Daily Market Outlook 20 OCT 2014 Up and away Expect the SET to trade up today, bolstered by good news on the local, regional, and global front. Locally news regarding progress on the Dawei project, as well as other government schemes, are likely to shore up investor confidence and boost growth expectations. Globally, the signals of dovishness from various key central banks on Friday have helped investor’s moods and set to continue to do so today. Finally, the big good news from Japan over the weekend that world’s largest pension fund GPIF will boost its equity weight is expected to help push Asian stocks up further today. Factors to watch Local issues:  The Thai construction industry are expected to play a big role in Myanma’s ambitious infrastructure expansion. Myanmar approved 340 high-rise projects nationwide in 1Q14 on top of 705 low-rise projects according to Pisanu Suvanajata, Thailand's ambassador to Myanmar. He anticipates high demand for steel, cement and construction materials in response to the property development boom as well as the development of three special economic zones - Thilawa, Dawei and Kyaukphyu - and other public construction projects. The Myanmar government recently approved US$7.8bn (Bt253bn) to construct roads and bridges. (The Nation)  Investment boom into Myanmar. Having achieved considerable political and economic reforms over recent years, Myanmar has increasingly attracted FDI, much of it from Thailand. Thailand’s total investment in Myanmar is currently close to US$10bn, making it the second-largest source of FDI, after China whose investment is over US$14bn. IMF expects FDI in Myanmar to grow by US$5bn/year over next five years. (The Nation) Comment: While Asian investors have already started flocking in, as reforms are shown to be more permanent and concrete, more Western money would flow in too, and with average monthly wage of US$70 vs US$188 Thai minimum monthly wage, Myanmar could be an alluring alternative base for manufacturing companies.  Banks posted 8% YoY earnings growth in 3Q14: The banking sector was able to maintain profitability in 3Q14, despite sluggish lending growth, thanks to higher net interest margins (NIM) and the low cost of funds. Eight Thai banks last week reported 3Q14 profits totalling Bt43.51bn up +8% from Bt40.32bn posted in 3Q13. (The Nation)  Digital economy plan to move ahead. Deputy PM MR Pridiyahorn said he expects draft of the Digital Economy Act to be proposed to the National Legislative Assembly by year’s end. There would be six policies under the Act, establishing national broadband, increasing legal means to fight hackers, developing software and hardware, and generally supporting the private ICT sector. (The Nation)  Nielsen Thailand reported that ad spending in the first nine months of the year fell by 9.3% to Bt76bn. The Thai advertising industry is still weak. It is expected that the ad industry will not recover until next year when the government carries out its economic measures and invests in infrastructure megaprojects. (Bangkok Post)  BA (Bangkok Airways) IPO price is determined at Bt25/share, adjusted down from Bt27/share amid unfavorable market condition and high competition in airline market. (Post Today) 1 Major Indices SET SET50 SET P/E (x) SET P/BV (x) SET Div. Yield (%) Dow Jones S&P 500 NASDAQ UK Germany France Japan South Korea Hong Kong China Taiwan Singapore Malaysia Indonesia Philippines Trading Summary Institution Proprietary Foreign Individuals Total Trading Value Most Active Value TRUE CPF BBL PTTGC PTTEP Commodity Futures Close 1,528.71 