The price of gold in Thailand dropped by THB100 per baht weight in morning trade on Wednesday due to mass sell-offs of the precious metal in response to strong US economic data.
AGold Traders Association report at 9.27am showed the buying price of a gold bar at THB27,900 per baht weight and selling price at THB28,000, while gold ornaments cost THB27,394.12 and THB28,500, respectively.
At close on Tuesday, the buying price of a gold bar was THB28,000 per baht weight and selling price THB28,100, while gold ornaments cost THB27,500.24 and THB28,600, respectively.
The spot gold price on Wednesday was US$1,899 (THB59,187) per ounce compared to the price on Tuesday, when it dropped slightly, by 30 cents to $1,905 per ounce.
The Hong Kong gold price on Wednesday fell by HK$110 to $17,570 (THB70,586) per tael, the Chinese Gold and Silver Exchange Society reported.
The baht opened at 31.16 to the US dollar on Wednesday, unchanged from Tuesday’s close.
The Thai currency is likely to move between 31.10 and 31.20 during the day, Krungthai Bank market strategist Poon Panichpibool said.
He predicted the baht would move in a narrow range despite the dollar rebounding and the currency weakening slightly.
Poon said the baht is presently being supported by the gold trade and fund flows by foreign investors, especially in stocks.
Poon also suggested that the Covid-19 vaccine distribution was a key factor related to investment. He believed that if the vaccine was distributed without any interruption, more people would invest in the Thai stock market, strengthening the baht in the next quarter.
U.S. stocks inched lower as investors assessed the impact of another economic report on Federal Reserve monetary policy.
The S&P 500 fluctuated between gains and losses after U.S. manufacturing data topped estimates while also showing some weakness in employment figures. A measure of factory activity in May rose on stronger order growth. However, manufacturers are struggling because of supply shortages and labor constraints.
Energy shares were among the best performing Tuesday as the OPEC+ alliance agreed to hike output in July and gave a bullish forecast. WTI crude futures rose to their highest in more than two years. The dollar ended little changed, while Treasures, gold and Bitcoin slipped.
Global stocks are starting off the month near record highs, underpinned by a recovery from the health crisis and ample liquidity. Still, a raft of strong readings are stoking concerns of inflation and that central banks will withdraw support earlier than anticipated.
The employment figures from the ISM manufacturing report could be an indicator of a tight job market ahead of key American jobs data expected Friday. Federal Reserve Governor Lael Brainard said there are risks on both sides of monetary policy as the U.S. economy surges ahead while millions of people are unemployed.
Peter Tchir, head of macro strategy at Academy Securities Inc., said on Bloomberg TV that he tries to ignore most of the current data in favor of focusing on future expectations.
“We’re going to see more jobs,” Tchir said. “It seems awkward to dismiss current data but really it’s not telling us anything we don’t already know. So it’s really trying to anticipate what data’s going to look like five, six months down the road. I think it’s going to be very, very positive and this engine of growth is going to continue.”
Some corporate highlights:
–One-fifth of U.S. beef capacity was wiped out in the JBS cyberattack
–Mudrick Capital Management is said to have sold its entire AMC stake after an equity raise
–J&J must pay a $2.1 billion talc award after the Supreme Court rejected an appeal
–KKR and CD&R plan to take Cloudera private in a deal valued at about $5.3 billion
Here are key events to watch this week:
–Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan speak Wednesday
–U.S. employment report for May on Friday
These are some of the main moves in markets:
Stocks
–The S&P 500 was little changed as of 4 p.m. New York time
–The Nasdaq 100 fell 0.2% to the lowest since May 24
–The Dow Jones Industrial Average rose 0.1%, climbing for the fourth straight day, the longest winning streak since May 7
–The MSCI World index rose 0.3% to a record high
Currencies
–The Bloomberg Dollar Spot Index rose 0.1%, more than any closing gain since May 26
–The euro was little changed at $1.2219
–The British pound slipped 0.4%, more than any closing loss since May 19
–The Japanese yen was little changed at 109.49 per dollar
Bonds
–The yield on 10-year Treasuries advanced two basis points to 1.61%
–Germany’s 10-year yield was little changed at -0.18%
–Britain’s 10-year yield advanced three basis points to 0.83%
Commodities
–West Texas Intermediate crude rose 2.4% to the highest on record
–Gold futures fell 0.2% to $1,902 an ounce
Published : June 02, 2021
By : Syndication Washington Post, Bloomberg · Jennifer Bissell-Linsk, Vildana Hajric
The Stock Exchange of Thailand (SET) Index closed at 1,618.59 on Tuesday, up 25.00 points or 1.57 per cent. Transactions totalled THB116.03 billion with an index high of 1,620.53 and a low of 1,598.66.
