Market Roundup 17 July 2024

The SET Index in Thailand finished at 1,319.79, a slight decrease of 0.12%, influenced by the sell-off of EA shares, even though there were initial gains from the merger between GULF and INTUCH.

Thai Stock Market Trends

Thailand’s SET Index ended at 1,319.79 points, a decrease of 1.52 points or 0.12%, with a trading value of 46.50 billion baht. The morning session witnessed an uptick following the merger of GULF and INTUCH, which also elevated ADVANC and THCOM, while DELTA saw speculative purchases. Nonetheless, the market trended downward due to EA’s sell-off, raising concerns among banks about the reserve budget for the second half of 2024. Analysts anticipate sideways trading for the following day.

Economic and Inflation Updates

In the United States, retail sales growth was reported at 0.2%, which was below the expected 0.5%, indicating a cautious approach from consumers despite online sales surging by 1.9%.
The UK’s Consumer Price Index (CPI) showed a decrease from 8.7% in May to 7.9% in June, hinting at a moderation of inflationary pressures.
Investors are anticipating the Bank of England’s next move, with predictions leaning towards a modest rate hike of 0.25% as opposed to the previously expected 0.5%.
China’s commitment to bolstering its post-pandemic recovery has positively impacted mining shares, with companies like Anglo American Mining reporting significant gains.
Thailand’s SET Index closed slightly lower, with a decrease of 1.52 points, amid market reactions to corporate amalgamations and speculative buying.
Thailand’s industrial sentiment index fell to 87.2 in June, its lowest in two years.

China’s recovery and real estate sector challenges

China’s real estate sector is undergoing significant challenges, with major developers like China Vanke Co. facing substantial losses due to market turmoil and debt management issues.
The government is responding by promoting technology-driven growth as a cushion against economic challenges, including the property slump, which is part of President Xi Jinping’s strategy for high-quality development.
Policy adjustments are being made to stabilize the market, such as easing restrictions for first-time homebuyers, reducing down payment thresholds, and lowering minimum mortgage rates to restore confidence in the housing sector.
The IMF has noted that China is managing the slowdown by accelerating the cleanup of distressed developers, boosting rental housing, expanding affordable housing, and upgrading under-developed urban neighborhoods.
Despite these efforts, there are ongoing risks due to the slow response in addressing key vulnerabilities, such as the avoidance of bankruptcy by non-viable developers and delayed recognition of bad loans by lenders.