1,014.58 %Chg +0.2 +0.2 16,380.41 1,886.76 4,258.44 6,310.29 8,850.27 4,033.18 14,532.51 1,900.66 23,023.21 2,341.18 8,512.88 3,167.73 1,788.31 5,028.95 7,003.22 Chg +2.6 +2.4 17.8 2.2 2.9 +263.2 +24.0 +41.1 +114.4 +267.4 +114.6 -205.9 -18.2 +122.3 -15.3 -120.8 +13.5 +20.5 +77.3 -25.4 Buy 3,353 4,597 10,255 25,355 Sell 3,317 4,661 12,916 22,665 Net 36 -64 -2,661 2,689 Value 3,071 1,588 1,494 1,490 1,276 Close 82.75 86.16 1,241.20 43,559 Close 11.10 31.50 192.00 56.75 145.50 Chg +0.1 +0.3 -3.6 Btm %Chg -0.9 -3.8 0.0 -2.6 +0.3 %Chg +0.1 +0.4 -0.3 Chg +0.0 -0.0 +0.6 +0.0 %Chg +0.0 -0.4 +0.5 +0.0 US Crude Brent Crude Gold FX Rates Close 32.40 USD/THB 1.28 EUR/USD 106.87 USD/JPY 6.12 USD/CNY Source: Bisnews, Bloomberg Thailand Research Department: Mr. Warut Siwasariyanon (No.017923) Mr. Narudon Rusme (No.29737) Mr. Napat Siworapongpan (No.49234) +1.6 +1.3 +1.0 +1.8 +3.1 +2.9 -1.4 -0.9 +0.5 -0.6 -1.4 +0.4 +1.2 +1.6 -0.4 Tel: 02 680 5041 Tel: 02 680 5056 Tel: 02 680 5094 Daily Market Outlook 20 OCT 2014  EASTW mapped out an aggressive investment plan at home and abroad that includes projects to supply major cities in Myanmar. The company plans to spend Bt5bn from 2015-2020. Bt2bn will be used to provide tap water to big cities in Cambodia, Laos, Myanmar, and Vietnam. (Bangkok Post) Global issues:  Main theme Friday was one of relief amidst an almost coordinated signal from major central banks that accommodative policies would continue for quite some time. This and positive US data helped to support global equities and good news from Japan over the weekend will ensure the positive trend continues with equities today.  A flock of doves. On Friday ECB’s Coeure commented that ECB would start asset purchase “within days” while BOE chief economist and MPC voter Andrew Haldane said UK rates may have to stay low for longer than previously thought, due to a gloomy economic outlook. Furthermore, the Fed’s Rosengren said the Fed would not rule out more QE if US economic weakens. Additionally, there was news that PBOC will inject Rmb200bn of 3-month loans to five or six Chinese banks. All these lead to a rally in equities across all regions, with improved sentiment also reflected in the falling VIX index, which dropped 12.7% to 22. (BBC, Bloomberg, Reuters, WSJ) USA  Following Europe’s strong lead. Wall Street followed Europe’s strong lead and the Dow ended up 1.63% higher, also bolstered by strong US housing data and the University of Michigan sentiment data – both of which outperformed expectations – . The sentiment data came in at 86.4, highest in over seven years. NAQDAQ and S&P went up 0.97% and 1.29% respectively. Comment: Despite Friday’s respite from the recent downward trend, for the week the S&P still fell for the fourth straight week, the first time it has done so since 2011, underlining that Wall Street is in correction mode. (Reuters) Europe  European equities soared. The FTSE fained 1.85%, the DAX 3.1%, CAC gained 2.9%, while Milan closed 3.4% higher and the IBEX ended the day 3.0% higher. (Reuters) Asia  Good news from Japan. The big news over the weekend was that the Japan government pension fund (GPIF), the world’s largest government fund with US$1.2tn assets under management, is being urged to cut its holding of low yielding Japanese government bonds (JGB) and switch to equities to boost returns. The proposed figure is for equities holdings to increase from 12% to around 25%, with fund also likely to increase holdings of foreign equities. (BBC, Reuters). Comment: Good news for equities in general and Asian markets have started this week