In the morning session, Krungsri Securities expected Tuesday’s SET Index to rise to between 1,600 and 1,606 points on hopes of economic recovery as mass Covid-19 vaccinations gather strength worldwide.
It added that the index also gained positive sentiment from the rising oil price amid expectations of increased demand.
However, investors should beware of volatility in foreign fund flows and mass sell-offs of shares to take profits, Krungsri Securities said.
The 10 stocks with the highest trade value today were PTT, OR, KBANK, HANA, GPSC, SIRI, KCE, AOT, TIDLOR and PTTEP.
Other Asian indices were on the rise, with one exception:
Japan’s Nikkei Index closed at 28,814.34, down 45.74 points or 0.16 per cent.
China’s Shanghai SE Composite Index closed at 3,624.71, up 9.24 points or 0.26 per cent, while Shenzhen SE Component Index closed at 15,034.78, up 38.40 points or 0.26 per cent.
Hong Kong’s Hang Seng Index closed at 29,468.00, up 316.20 points or 1.08 per cent.
South Korea’s KOSPI closed at 3,221.87, up 17.95 points or 0.56 per cent.
Taiwan’s TAIEX Index closed at 17,162.38, up 93.95 points or 0.55 per cent.
The baht opened at 31.19 to the US dollar on Tuesday, strengthening from 31.24 at close on Monday.
The Thai currency is likely to move between 31.15 and 31.25 during the day, Krungthai Bank market strategist Poon Panichpibool said.
He explained that the baht was moving in a narrow range, despite the weakening dollar and gold trade.
Also, the baht was affected negatively by the Covid-19 situation in Thailand, which had prompted foreign investors to sell their assets in the country.
SET gets a lift from mass vaccination campaigns worldwide and oil price boost
The Stock Exchange of Thailand (SET) Index rose by 8.85 points, or 0.56 per cent, to 1,602.44 on Tuesday morning. The volume of total transactions was THB21.09 billion with an index high of 1,603.81 and a low of 1,598.66.
Krungsri Securities forecast that the SET Index on Tuesday would rise to between 1,600 and 1,606 points on hopes of an economic recovery as mass Covid-19 vaccinations gathered strength worldwide.
It added that the index also gained positive sentiment from rising oil price, as Opec+ expected world oil markets to get acutely tight due to increasing demand.
However, investors should beware of volatility due to foreign funds flows and mass sell-offs of shares to take profits, Krungsri Securities said.
It recommended that investors buy:
▪︎ BDMS, BCH, CHG, MINT, CENTEL, AOT, CPALL, HMPRO, CPN and CRC, which gained positive sentiment from mass vaccinations and reopening of the country.
▪︎ PTT, PTTEP, PTTGC and IVL, which benefit from the rising oil price.
The SET Index closed at 1,593.59 on Monday, up 11.61 points or 0.73 per cent. Transactions totalled THB79.81 billion with an index high of 1,594.65 and a low of 1,578.09.
The price of gold in Thailand rose by THB50 per baht weight in morning trade on Tuesday.
The Gold Traders Association report at 9.31am showed the buying price of a gold bar at THB28,100 per baht weight and selling price at THB28,200, while gold ornaments were priced at THB27,591.20 and THB28,700, respectively.
At close on Monday, the buying price of a gold bar was THB28,050 per baht weight and selling price THB28,150, while gold ornaments were THB27,545.72 and THB28,650, respectively.
Spot gold on Tuesday was US$1,913 (THB59,670) per ounce. The US gold market on Monday was closed for Memorial Day.
Hong Kong gold price on Tuesday rose by HK$20 to $17,670 (THB71,029) per tael, the Chinese Gold and Silver Exchange Society reported.
Biden set for G-7 boost in bid for all nations to impose minimum global corporate tax
WASHINGTON – Finance ministers from Group of Seven nations meeting in London on Friday are expected to back President Joe Bidens call for a global minimum tax on corporate profits, giving him an early win in a grueling diplomatic campaign that is just beginning.
