetary policy's ECB meeting

BoJ Monetary Policy Meeting Minutes

Initial Jobless Claims (Oct)

Nonfarm Payrolls (Oct)

Markit Manufacturing PMI (Oct)

Markit Manufacturing PMI (Oct)

5


CG Rating

Score Range Number of Logo Description

90 – 100

80 – 89

70 – 79

60 – 69

50 – 59

Below 50

No logo given

Excellent

Very Good

Good

Satisfactory

Pass

N/A

Corporate Governance Report disclaimer

The disclosure of the survey result of the Thai Institute of Directors

Association (“IOD”) regarding corporate governance is made pursuant

to the policy of the Office of the Securities and Exchange Commission.

The survey of the IOD is based on the information of a company listed

on the Stock Exchange of Thailand and the Market for Alternative

Investment disclosed to the public and able to be accessed by a

general public investor. The result, therefore, is from the perspective of

a third party. It is not an evaluation of operation and is not based on

inside information.

The survey result is as of the date appearing in the Corporate

Governance Report of Thai Listed Companies. As a result, the survey

result may be changed after that date, Asia wealth Securities Company

Limited does not conform nor certify the accuracy of such survey result.

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2014.

6


Contact

Branch Address Phone Fax

Head Office 540 Floor 7,14,17 , Mercury Tower, Ploenchit Road, Lumphini,

Pathumwan Bangkok 10330

02-680-5000 02-680-5111

Silom 191 Silom Complex Building,21st Floor Room 2,3-1 Silom Rd.,

Silom, Bangrak, Bangkok, 10500 Thailand

02-630-3500 02-630-3530-1

Asok 159 Sermmitr Tower, 17th FL. Room No.1703, Sukhumvit 21

Road, Klong Toey Nua, Wattana, Bangkok 10110

02-261-1314-21 02-261-1328

Pinklao

7/3 Central Plaza Pinklao Office Building Tower B, 16th Flr.,

Room No.1605-1606 Baromrajachonnanee Road, Arunamarin,

Bangkoknoi, Bangkok 10700

02-884-7333 02-884-7357,

02-884-7367

Chaengwattana

99/99 Moo 2 Central Plaza Chaengwattana Office Tower, 22nd

Flr., Room 2204 Chaengwattana Road, Bang Talad, Pakkred,

Nonthaburi 11120

02-119-2300 02-8353006

Chaengwattana 2

9/99 Moo 2 Central Plaza Chaengwattana Office Tower, 22nd Flr.,

Room 2203 Chaengwattana Road, Bang Talad, Pakkred,

Nonthaburi 11120

02-119-2388 02-119-2399

Mega Bangna 39 Moo6 Megabangna, 1st Flr., Room 1632/7 Bangna-Trad

Road, Bangkaew Bangplee, Samutprakarn 10540

02-106-7345 02-105-2070

Rayong 356/18 Sukhumvit Road, Nuen-Phra Sub District, Muang

District, Rayong Province 21000

038-808200 038-807200

Khonkaen 26/9 Srijanmai Road, Tamboonnaimuang, Khon Khaen

40000

043-334-700 043-334-799

Chonburi 55/22 Moo 1, Samed Sub District, Muang District, Chonburi

20000

038-053-858 038-784-090

Chaseongsao 233-233/2 Moo2 1st Flr., Sukprayoon Road, Na Meung Sub-

District, Meung District, Chachoengsao 24000

038-981-587 038-981-591

6 nov 2015 · 2015-11-06 · daily market outlook 6 nov 2015 2 please see disclaimer on last page...

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