Krungsri Securities forecast the Stock Exchange of Thailand (SET) Index on Wednesday (November 10) would rise to between 1,635 and 1,640 points.
It said the index gained positive sentiment from rising oil price in line with increasing demand after many countries have reopened, plus the US $1 trillion infrastructure package to boost the economy.
However, uncertainty over rising inflation and stock market volatility during the third-quarter performance announcement would pressure the index, Krungsri Securities said.
It also recommended buying of the following companies’ shares as an investment strategy:
▪︎ PTT, PTTEP, TOP, PTTGC, IVL, SPRC and BCP, which benefit from rising oil price and gross refining margin.
▪︎ AOT, AAV, BA, MINT, KBANK, SCB, CPN, CRC, HMPRO, CPALL, AMATA, WHA, BTS, BEM and VGI, which benefit from the country reopening.
U.S. stocks halted the longest rally since 2017, sending major indexes lower from all-time highs as Treasuries surged.
The S&P 500 fell for the first time in nine sessions, led by a drop in financial shares that came under pressure as the 10-year yield slumped to the lowest level in seven weeks. Tesla Inc. sank as much as 13% after a tweet by investor Michael Burry. PayPal Holdings Inc. fell after its guidance disappointed. And General Electric Co. rose after saying it will split into three companies.
Global equities are hovering near all-time highs as investors weigh strong earnings, easing travel curbs and U.S. infrastructure spending against the risk of persistent inflation that may lead to tighter monetary policy. Data Tuesday showed the producer price index accelerated in October, further fueling concerns about inflationary pressures in the economy.
“There’s no denying that pricing pressure looms large,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “Though there were no surprises with the PPI read, it could be viewed as somewhat of a disappointment in that inflation hasn’t eased up in the slightest.”
Fresh consumer price data on Wednesday could add to the debate over monetary policy, which saw another wildcard Tuesday with news that Fed Governor Lael Brainard was interviewed by President Joe Biden as he contemplates whether to tap Fed Chair Jerome Powell for a second term or not. Meanwhile, shifts in positioning have fueled gains in long-end Treasuries, taking the 30-year yield down to its lowest level since July. The yield on the U.S. 10-year note fell to 1.44%.
“We are at the point of the cycle where policy is shifting to be somewhat less accommodative,” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, told Bloomberg TV. “We do think financial conditions ultimately are going to tighten by the middle of next year and investors don’t seem to care. They’re hooked on the IV of very low real interest rates.”
Bitcoin pared back gains after soaring past $68,000 for the first time. Crude oil rose more than 3% in New York after a bearish report. And gold gained.
What to watch this week:
– China’s Communist Party’s decision-making Central Committee meets through Thursday
– China PPI Wednesday
– U.S. wholesale inventories, CPI, initial jobless claims Wednesday
– U.S. bond marked is closed in observance of Veterans Day Thursday
– China holds its annual Singles’ Day, the world’s biggest shopping festival, when e-commerce giants like Alibaba and JD.com Inc. lure buyers with bargains Thursday
– – –
– The S&P 500 fell 0.3% as of 4 p.m. New York time
– The Nasdaq 100 fell 0.7%
– The Dow Jones industrial average fell 0.3%
– The MSCI World index fell 0.2%
– – –
– The Bloomberg Dollar Spot index was little changed
– The euro was little changed at $1.1596
– The British pound was little changed at $1.3561
– The Japanese yen rose 0.3% to 112.87 per dollar
– – –
– The yield on 10-year Treasuries declined five basis points to 1.44%
– Germany’s 10-year yield declined five basis points to -0.30%
– Britain’s 10-year yield declined three basis points to 0.82%
– – –
– West Texas Intermediate crude rose 3% to $84.40 a barrel
Bitcoin and Ether hit all-time highs in a cryptocurrency rally that some analysts attributed partly to the search for a hedge against inflation.
Bitcoin, the world’s largest digital token, jumped as much as 3.6% to $68,513, while Ether posted a more modest advance to about $4,840. The total value of digital tokens tracked by CoinGecko reached some $3.1 trillion.
Trying to work out why virtual currencies are rallying is often a fraught task, but some theories pointed to the appetite for assets that can deliver returns even as the pandemic recovery stokes inflation. Bitcoin is up more than 130% this year and Ether some 550%, though for critics the volatility inherent in digital tokens damages their claims to being a store of value.
Inflation hedges are “in demand with crypto leading,” Chris Weston, head of research at Pepperstone Financial, wrote in a note, adding that “crypto is where the fast money is at.”
Record-low real yields may also be stoking appetite for riskier investments, potentially pushing some markets to perilous levels. The Federal Reserve in a report warned asset prices are vulnerable if sentiment sours. It also flagged dangers from stablecoins, a type of token supposed to have a steady value.
Bitcoin last scaled a record in October following the launch of the first Bitcoin-linked exchange-traded fund for U.S. investors. The landmark step fed the narrative that virtual coins are winning greater mainstream acceptance, including from institutional investors.