The new minimum tax, one half of a two-pronged global reform effort, is designed to halt a cycle of corporate tax-cutting that has sapped government revenue around the globe. As part of a package deal, negotiators are also wrestling with European demands to tax American technology giants such as Google and Facebook, which earn substantial revenue in countries where they have little physical presence.
Biden catalyzed the global tax debate this month by lowering to 15% from 21% his proposed worldwide minimum. If he can secure agreement from the world’s leading democracies – en route to a broader global consensus later this year – it could eventually produce the most significant global tax shift in decades.
Putting a floor beneath multinationals’ tax bills in other countries would help the president raise the corporate rate at home to 28% by reducing the incentive for corporations to continue shifting hundreds of billions of dollars in profits to low-tax venues.
Along with opposition from corporate lobbyists, additional obstacles loom, including objections from low-tax countries such as Ireland as well as likely noncompliance from China and Russia. After more than three decades of factory offshoring, any global minimum levy also might only minimally reshape the map of global production and investment.
“Fundamentally, the goal for all of us is to make sure companies that are multinationals are paying their fair share of taxes,” Deputy Treasury Secretary Wally Adeyemo said in an interview. “Anything we can do to close the gap is going to be a boon to the American economy and business.”
Biden confronts a complex chore, which blends rewriting the tax code’s eye-glazing arcana with the diplomatic puzzle of satisfying the interests of both advanced and developing nations. The varying domestic and global political calendars mean administration officials may end up asking Congress to change U.S. tax law before other nations have acted.
Negotiators are simultaneously wrestling with both the global minimum levy and the challenge of taxing digital companies. Several global bodies such as the G-7 and the G-20 are involved. The U.K., which hosts Friday’s finance minister session and a leaders’ summit in June, insists that the digital and minimum tax issues be resolved in a single bargain. Securing E.U. agreement, meanwhile, requires unanimity among its 27 nations. And the international talks are occurring as the United States gears up to rewrite its domestic tax laws.
Amid all these moving parts, the expected G-7 endorsement “is good news in terms of the possibility of a global agreement,” said Michael Mundaca, U.S. national tax department leader for Ernst & Young. “But it’s still very early.”
Biden’s time-consuming multilateral strategy signals a departure from President Donald Trump’s preference for unilateral tariffs.
The Democrat’s determination to use a tax code overhaul to reset the terms of global commerce is reflected in the addition to his Treasury Department team of several prominent academic tax specialists, including Kimberly Clausing of Reed College, Rebecca Kysar of Fordham Law School and Itai Grinberg of Georgetown University.
The president’s aim is to shrink the role that tax calculations play in corporate investment decisions, boosting economic efficiency and income. But even some supporters caution that the immediate gains may prove modest.
“We will get some revenue by shrinking the use of tax havens, especially for intangibles, and we will get the benefit of multinationals locating any start-ups in the U.S.,” said Steven Rosenthal, a senior fellow at the Urban Institute. “But I don’t think we’ll see the end of factories and jobs leaving America. To the extent that’s done now, it’s more because of other factors such as technology and wages. It’s not done for tax rules.”
Under the auspices of the Organization for Economic Co-operation and Development (OECD) in Paris, 137 nations have been wrestling since 2013 with the question of how to tax corporations in a globalized, digital economy.
The pandemic’s budgetary impact, coupled with an American president determined to narrow the gap between rich and poor, have given momentum to the idea of a global minimum corporate tax, U.S. officials and tax specialists said.
Governments around the world spent an estimated $16 trillion battling the novel coronavirus over the past year, according to Vitor Gaspar, director of the International Monetary Fund’s fiscal affairs department. All those bills for health care and economic support drove the average country’s public debt to 99% of gross domestic product this year, up from 83.7% in 2019.
That has left governments thirsty for revenue. Changing the way corporate taxes are collected could harvest between $100 billion and $600 billion annually, according to published estimates.
“The benefits are tremendous. Once we have it, the race to the bottom that is depriving emerging markets and developing countries from revenue is going to stop,” Kristalina Georgieva, managing director of the International Monetary Fund, said recently. “I get a strong sense of confidence that this is going to be done and we would all breathe a sigh of relief when it is done.”
