Gold price surges amid rise in demand as safe-haven asset
The price of gold in Thailand rose by THB150 on Tuesday morning.
The Gold Traders Association report at 9.30am showed buying price of a gold bar at THB28,150 per baht weight and selling price at THB28,250, while gold ornaments were priced at THB27,636.68 and THB28,750, respectively.
At close on Monday, buying price of a gold bar was THB28,000 per baht weight and selling price THB28,100, while gold ornaments were priced at THB27,500.24 and THB28,600, respectively.
Spot gold on Tuesday morning rose to US$1,786 (THB59,743) per ounce after Comex gold price at close on Monday continuously rose by $11.60 to $1,789.8 per ounce, due to support for buying gold as a safe-haven asset after the US manufacturing index slowed to lower than expectation. In addition, the gold price was supported by the positive factor of a drop in the US government bond yield.
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Hong Kong gold price, meanwhile, again rose sharply by HK$120 to $16,590 (THB71,280) per tael, the Chinese Gold and Silver Exchange Society reported.
The Stock Exchange of Thailand (SET) Index rose by 4.67 points, or 0.30 per cent, to 1,535.91 on Tuesday morning.
The SET Index closed at 1,531.24 on Monday, up 2.92 points or 0.19 per cent. Transactions totalled THB77.16 billion with an index high of 1,532.94 and a low of 1,512.28.
Krungsri Securities forecast the index on Tuesday would fluctuate between 1,520 and 1,540 points amid signs of a technical rebound and mass buy-ups of shares that gained positive sentiment.
It predicted the index, however, would be under pressure due to rising domestic and overseas Covid-19 cases and ongoing anti-government protests.
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It recommended selective buying as an investment strategy:
▪︎ HANA, KCE, TU, CPF, GFPT, ASIAN, EPG and NER, which benefit from the weakening baht.
▪︎ PSL and TTA, which would benefit from a rise in the freight rate.
▪︎ ADVANC, BGRIM, GPSC and CKP, which are able to escape the impact from market volatility.
Baht stable but seen weakening, as markets await US Fed move on QE
The baht opened at 33.43 to the US dollar on Tuesday, unchanged from Monday’s closing rate.
The Thai currency was likely to move between 33.40 and 33.55 during the day, Krungthai Bank market strategist Poon Panichpibool said.
He said the baht was likely to fluctuate and weaken due to the Covid-19 situation and the rising momentum of the US dollar.
He expected the dollar to receive support from the US Federal Reserve move to reduce quantitative easing (QE) this year and the demand for safe-haven assets due to the Covid-19 situation worldwide.
However, the statement from the Fed’s chair this week might cause the dollar to fluctuate and weaken if the Fed chair does not announce a reduction in quantitive easing this year, and the US economy recovers strongly as Fed officials revealed earlier.
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Poon said the resistance of the baht would be at 33.50 to the dollar, as exporters continued to sell the dollar. The baht could weaken past the resistance level if the pandemic situation in the country worsened, along with the strengthening of the dollar.
S&P 500 extends gain, doubles from pandemic bottom
The stock market wiped out earlier losses, with the S&P 500 extending its surge from a March 2020 low to 100%. Bonds climbed.
The benchmark gauge of American shares closed at another record — its 49th since the end of last year — led by health-care and utility companies. Apple Inc. also climbed to an all-time high. Equities fell in the first few hours of trading on Monday after softer economic data from the world’s two biggest economies. Tesla Inc. sank as the U.S. opened an investigation on the electric-vehicle firm’s Autopilot system.
Traders awaited signals from the Federal Reserve, with a town hall by Chair Jerome Powell Tuesday potentially acting as a precursor to the Jackson Hole symposium in late August. The market has viewed the event as a venue for the Fed to lay out the timing and contours of its expected move to taper the bond-buying program.
“The big question that’s hovering over the market is about the Fed — when the Fed is going to move, when the Fed is going to taper,” said Fiona Cincotta, senior financial markets analyst at City Index. “What we do know is that the recovery is going to be bumpy — it’s not going to be in a straight line.”
Halfway through August, the S&P 500 is on track for one of the calmest months ever. Under the surface, however, there’s still a degree of anxiety about what’s coming. A measure of implied volatility in VIX options has advanced for five out of seven weeks — even as the Cboe Volatility Index kept falling.