Still, the ride has been volatile. The token plunged below $30,000 in June amid criticism of its energy consumption and China’s cryptocurrency crackdown. It then recovered in part as the crypto sector adjusted to China’s broadsides.
“This breakout in bitcoin might signal the start of a final push-up for the fourth quarter before the crypto market shows more pronounced consolidation into next year,” Fundstrat said in a technical-strategy report Monday. “Strength in Bitcoin, Ethereum and many other altcoins looks likely in the weeks to come.”
Another theory for the Bitcoin rally is the seemingly ubiquitous Elon Musk, the world’s richest man. Musk’s Twitter followers in a poll he set up voted in favor of the billionaire selling 10% of his stake in electric-carmaker Tesla Inc.
That brings up the question of what he might do with the proceeds. Musk has previously said he’d like to see Bitcoin succeed and that he personally has bought Bitcoin, Ether and Dogecoin.
Michael Saylor, the chief executive at MicroStrategy Inc., mentioned the claimed benefits of bitcoin in a reply to Musk’s poll tweet. Converting Tesla’s balance sheet to Bitcoin “would deliver diversification, inflation protection, & more upside for all investors in a tax efficient manner,” he said.
The little more than decade-old market for digital assets has roughly quadrupled from its 2020 year-end value. Some technical indicators suggest Bitcoin’s ascent may be due a pause, according to Katie Stockton, founder of Fairlead Strategies.
Bitcoin aside, more people are being drawn to the crypto economy for so-called decentralized financial services as well as non-fungible tokens, which allow for digital collectibles like online art.
Blockchain networks like Ethereum and Solana continue to upgrade to deliver such functionality. The nascent metaverse — an immersive online environment that creates a virtual reality — also looms as a cryptocurrency playground.
“We will see corrections along the way, no doubt,” said Vijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore. “But we’re at a point in the cycle where there is a lot of hype about the asset class and the extent to which it will play a role across industries beyond finance such as gaming, entertainment, social media and art.”
The Stock Exchange of Thailand (SET) Index closed at 1,631.69 on Tuesday, up 5.56 points or 0.34 per cent. Transactions totalled 71.99 billion baht with an index high of 1,633.76 and a low of 1,623.64.
The index rebounded after dropping by 0.09 points or 0.01 per cent on Monday.
In the morning session, Krungsri Securities forecast the SET Index on Tuesday would rise to between 1,630 and 1,635 points as the US Congress has passed a US$1 trillion infrastructure package in a bid to boost the economy.
It said the index also gained positive sentiment from country reopening trend after Pfizer’s antiviral pill showed 89 per cent effectiveness against Covid-19.
However, fund flow volatility during the third-quarter performance announcement, as well as mass sell-offs of shares in response to stock market technical signals, would pressure the index, Krungsri Securities said.
The 10 stocks with the highest trade value today were KBANK, PIN, PTT, SCB, CPALL, ONEE, BANPU, AOT, DELTA and GUNKUL.
Other Asian indices were up with one exception:
Japan’s Nikkei Index closed at 29,285.46, down 221.59 points or 0.75 per cent.
China’s Shanghai SE Composite closed at 3,507.00, up 8.37 points or 0.24 per cent, while the Shenzhen SE Component closed at 14,571.93, up 63.07 points or 0.43 per cent.
Hong Kong’s Hang Seng Index closed at 24,813.13, up 49.36 points or 0.20 per cent.
South Korea’s KOSPI Index closed at 2,962.46, up 2.26 points or 0.076 per cent.
Taiwan’s TAIEX Index closed at 17,541.36, up 126.06 points or 0.72 per cent.
Thailand is ready to employ the BCG – bio, circular and green –model to help rebuild the economy, Commerce Minister Jurin Laksanawisit said at the 32nd Apec Minister’s Meeting on Monday.
The Asia-Pacific Economic Cooperation (Apec) summit, which kicked off this week, is being hosted virtually by New Zealand. Apec talks will focus on the region’s economic recovery from the Covid-19 fallout, with a special emphasis on supply chain support and decarbonising.
Jurin said Thailand was focusing on four aspects in its bid to rebuild the economy sustainably, namely:
• Getting businesses and the public ready for the digital economy era by cooperating with Apec members on implementing guidelines related to the internet and digital economy.
Thailand will employ 3-pronged economy model for recovery, Jurin tells Apec ministers
Jurin said Thailand has used e-commerce to create trading and investment opportunities, especially for small businesses.
“The value of retail and wholesale trade via e-commerce platforms in 2020 was US$43 billion, up 8.7 per cent year on year, while SMEs were able to boost their trade value up to $47.60 billion or 13 per cent,” he said.
• Thailand is using the BCG Model to boost the potential of local MSMEs (micro, small and medium enterprises). Jurin said Thailand, the host of next year’s Apec Summit, will organise a symposium on the BCG model because trade and efforts to protect the environment must go hand in hand.
• Thailand is ready to support regional economic integration, such as developing an Asia-Pacific free trade area and the Regional Comprehensive Economic Partnership (RCEP). Jurin said Thailand had ratified RCEP on October 28 as “we believe the free-trade agreement will help lift trading barriers and boost the regional economy to grow in the long term”.
