SET senior executive vice president Soraphol Tulayasathien said on Monday that the SET Index in 2018 had been weighed down by external factors, while Thailand’s economic fundamentals remained robust and economic growth had outpaced the level achieved in the previous year.

Foreign investors’ selling spree in Thai shares was in tandem with most Asian stock markets, he said.

The Thai bourse’s average daily trading value in 2018 rose from the preceding year, with a year-on-year increase in the first three quarters before dropping in the fourth quarter, in line with most Asean markets as investors became more cautious on global capital-market investment amid global trade disputes, Soraphol explained.

Support for a shift to a circular economy has been growing since the World Economic Forum (WEF) undertook a multi-year collaboration with the Ellen MacArthur Foundation under the Project Mainstream to accelerate a transition.

Project Mainstream is a CEO-led initiative that helps to scale business innovations related to the circular economy.

The idea behind the circular economy is to reuse and recycle resources multiple times to keep them in use for as long as possible and minimise waste.

Building on the work of the WEF and the MacArthur Foundation, the Platform for Accelerating the Circular Economy – PACE was launched in 2017 as a public-private collaboration.

It is co-chaired by the CEO of Philips and the heads of the Global Environment Facility and UN Environment, along with the Ellen MacArthur Foundation, the International Resource Panel, Circle Economy and Accenture Strategy as knowledge partners.

The World Economic Forum hosts and facilitates the Platform.

The Global Leadership Group currently includes over 40 CEOs, ministers and heads of international organisations committed to leading a portfolio of projects and activities. Project focus areas include plastics, electronics, food and bio-economy, the business model, and market transformation across China, Asean, Europe and Africa.

Following the trend across Asia, businesses are increasingly discarding the decades-old “take, make, waste” model in favour of the circular economy in which waste is minimised and products are kept in the market in one virtuous loop.

The approach has the potential to spur a new industrial revolution, EcoBusiness Magazine reported recently.

For example, in Taiwan, used coffee grounds collected from Starbucks cafes are turned into T-shirts, socks and soaps by Taiwanese firm Singtex. Lighting giant Philips gives office landlords in Singapore free lights in return for a share of the energy saved. In the Philippines, discarded fishing nets are sold by local communities to carpetmaker Interface to make fresh carpet tiles.

All over the world, including in Asia, home-sharing platforms Airbnb and PandaBed, along with car-sharing services Lyft and Tripda, and goods-sharing apps SnapGoods and Rent Tycoon are fuelling collaborative consumption and changing the way people use goods.

In Thailand, Magnolia Quality Development Corporation Ltd (MQDC) has collaboration with PTT Global Chemical Plc (GC) to develop upcycled building materials from plastic waste. The materials were used in the construction of MQDC’s residential projects starting last year.

The first project features construction of a 5-kilometre network of footpaths that will take at least 160 tonnes of plastic waste. The plastic is being provided by GC, which collects it from the sea. Later, the company’s Research & Innovation for Sustainability Centre will carry out research and development into the use of other such materials in infrastructure at its projects.

The World Economic Forum estimates that 80 per cent of the US$3.2 trillion (Bt103 trillion) value of the global consumer goods sector is lost irrecoverably each year due to the current inefficient linear “make, take, waste” model.

Investors are bearish on the outlook for the world economy as reflected in the falling global bond yield from the mass exit from equities to safe-haven assets.

Last week, the market-implied US policy rates suggested that investors were expecting the Federal Reserve System (Fed) to hold their rates this year and possibly a cut in early 2020.

At its December 2018 meeting, the US Federal Open Market Committee’s dot plot showed a median of 2 rate hikes this year, followed by another one in 2020. The huge gap between the market and central bank’s expectations needs to be narrowed.

During this period, the market will certainly be volatile. Nonetheless, given the over-bearishness, we expect a sharp rebound.

But a more sustainable recovery hinges on two major factors: if the Fed turns more dovish and if the ChinaUS trade talks are successful.

Selective plays on key stocks remain our key recommendation. Real estate investment trusts should benefit from peaking interest rates. – Thanawat Patchimkul, Head of Research, DBS Vickers Securities (Thailand)

Poll a key factor

The Thai stock market has moved with high volatility for the past two weeks, sinking to a low of 1,546 points amid concerns over the possibility of a global recession. However, the Thai bourse rose on the last trading day of 2018, driven by the buying spree from LTFsRMFs.