Even without action by other nations, the Biden administration expects to reap more than $533 billion over the next decade by reducing incentives for U.S. corporations to shift assets and incomes abroad, according to the president’s budget proposal released Friday.
The global debate over raising government revenue caps a generation of collapsing corporate tax rates. Since 1980, the global average rate set in national laws, weighted according to economic output, has fallen from more than 46% to 26%, according to the nonprofit Tax Foundation.
In 2017, the Trump administration lowered the U.S. corporate rate to 21%. But what corporations actually pay – the effective rate – is less than 8%, according to the congressional Joint Committee on Taxation.
Annual revenue from corporate taxes relative to the size of the economy is now less than one-quarter as large as in 1967, according to the Congressional Budget Office. The Biden administration sees raising the corporate share as an essential way to pay for its “Build Back Better” agenda of infrastructure and social spending.
“We can keep giving every break in the world to corporations and CEOs, or we can raise the corporate tax rate back to 28% . . . which is still lower than it was at any point between World War I and 2017, and they’re making trillions of dollars,” the president said Thursday in Cleveland.
Determining how – and how much – to tax corporate earnings has become tougher as companies expanded their cross-border operations and drew greater profits from intangible goods such as software and intellectual property.
Corporate accountants easily shift income on paper to low-tax jurisdictions such as Ireland, the Cayman Islands or Bermuda: 40%of the profits multinationals earn outside their home country are “artificially shifted to tax havens,” according to a 2018 study by Gabriel Zucman, an economics professor at the University of California at Berkeley, and Ludvig S. Wier and Thomas R. Tørsløv, both of the University of Copenhagen.
Corporate leaders oppose Biden’s plans. Even as the proposal for a global minimum tax appears to be gaining steam at the G-7, business leaders say that differences in the structure of European and U.S. tax codes – such as which expenses can be deducted from taxable income – make it difficult to imagine implementing a uniform corporate tax.
“All we know is they’re talking about a rate. We don’t know what it applies to. We don’t know how it applies,” said Catherine Schultz, vice president for tax and fiscal policy at the Business Roundtable.
Speaking at a recent Washington Post roundtable, the IMF’s Georgieva said she expected negotiators to continue haggling over the rate for the global minimum as well as potential implementation timetables.
U.S. officials still hope to eventually get a global minimum rate above 15%. But the current negotiations represent a balancing act: They need a rate low enough to win wide support but high enough to shrink the incentive for U.S.-based multinationals to engage in profit shifting.
After Friday’s scheduled gathering of finance ministers from the G-7 – the United Kingdom, France, Germany, Canada, Italy, Japan and the United States – the administration’s strategy winds through additional global meetings. Negotiators hope to secure an agreement in principle some time this summer, with a final accord sealed at a Group of 20 leaders summit in Rome at the end of October.
Yet even if a diplomatic agreement is reached, each nation will need to rewrite its tax code through legislation. So Congress will probably vote on the administration’s tax plan before that work is completed.
“They want to push for a tax change domestically at a time when all they’ll have will be political commitments from the OECD countries. Those political commitments are just that. They’re political commitments. They’re not changes in law,” said Brent McIntosh, who was Treasury’s top international official in the Trump administration.
OPEC+ sees tight oil market as ministers set for supply talks
A year after shuttering unprecedented volumes of crude, the OPEC+ alliance is expecting world oil markets to get acutely tight.
The coalition led by Saudi Arabia and Russia believes that the glut created during the pandemic has nearly gone, and that oil stockpiles will diminish rapidly in the second half of the year as lockdowns ease and travel gathers pace.
That leaves the Organization of Petroleum Exporting Countries and its partners with a decision they will start pondering as soon as Tuesday: whether to pour more oil into the market in the second half when the outlook is still so mired in uncertainty.
Holding output steady would support the market against the twin risks of renewed virus outbreaks and a potential export flood from fellow OPEC member Iran. But with Brent futures near $70 a barrel, it could also jeopardize the global economy and feed into the inflationary pressures fixating Wall Street.
“There are many moving parts when it comes to factors affecting the global oil market, such as the pace of change during the pandemic,” OPEC Secretary-General Mohammad Barkindo said after preliminary consultations on Monday.