trading up. 2 Daily Market Outlook 20 OCT 2014 Commodities  Oil went up slight Friday, NYMEX increasing 5 cents to US$82.75/barrel but still declining for the third straight week. Brent closed up 34 cents to US$86.16/barrel. This was from the improved global outlook and relief on Friday but the gains were mitigated by expectations of permanently higher supply and the appreciating trend of the greenback. Gold adjusted down by US$1.87 to close at US$1,238.70/ounce, due to dollar expectations and diminishing risk aversion. (Reuters) Date Regions CNY 21-Oct-14 JPY 22-Oct-14 23-Oct-14 US JPY CNY EU US Economic Indicators GDP (Q3) Industrial Production Retail Sales Balance Trade Export/Import CPI PMI PMI PMI Consumer confidence Jobless Claims PMI Date 20-Oct-14 21-Oct-14 24-Oct-14 XD AP AP MBK MNIT2 MNRF M-PAT M-STOR HMPRO HMPRO VIH VIH 0.02 10:1 0.30 0.18 0.185 0.222 0.17 0.013889 8:1 0.00740741 15:1 Baht Baht Baht Baht Baht Baht Baht Baht Stock Baht Stock Cash Cash Cash Cash Cash Cash Cash Cash Cash 3 Daily Market Outlook 20 OCT 2014 รายงานการประเมินการกากับดูแลกิจการ (CGR) โดยสมาคมส่งเสริมสถาบันกรรมการบริษทั ไทย 2556 Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2013. ADVANC AOT ASIMAR BAFS BANPU BAY BBL BCP BECL BKI BROOK BTS CIMBT CK CPF CPN CSL DRT DTAC EASTW EGCO ERW GRAMMY HANA HEMRAJ ICC INTUCH IRPC IVL KBANK KKP KTB LPN MCOT MINT NKI NOBLE PAP PG PHOL PR PRANDA PS PSL PTT PTTEP PTTGC QH RATCH ROBINS RS S&J SAMART SAMTEL SAT SC SCB SCC SCSMG SE-ED SIM SIS SITHAI SNC SPALI SPI SSI SSSC SVI SYMC TCAP THAI THCOM THRE TIP TISCO TKT TMB TNITY TOP TRC TRUE TTW TVO UV VGI WACOAL 2S ACAP AF AHC AIT AKP AMANAH AMARIN AMATA AP APCO APCS ASIA ASK ASP AYUD BEC BFIT BH BIGC BJC BLA BMCL BWG CCET CENTEL CFRESH CGS CHOW CM CNT CPALL CSC DCC DELTA DTC ECL EE EIC ESSO FE FORTH GBX GC GFPT GL GLOW GOLD GSTEL GUNKUL HMPRO HTC IFEC INET ITD JAS JUBILE KBS KCE KGI KKC KSL KWC L&E LANNA LH LHBANK LHK LIVE LOXLEY LRH LST MACO MAJOR MAKRO MBK MBKET MFC MFEC MODERN MTI NBC NCH NINE NMG NSI NWR OCC OFM OGC OISHI PB PDI PE PF PJW PM PPM PPP PREB PRG PT PYLON QTC RASA SABINA SAMCO SCCC SCG SEAFCO SFP SIAM SINGER SIRI SKR SMT SNP SPCG SPPT SSF STANLY STEC SUC SUSCO SYNTEC TASCO TCP TF TFD TFI THANA THANI THIP TICON TIPCO TK TLUXE TMILL TMT TNL TOG TPC TPCORP TPIPL TRT TRU TSC TSTE TSTH TTA TTCL TUF TWFP TYM UAC UMI UMS UP UPOIC UT VIBHA VIH VNG VNT YUASA ZMICO A AAV AEC AEONTS AFC AGE AH AI AJ AKR ALUCON ANAN ARIP ASIA BAT-3K BCH BEAUTY BGT BLAND BOL BROCK BSBM CHARAN CHUO CI CIG CITY CMR CNS CPL CRANE CSP CSR CTW DEMCO DNA DRACO EA EARTH EASON EMC EPCO F&D FNS FOCUS FPI FSS GENCO GFM GJS GLOBAL HFT HTECH HYDRO IFS IHL ILING INOX IRC IRCP IT JMART JMT JTS JUTHA KASET KC KCAR KDH KTC KWH LALIN LEE MATCH MATI MBAX MDX PRINC MJD MK MOONG MPIC MSC NC NIPPON NNCL NTV OSK PAE PATO PICO PL POST PRECHA PRIN Q-CON QLT RCI RCL ROJNA RPC SCBLIF SCP SENA SF SGP SIMAT SLC SMIT SMK SOLAR SPC SPG SRICHA SSC STA SUPER SVOA SWC SYNEX TBSP TCCC TEAM TGCI TIC TIES TIW TKS TMC TMD TMI TNDT TNPC TOPP TPAC TPP TR TTI TVD TVI TWZ UBIS UEC UOBKH UPF UWC VARO VTE WAVE WG WIN WORK Corporate Governance Report disclaimer Score 90 - 100 80 - 89 70 - 79 60 - 69 50 - 59 Below 50 Range Number of Logo No logo given Description Excellent Very Good Good Satisfactory Pass N/A 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. 4 Daily Market Outlook 20 OCT 2014 Branch Head Office Silom Asok Address 540 Floor 7,14,17 , Mercury Tower, Ploenchit Road, Phone Fax 02-680-5000 02-680-5111 02-630-3500 02-630-3530-1 159 Sermmitr Tower, 17th FL. 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