Last week, the Thai Stock Exchange was off to a bumpy start this year, beset by negative news such as postponement of the Thai national election, the US government shutdown and weakening global purchase managers’ index.

The SET Index is not expected to rebound in January despite likely progress in US-China trade talks. An uptrend in the SET Index may occur when a clearer picture emerges on the election. We estimate the support line at 1,540 points and the resistance line at 1,585 points.

This week’s investment strategy: We see limited downside risks as seen in previous sharp drops. The SET Index is technically targeted at 1,600 points in April if a new election date has been announced. This week, we pick stocks with growth potential or dividend plays to mitigate impact from the slowdown.

Our choices are KKP (good earnings growth prospect and high dividend) and PTG (good earnings growth prospect). BJC and WHA stocks in our portfolio have been sold to cut loss. We prefer to hold BTS (launch of extension and expected dividend payment this month. Its targeted price is revised up to Bt9.90), and CK for brighter business prospects (rise in liquidity this year from auction worth more than Bt300 billion).

Stock picks

l KKP: Technical fair price at Bt69.75

l PTG: Technical fair price at Bt10.00

– Tisco Securities

Sideways upside

The SET Index will swing up sideways this week with the support line at 1,550 points and resistance line at 1,6001,620 points. The stock market has been supported by net buy of local institutional investors and rising crude prices. Strategically, we prefer to hold big caps with high dividend (PTT, SCC, ADVANC, BBL, KTB) which have outperformed the market.

Factors for monitoring this week:

1 US-China trade talks in Beijing, January 78. It is the first face-to-face talks after the 90-day halt to new tariffs since December 1. If progress is made, global risk sentiment will improve.

2 The ECs comments on the election schedule and the possibility of an announcement this of a new election date. If it’s certain that the poll will be held in March, it will boost market sentiment.

3 Progress in the US government shutdown. We still view it as pressuring the US dollar and indirectly positive for the baht.

4 Return to discussions on Brexit. The Brexit deal will be voted on by members of parliament in the week beginning January 14.

Despite an array of challenges from the global economy and internal weakness, 2018 was a year with many resounding successes for the Vietnamese economy, wrote Phuc.

GDP growth reached US$238 billion, translating to year-on-year growth of 7 per cent, the highest since 2008 – putting the country amongst those with the strongest growth in the world.

He said impressive growth was achieved while macroeconomic indices remained stable and on an upward trend, with inflation and the consumer price index (CPI) kept under control.

The “strongest driver of growth” came from manufacturing industries with a growth figure of 13 per cent, he wrote, pointing to the country’s reduced reliance on extractive industries and credit.

Phuc said several records had been achieved for the Vietnamese economy, with export value – especially agricultural products – reaching an all-time high of US$245 billion and Us$40 billion, respectively.

Vietnam has become a leader in several areas, from agriculture products like rice, shrimp and fish to high-tech industries like smartphones, electronics and automobiles.

The ratio of non-state investment reached 43.3 per cent of the total investment in the country, which includes US$19 billion from foreign direct investment, showed that the Party Central Committee’s resolution on the development of the private economic sector has proved a success, the prime minister said. He added that experts and observers consider Vietnam amongst the most attractive destinations for investment in the Asia-Pacific region.

Vietnam drew 15.5 million foreign tourists in 2018, up 19.9 per cent compared to last year, forming a solid basis to achieving the target of 20 million arrivals during 2020, he said.

Phuc predicted that the country would fulfil all goals set out in the five-year plan by 2020.

The bank said in a press release on Friday that customers who have had their house destroyed by the storm and want to rebuild will get a loan at zero interest rate for the first four months.

GHB also offers a special 3 per cent a year interest rate for the first three year for renovation of homes for new and existing customers.

And for customers who had their homes destroyed and cannot work, the bank will suspend loan payments for the first four months and offer zero per cent interest rate for the first year.

As well, the bank will restructure the debt of customers who lose their earnings due to the storm and offer 1 per cent interest rate for the first year.

Also, customers disabled by the storm will get a loan interest rate of 0.01 per cent.