• Thailand wants Apec to promote transparency and fairness among countries to ensure everybody has equal access to Covid-19 vaccines and that regulations related to fishery, agriculture and e-commerce are maintained.
Prime Minister Gen Prayut Chan-o-cha said on Monday that he was satisfied with the progress made so far in the rehabilitation of the national carrier Thai Airways International (THAI).
“The economic team informed me this morning [November 8] that the rehabilitation is progressing as planned, with the airline having enough cash flow and unnecessary expenses reduced. Monthly expenditure is also dropping,” Prayut said. “THAI will always remain the national carrier and continue to operate under the rehabilitation plan. The airline will undergo some changes based on necessity and urgency.”
The prime minister also promised that the funds sought by the airline will not be reduced, but said the money will not be disbursed as yet. “Instead, I have suggested that the airline raise funds from other sources first,” he said.
THAI submitted a rehabilitation plan with the Central Bankruptcy Court on March 31 after its cash flow was blocked due to the Covid-19 pandemic and losses began piling up. The rehabilitation plan, which aims to restructure the airline and bring it back to making profits, was approved by the court on June 15.
The airline now has five years to recover under the court-approved plan. It can extend the deadline twice, and no more than one year per time. This means the entire rehabilitation process must be completed within seven years.
The baht opened at 32.89 to the US dollar on Tuesday, strengthening from Monday’s closing rate of 33.05, which was the lowest in a month and a half.
The Thai currency is likely to move between 32.80 and 33 to the greenback during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
Poon said the baht is likely to strengthen due to the weakening of the dollar, gold sell-offs and foreign investors interest in Thai stocks.
The baht may also be highly volatile because it has gone past the key support level of 33 to the dollar, which was the stop-loss level set by foreign investors. They may change their baht holdings, which could make the currency strengthen suddenly.
Poon believes the baht will not rise much, especially when economic recovery is factored in. The baht’s drop to below 33 to the dollar prompted some importers to exchange the dollar. The baht’s key support level should stand at 32.80 to the dollar, Poon said.
The price of gold dropped by THB50 in morning trade on Tuesday.
AGold Traders Association report at 9.24am said the buying price of a gold bar was THB28,250 per baht weight and selling price THB28,350, while the buying and selling price of gold ornaments is THB27,742.80 and THB28,850, respectively.
At close on Monday, the buying price of a gold bar was THB28,300 per baht weight and selling price THB28,400, while gold ornaments were THB27,788.28 and THB28,900, respectively.
The spot gold price on Tuesday morning hovered around US$1,825 (THB59,900) per ounce after Comex gold at close on Monday rose by $11.2 to $1,828 per ounce due to support from the depreciation of the US dollar and the signal from a number of central banks, including the Federal Reserve, that they will not accelerate interest rate hikes.
Krungsri Securities forecast the Stock Exchange of Thailand (SET) Index on Tuesday (November 9) would rise to between 1,630 and 1,635 points as the US Congress has passed a US$1 trillion infrastructure package in a bid to boost the economy.
It said the index also gained positive sentiment from country reopening trend after Pfizer’s antiviral pill showed 89 per cent effectiveness against Covid-19.
However, fund flow volatility during the third-quarter performance announcement, as well as mass sell-offs of shares in response to stock market technical signals, would pressure the index, Krungsri Securities said.
It also recommended buying of the following companies’ shares as an investment strategy: ▪︎ PTT, PTTEP, TOP, PTTGC, IVL, SPRC and BCP, which benefit from rising oil price and gross refining margin. ▪︎ AOT, AAV, BA, MINT, KBANK, SCB, CPN, CRC, HMPRO, CPALL, AMATA, WHA, BTS, BEM and VGI, which benefit from the country reopening.
French economic activity reached a level in August not seen since before the Covid-19 pandemic and has continued rising since, aided by a strong recovery in the service sector, according to a Bank of Frances survey of businesses.
Economic output was about 0.5% above early 2020 levels in October and will rise again in November, putting the euro area’s second-largest economy on track for roughly 0.75% growth in the final quarter of the year, the estimates show.
“This return to pre-crisis levels has come sooner than we expected previously — we’ve gained about one quarter in time,” the central bank’s chief economist Olivier Garnier said. If the fourth quarter forecast holds up, growth for the year would be around 6.75%, he added.
The French economic activity expanded apace in recent months after the removal of Covid-19 restrictions unleashed a boom in consumer spending. While factory output was dampened by supply difficulties, France’s industry makes up a smaller share of the economy than Germany’s and is specialized in areas that have suffered less.
Those constraints may also be easing. The Bank of France survey showed the share of business leaders hampered by supply difficulties stabilized at 56% in October, ending four months of increases. In construction, the measure fell to 58% from 62%.
But there is still uncertainty about bottlenecks with significant variations between sectors, Garnier said. In pharmaceuticals, only 26% of companies said supply was impacting their activity, compared to 86% in the automobile sector.
“It would be premature to say we are over the peak of the supply problems,” Garnier said.
Thailand will employ 3-pronged economy model for recovery, Jurin tells Apec ministers
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