Trump trade signals keep investors on edge

RECAP: Asian stock markets traded within a tight range yesterday as investors anxiously awaited US President Donald Trump's next trade war moves, following a busy week of central bank meetings that further frayed nerves.

The SET index moved in a range of 1,165.46 and 1,200.09 points this week, before closing yesterday at 1,186.61, up 1% from the previous week, with daily turnover averaging 43.94 billion baht.

Institutional investors were net buyers of 2.21 billion baht, followed by retail investors at 1.58 billion and brokerage firms at 175.13 million. Foreign investors were net sellers of 3.97 billion baht.

NEWSMAKERS: US Federal Reserve chairman Jerome Powell said tariff increases would delay progress in bringing down US inflation, but he believes tariff-related price impacts will be relatively short-lived.

• Mr Powell's comments came after the Fed kept interest rates unchanged at 4.25% to 4.5% as expected, and hinted at two more cuts this year. It also lowered its US GDP forecasts for 2025-27 to 1.7% (-0.4%), 1.8% (-0.2%), and 1.8% (-0.1%).
• Gold prices eased on Friday, weighed down by a stronger dollar, although US rate-cut cues and safe-haven demand kept prices well above $3,000 an ounce, after they reached a record $3,057.21 the day before.
• The Bank of Japan kept its policy rate at 0.5% as expected. Markets anticipate rate hikes in July and September, to 1.0% by year-end. Core inflation in February slowed to 3% year-on-year, from 3.2% in January.
• The Bank of England kept its policy rate unchanged at 4.50%, despite stagnant economic growth as inflation stays elevated. It also warned of "a lot of economic uncertainty" caused largely by US tariffs.
• The European Union has postponed the imposition of tariffs on US goods by two weeks from the original April 1 date to allow additional time for negotiations.
• The Indonesian central bank held its policy rate steady at 5.75% to protect the rupiah after concerns about the economic outlook and government spending led to a stock market rout. The Jakarta Composite slid 7.1% on Tuesday, resulting in a trading halt for the first time since the pandemic.
• BYD shares jumped after the top Chinese EV maker unveiled new models supported by ultra-fast charging that it said could provide 400km of range in as little as 5 minutes.
• Xiaomi reported a 49% rise in fourth-quarter revenue, boosted by strong sales of both electric vehicles and smartphones. Adjusted net profit rose 69% year-on-year to 8.3 billion yuan.
• Google parent Alphabet has struck a deal to buy the Israeli cybersecurity startup Wiz for $32 billion, the tech giant's largest acquisition ever.
• The Bank of Thailand (BoT) may need to cut interest rates by up to 100 basis points over the next year to support the anaemic economy, according to forecasters at Nomura. Bank of America predicts cuts of 75 basis points by 2026.
• US retail sales grew by a modest 0.2% in February, short of expectations for 0.6%, as economic uncertainty mounts.
• Chinese retail sales for January and February 2025 grew 4% from the previous year, exceeding market expectations, while industrial production and fixed asset investment grew 5.9% and 4.1% respectively, also higher than forecasts.
• The Organisation for Economic Cooperation and Development (OECD) has revised down its global GDP forecasts for 2025 and 2026 by 0.1 and 0.2 percentage points, to 3.1% and 3.0%, respectively, citing the impact of rising trade tariffs.
• Central bank governor Sethaput Suthiwartnarueput has signalled a steady interest rate at 2% with no plans for frequent reductions. The focus should be on long-term expansion rather than just short-term stimulus, he said.
• The BoT is relaxing loan-to-value (LTV) rules to support the slumping property market. From May 1, 2025 to June 30, 2026, loans of up to 100% of collateral value will be allowed for first homes worth more than 10 million baht, and for second homes worth less than 10 million.
• The National Credit Bureau reports that of 27 million debtors in the system, 25% have good financial health, 38% are at risk of chronic debt, and 17% have non-performing loans. Personal debt has decreased by 0.5% year-on-year due to high loan rejection rates.
• The BoT warned that a plan to buy bad debt and clear credit bureau records, proposed by former prime minister Thaksin Shinawatra, must not create moral hazard.
• Thailand's exports rose 14% year-on-year to $26.7 billion in February, beating forecasts for a 9.7% increase. Imports rose 4%, leading to a trade surplus of $2 billion.
• UBS has upgraded Thailand's equity market to overweight from neutral, saying the peak impact of policy-driven factors behind the sell-off and the specific challenges for companies have passed.
• No decision has been made yet to cut the visa-free period for foreign tourists from 60 days to 30 days, the Ministry of Foreign Affairs said yesterday. It has been widely reported that the government was considering the move to cut down on abuses by foreigners setting up illegal businesses.
• Bangkok Airways plans to order as many as 30 new aircraft as it renews its ageing fleet and plans for a tourism boost driven by the popularity of the TV series The White Lotus.
• The Tourism Authority of Thailand expects 476,000 foreign visitors during Songkran, up 3% from last year, generating 7.3 billion baht in revenue, up 6.5%. It anticipates 4,418,500 domestic trips, up 7%, generating 19.2 billion baht, up 9%.
• New business registrations fell 5% year-on-year during the first two months as operators took a cautious approach amid uncertainties, said the Department of Business Development.
• PTT Plc announced a share buyback programme of 470 million shares worth 16 billion baht from March 24 to Sept 23.
• Central Pattana Plc (CPN) is allocating 120 billion baht for a five-year investment strategy that includes new malls in Bangkok, Nonthaburi and Khon Kaen.

COMING UP: On Monday, the US reports manufacturing and services purchasing managers' index (PMI) updates. On Tuesday, the US reports consumer confidence and new home sales. The UK reports inflation on Wednesday, and the US releases quarterly GDP and initial jobless claims on Thursday. On Friday, the UK reports quarterly GDP and the US announces the personal consumption expenditure (PCE) index.

• Domestically, Axa Thailand and Bangkok Insurance will discuss the insurance outlook at separate events. On Thursday, Mr. D.I.Y. will discuss business strategies. On Friday, Krungthai Asset Management and the Association of Investment Management Companies plan a press conference.

STOCKS TO WATCH: InnovestX Securities said end-of-quarter window dressing, and foreign brokers' increasing weight on Thai equities would help the SET next week. Negative factors are the Middle East conflict and concerns about a US slowdown. The brokerage recommends MTC at a fundamental target price of 53 baht, TRUE at 16.50 baht and CBG at 99 baht.

• Yuanta Securities (Thailand) said the central bank's relaxation of LTV criteria should give a significant boost to the real estate sector. Its property picks are SPALI (18.50 baht), AP (9.80 baht) and SIRI (2.02 baht). The three firms have a variety of products ready for sale and can maintain their market share, with good profit growth potential.

TECHNICAL VIEW: InnovestX Securities sees support at 1,155 points and resistance 1,215. Yuanta Securities (Thailand) sees support at 1,170 points, and resistance at 1,200.