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Brexit deal delivers Christmas cheer to investors

Recap: Global stocks edged upward after amid investor optimism about economic growth. Chinese shares posted a weekly gain after the Brexit deal helped lift sentiment while Tokyo ended flat without fresh trading cues on Christmas Day when many markets were closed.

The SET index moved in a wide range of 1,388.23 and 1,486.84 points this week before closing yesterday at 1,486.31, up 0.3% from the previous week, in daily turnover averaging 99.69 billion baht.

Local investors were net buyers of 7.74 billion baht and foreign investors bought 2.89 billion in shares. Institutional investors were net sellers of 8.12 billion baht and brokerages offloaded 2.51 billion baht in shares.

Newsmakers: US lawmakers were rushing to revise a long-awaited stimulus bill, after President Donald Trump complained that it contained a lot of spending that had nothing to do with pandemic relief. He demanded that the one-off payment to individuals be improved from $600, Democrats proposed $2,000 and Republicans rejected it.

After months of fraught negotiations, Britain and the European Union finally agreed on a trade pact on Thursday, just days before their Dec 31 deadline, to soften the economic shock of Brexit.

Many countries are blocking travel from the UK or considering doing so, after the discovery of a new coronavirus variant that appears much more contagious than others. The US will require arrivals from the UK to show a negative test no more than 72 hours old.

Rail and sea links between the UK and France were to remain open over Christmas to clear the backlog of thousands of trucks stranded by border closures due to the discovery of a new strain of coronavirus in the UK.

Hong Kong extended its compulsory quarantine to three weeks for almost all international travellers, saying the measure was needed to prevent new, more infectious, virus variants from spreading.

The United States authorised the Moderna Covid-19 vaccine for emergency use, paving the way for 6 million doses of a second vaccine to begin shipping across the hardest-hit country in the world.

The EU drug regulator authorised the Pfizer-BioNTech coronavirus vaccine on Monday, and said there was no evidence it would not work against the new strain found mainly in Britain.

Singapore received its first batch of Covid-19 vaccines on Monday, ahead of a rollout that health officials have said could be as soon as two or three weeks away.

China has begun an investigation into alleged monopolistic practices at Alibaba Group and summoned its fintech arm Ant Group for talks about financial regulations. Billionaire Jack Ma’s internet empire appears under siege in the wake of critical comments he made earlier about regulators holding back innovation, which led to the scrapping Ant’s highly anticipated IPO.

Amid persistent uncertainties and downside risks, the Bank of Thailand has cut its GDP growth outlook for next year by 0.4 percentage points, mainly because of the anticipated delay in the tourism recovery. Its benchmark interest rate was left unchanged for a fifth straight meeting.

The Commerce Ministry forecasts Thai exports recovering to growth of 4% next year after a contraction of up to 7% this year.

As new cases linked to the Samut Sakhon seafood market rose into the hundreds, the government on Thursday introduced a four-tier system — red, orange, yellow and green — for gauging the Covid threat, but said a nationwide lockdown was not needed yet.

Thailand’s economy can withstand another round of stringent lockdown measures — if the current outbreak necessitates them — because the fiscal 2021 budget is flexible enough to support more assistance, says the Finance Ministry.

The lockdown of Samut Sakhon will cause about 1 billion baht a day in economic damage, according to Amphai Harnkraiwilai, chairwoman of the provincial Chamber of Commerce.

The new coronavirus outbreak is likely to ruin tourism sentiment in the short term, says the Tourism Authority of Thailand (TAT). The New Year travel outlook is uncertain, and numerous countdown parties and other holiday events have been cancelled.

The Federation of Thai Industries (FTI) supports the state plan to register all migrant workers and better manage their records in response to the surge of Covid infections among foreign workers.

SME borrowers representing about 5% of total outstanding debts will need to extend their participation in the debt holiday programme until June 2021, says the Bank of Thailand.

The Board of Investment approved additional measures including a 50% corporate tax deduction for five years for investment projects worth at least 1 billion baht to stimulate investment next year.

The Digital Economy Promotion Agency (Depa) has vowed to increase the GDP of the country’s digital industry by 1% or 6 billion baht next year through various support programmes.

The Customs Department has signed an agreement to allow CAT Telecom to become the National Single Window (NSW) system provider, aiming to support more efficient import and export information links.

Amazon Global Selling, a cross-border e-commerce service arm of the US e-commerce giant Amazon, has teamed up with the Commerce Ministry to support local suppliers reaching out to global customers through its platform.

Thai Oil (TOP) has announced it will sell all shares, worth 346.5 million baht, in Thai Oil Marine (TM) to Phurich Marine after the TOP board agreed to restructure the company’s marine transport business for long-term growth.

Coming up: Thailand and Japan will release November industrial production data on Monday. South Korea will release December consumer confidence on Tuesday.

Thailand will release November current account, private consumption and investment figures and October retail sales on Wednesday. China will release the December manufacturing PMI on Thursday.

Stocks to watch: Capital Nomura Securities recommends stocks of firms that could see more demand for their products and services amid the new Covid wave locally, including KCE, HANA, STGT, STA, NER, SCGP, EPG, ADVANC and INTUCH. It also recommends consumer finance, property and high-dividend stocks supported by low interest rates. Top picks are SAWAD, MTC, SPALI, AP, LH, ADVANC and INTUCH.

The brokerage’s top picks for 2021 are SCC, SCGP, PTT, TOP, GULF, SAWAD, KCE, CPALL and CENTEL, along with VNT, GFPT and SNC among mid- and small-cap stocks.

DBS Vickers Securities recommends stocks with prospects for recovery including PTT, BEM, CPALL, COM7, CPN, GPSC and TQM. Its outstanding high-dividend picks include KKP, TISCO, AP, LH, SNC and DIF, while KBANK, AMATA, PTTGC and TOP are value plays.

Technical View: Phillip Securities sees support at 1,460 points and resistance at 1,500. LH Securities sees support at 1,450 and resistance at 1,520.

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