At their meeting on Tuesday, ministers are expected to press ahead with a gradual increase already penciled in for July, completing the return of 2 million barrels since May. In theory, according to a historic deal struck in the depths of the oil crisis last year, the group has committed to hold at that level until early 2022. But a tight market may call for the agreement to be revised.
Delegates said initial discussions would begin on Tuesday about the alliance’s moves after July. No decision will be made, they said. But any hints the ministers give will be closely scrutinized — by inflation forecasters as much as oil traders.
OPEC’s Joint Technical Committee estimated on Monday that by the end of July stockpiles in developed nations will be below the average levels seen during 2015 to 2019 — a key benchmark for the group. Between September and December, inventories will be depleted at a brisk clip of more than 2 million barrels a day.
That encourages many observers to believe that OPEC+ will need to open the taps in the second half of the year.
“The market is now facing the exact opposite dilemma of April 2020,” said Louise Dickson, an analyst at consultants Rystad Energy.
“Producers now have just as delicate of a task to bring back enough supply to match the swiftly rising oil demand,” said Dickson. “If markets over-tighten, a flare-up in prices could jeopardize the global economic recovery.”
But the demand outlook remains beset with uncertainties. Indian energy demand is taking a big hit as Covid-19 rages through the country. Japan and Malaysia, key consumers of OPEC’s crude, have recently announced tougher measures to deal with the latest infections.
“The resurgence of COVID-19 cases in some Asian and Latin American countries remains a source of concern, and could still dampen economic activities and an oil demand rebound,” the JTC said in its report.
A critical factor in the group’s decision-making will be Iran.
Tehran is in talks with world powers to revive a 2015 nuclear accord that limited its atomic activities in return for U.S. sanctions relief. Iran is keen to reach an agreement before it holds presidential elections on June 18. If that happens, and Washington lifts sanctions, Iran may be able to ramp up exports quickly.
Iran’s oil minister said on Monday the country can increase its crude production rapidly, and analysts estimate output could rise to about 4 million barrels a day.
OPEC’s Barkindo signaled at the JTC meeting that Iran’s comeback “will occur in an orderly and transparent fashion,” causing no upset to the stability that other OPEC+ nations have toiled to achieve.
As ministers weigh the risks of bringing more oil back onto the market, the debate may well re-open old fault-lines in the leadership of the coalition.
Riyadh and Moscow have often diverged on how quickly to bolster output, with the kingdom typically advocating restraint and Russia more impatient to expand sales volumes. The United Arab Emirates, another key player, has also shown eagerness to resume exports.
“It remains a delicate balancing act,” said Bill Farren-Price, a director at research firm Enverus and veteran observer of the cartel.
Published : June 01, 2021
By : Syndication Washington Post, Bloomberg · Grant Smith, Salma El Wardany, Javier Blas
The Stock Exchange of Thailand (SET) Index closed at 1,593.59 on Monday, up 11.61 points or 0.73 per cent. Transactions totalled THB79.81 billion with an index high of 1,594.65 and a low of 1,578.09.
In the morning session, Krungsri Securities expected the index on Monday to fluctuate between 1,575 and 1,595 points, citing hopes of global economic recovery plus the start of mass vaccination in Thailand on June 7.
The US Federal Reserve, meanwhile, is likely to maintain its low interest rate and quantitative easing.
However, Krungsri Securities said the SET would come under pressure from uncertainty over rising US inflation, after personal consumption in April increased by 0.6 per cent, plus the outflow of foreign funds.
The 10 stocks with the highest trade value today were SIRI, KBANK, RCL, STGT, CPF, DELTA, KCE, CPALL, HANA and PTT.
Other Asian indices were on the rise with one exception:
Japan’s Nikkei Index closed at 28,860.08, down 289.33 points or 0.99 per cent.
China’s Shanghai SE Composite Index closed at 3,615.48, up 14.69 points or 0.41 per cent, while the Shenzhen SE Component Index closed at 14,996.38, up 143.50 points or 0.97 per cent.
Hong Kong’s Hang Seng Index closed at 29,151.80, up 27.39 points or 0.094 per cent.
South Korea’s KOSPI closed at 3,203.92, up 15.19 points or 0.48 per cent.
Taiwan’s TAIEX closed at 17,068.43, up 197.57 points or 1.17 per cent.
SootinClaimon.Com 