Citigroup Inc.’s Tobias Levkovich warned that investors should be bracing for more volatility as Fed tapering, the possibility of higher taxes, margin pressures and persistent inflation become forces “that the bond market has to respond to.”
“We’re a bit more cautious,” Citigroup’s chief U.S. equity strategist said in an interview on Bloomberg TV, adding that these four potential issues “could cascade onto each other around September” as valuation is extended.
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Some of the main moves in markets:
Stocks
– The S&P 500 rose 0.3% as of 4 p.m. EDT
– The Nasdaq 100 was little changed
– The Dow Jones industrial average rose 0.3%
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– The MSCI World index fell 0.2%
Currencies
– The Bloomberg Dollar Spot Index rose 0.1%
– The euro fell 0.2% to $1.1778
– The British pound fell 0.2% to $1.3839
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– The Japanese yen rose 0.3% to 109.24 per dollar
Bonds
– The yield on 10-year Treasuries declined two basis points to 1.26%
– Germany’s 10-year yield was little changed at -0.47%
– Britain’s 10-year yield was little changed at 0.57%
Commodities
– West Texas Intermediate crude fell 1.5% to $67.44 a barrel
– Gold futures rose 0.6% to $1,789.20 an ounce
Published : August 17, 2021
By : Syndication Washington Post, Bloomberg · Rita Nazareth, Vildana Hajric
NESDC sees limited, gradual growth in Thai economy this year
The National Economic and Social Development Council (NESDC) released official figures for the Thai economy and its projection for the rest of the year.
The NESDC report showed that the economy is expected to grow between 0.7 and 1.2 per cent, showing a recovery from the 6.1 per cent contraction last year. However, the new projection is a downward revision from the 1.5 to 2.5 per cent growth predicted earlier this year.
Economic growth for the rest of this year will likely be subjected to the following limitations and risks, namely:
• Uncertainty over a new wave of Covid-19 infections
• Fragile financial condition of both households and businesses amid high unemployment rates and worries over the resurgence of Covid-19
• Risks faced by export and manufacturing sectors affected by outbreaks in factories, coupled with constraints in the global value chain and international logistics, and
• Volatility in the global economic and financial situation.
Nevertheless, the Thai economy in 2021 is likely to recover gradually, thanks to the following key supporting factors:
• Recovery of the world economy and global trade
• Support from government spending and stimulus measures
• Improvement of income in the agricultural sector
• Low growth base for the economy in the latter half of 2020.
NESDC expects the value of exports, private consumption, private investment and public investment to rise by 16.3 per cent, 1.1 per cent, 4.7 per cent, and 8.7 per cent, respectively. Meanwhile, headline inflation is expected to be in the range of 1 and 1.5 per cent, while the current account is leaning towards registering a deficit of 2 per cent of the gross domestic product.
Energy consumption up by 2.8% in first half, but only 0.1% rise projected for full year
Thailand’s primary energy consumption rose 2.8 per cent in the first six months of 2021, the Energy Policy and Planning Office (EPPO) reported on Monday.
Consumption of natural gas, lignite, hydropower and imported electricity increased as the global economy began to recover. However, oil us fell in the first half of the year due to lockdowns, travel restrictions and work-from-home measures which hit the transport sector.
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The EPPO expects energy consumption to rise only 0.1 per cent in 2021, based on the National Economic and Social Development Council (NESDC)’s projection of 0.7-1.2 per cent economic growth this year.
The NESDC expects the Dubai crude oil price to range from US$62-72 per barrel in 2021.
The EPPO forecasts that use of natural gas and coal/lignite will increase by 3.5 and 1.8 per cent respectively this year.
Hydropower and imported electricity is expected to increase by 11.7 per cent while oil consumption is expected to drop 5.5 per cent due to the extension of lockdown measures. Household LPG consumption is expected to increase by 0.9 per cent. Energy use is expected to rise by 5.3 per cent in the industrial sector and 11.5 per cent as raw material in the petrochemical industry. Natural gas consumption is expected to increase by 3.5 per cent this year. Meanwhile, the transport sector is projected to see a 24 per cent drop in energy consumption while electricity use is forecast to fall slightly by 0.4 per cent.
