Thai stock rise predicted as US-China trade talks resume 

On Tuesday morning, the Stock Exchange of Thailand (SET) index had dropped 3.87 points after Monday trading, to close at 1,737.04, with trade of Bt34.13 billion.
Meanwhile the Finance Ministry is set to discuss measures that would inject Bt100 million to stimulate consumer spending. The move comes amid economic reports that indicate Thai growth will slow in the second half of this year, perhaps impacting stocks.
Globlex suggests that investment strategies should target stocks that benefit from the baht’s appreciation, and company shares that benefit from the US ban on Huawei or are related to the Eastern Economic Corridor.
Externally, Saturday’s resumption of trade talks between the US and Chinese leaders on the G20 meeting sidelines was a positive outcome, said Wilasinee Boonmaungsong, research director at Globlex Securities.
The US announced that it will hold off imposing a new round of tariffs on Chinese goods worth $300 billion and allow US companies to sell components to Huawei again, she said.
Meanwhile Thailand’s continued monetary policy easing is supported by inflation numbers. The Consumer Price Index (CPI) for the first six months of this year stood at 0.92 per cent. As a result, the Commerce Ministry has reduced its inflation target for 2019 from 1.2 per cent (in the range 0.7-1.7 per cent) to 1 per cent (0.7-1.3 per cent).
Negative factors that continue to impact investment include the slowdown in China’s economy. The Thai service sector’s Purchasing Managers' Index (PMI) stood at 54.2 points in June, falling from 54.3 points in May. The manufacturing sector’s PMI remained stable in June at 49.4 points but a level below 50 shows contraction in the sector in the past two months.
The baht meanwhile has reached a six-year high, hitting growth rates of exports which should see contraction in value at the end of the year.