Thai stocks defy downward Asian trend with slight rise
The Stock Exchange of Thailand (SET) Index closed at 1,531.24 on Monday, up 2.92 points or 0.19 per cent. Transactions totalled THB77.16 billion with an index high of 1,532.94 and a low of 1,512.28.
In the morning session, Krungsri Securities expected the index on Monday to fall to between 1,515 and 1,520 points amid negative sentiment on several fronts.
Foreign funds were likely to flow out due to surging Covid-19 infections, both domestic and overseas, ongoing anti-government protests in Thailand and the weakening baht, Krungsri Securities said.
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The 10 stocks with the highest trade value today were BANPU, CBG, GULF, PSL, PTT, INTUCH, CPALL, AOT, KBANK and KCE.
Other Asian indices were down with one exception:
Japan’s Nikkei Index closed at 27,523.19, down 453.96 points or 1.62 per cent.
China’s Shanghai SE Composite Index closed at 3,517.34, up 1.05 points or 0.030 per cent, while the Shenzhen SE Component Index closed at 14,693.74, down 105.30 points or 0.71 per cent.
Hong Kong’s Hang Seng Index closed at 26,181.46, down 210.16 points or 0.80 per cent.
Taiwan’s TAIEX closed at 16,858.77, down 123.34 points or 0.73 per cent.
South Korea’s KOSPI Index was closed for National Liberation Day.
China urged to review ban on Thai longan as oversupply pulls down price
The Commerce Ministry instructed agriculture and commerce attachés in Beijing on Sunday to urge Chinese authorities to reconsider the ban on longan shipments from Thailand.
The Department of Agriculture will monitor the fruit’s quality and ensure it meets Chinese standards, Commerce Minister Jurin Laksanawisit said.
He added that bilateral talks on the subject will be held towards the end of next week.
Before that, Vice Agriculture and Cooperatives Minister Naraphat Kaewthong will lead a team of officials to the North to deal with the drop in longan prices, Jurin said.
He explained that top-grade longan is currently going at 35 to 40 baht per kilo, while the second grade is priced at 30 baht per kilo and the domestic market grade at 20 to 25 baht per kilo.
Jurin said there is also a severe shortage of migrant workers, as they cannot return to their jobs in Thailand due to the Covid-19 crisis. This shortage in the workforce has also affected the operation of longan processing factories.
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He added that the ministry is planning to sell the fruit at special prices via the government’s Blue Flag stores as well as via grocery trucks and at petrol stations in a bid to boost domestic consumption.
Gold price sees big jump in Thai, Hong Kong markets on back of Comex surge
The price of gold rose by THB300 in morning trade on Monday.
The Gold Traders Association report at 9.32am showed buying price of a gold bar at THB27,950 per baht weight and selling price at THB28,050, while gold ornaments were priced at THB27,439.60 and THB28,550, respectively.
At close on Friday, buying price of a gold bar was THB27,650 per baht weight and selling price THB27,750, while gold ornaments were priced at THB27,151.56 and THB28,250, respectively.
Spot gold price on Monday morning was around US$1,780 (THB59,430) per ounce after Comex gold at close on Friday shot up by $26.40 to $1,778.20 due to support for buying gold as a safe-haven asset after the US revealed that the Michigan University Consumer Confidence Index survey had dropped lower than expectation.
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Hong Kong gold price, meanwhile, rose sharply by HK$220 to $16,530 (THB70,773) per tael on Monday, the Chinese Gold and Silver Exchange Society reported.
The Stock Exchange of Thailand (SET) Index fell by 14.93 points, or 0.98 per cent, to 1,513.39 on Monday morning.
The SET Index closed at 1,528.32 on Friday, down 4.39 points or 0.29 per cent. Transactions totalled THB82.02 billion with an index high of 1,541.08 and a low of 1,525.51.
Krungsri Securities predicted the index on Monday would fall to between 1,515 and 1,520 points as many negative sentiments were pressuring the index.
Foreign funds are likely to flow out due to the rising number of Covid-19 cases, both domestic and overseas, the ongoing anti-government protests and the weakening baht, Krungsri Securities said.
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It recommended selective buying as investment strategy:
▪︎ HANA, KCE, TU, CPF, GFPT, ASIAN, EPG and NER, which benefit from the weakening baht.
▪︎ PSL and TTA, which would benefit from a rise in the freight rate.
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