Worries over rising Covid-19 cases, falling oil price pressure SET
The Stock Exchange of Thailand (SET) Index fell by 1.65 points or 0.10 per cent to 1,578.39 in the morning session on Wednesday. The volume of total transactions was Bt6.80 billion, with an index high of 1,579.42 points and a low of 1,575.56.
AKrungsri Securities said the index on Wednesday would fall to between 1,565 and 1,570 points, in line with the drop in regional indices due to uncertainty over rising Covid-19 cases worldwide, especially in India and South Africa.
It said this negative sentiment caused the oil price to fall and would impact shares related to energy.
“Besides, the index would be under pressure due to volatility in foreign fund flows,” Krungsri Securities said.
It recommended investors buy:
▪︎ TQM, STGT, Com7, Synex, BDMS, BCH and CHG, which benefit amid the Covid-19 crisis.
▪︎ PSL, TTA and RCL, which would benefit from a rise in the freight rate.
▪︎ Hana, KCE, TU, and CPF, which benefit from the weakening baht.
The SET Index closed at 1,580.04 on Tuesday, up 5.13 points or 0.33 per cent. The volume of total transactions was Bt102.62 billion, with an index high of 1,582.49 points and a low of 1,570.53.
Thai currency expected to continue weakening amid virus crisis
The baht opened at 31.29 to the US dollar on Wednesday, weakening from its close of 31.27 on Tuesday. The Thai currency is likely to move between 31.25 and 31.35 during the day, Krungthai Bank market strategist Poon Panichpibool said.
He predicted that in the short term the baht would weaken due to several factors, including the Covid-19 crisis in Thailand and other countries.
Poon explained that the crisis has forced people to hold onto their safe-haven assets – the dollar, for example.
He predicted the baht throughout the week would come under pressure from foreign currency purchases by numerous companies as they move to pay dividends.
Poon also predicted that the baht would move in a wide range as importers have bought the US currency as the baht strengthened to 31.15 per dollar.
Gold price rebounds after falling sharply in the previous day
The price of gold surged by Bt250 per baht weight in morning trade on Wednesday, thanks to a decline in the US bond yield and news that China imported the largest amount of the precious metal in 14 years.
According to a Gold Traders Association report at 9.25am, the buying price of a gold bar was Bt26,300 per baht weight and selling price Bt26,400, while gold ornaments cost Bt25,832.64 and Bt26,900, respectively.
At close on Tuesday, the buying price of a gold bar was Bt26,050 per baht weight and selling price Bt26,150, while gold ornaments cost Bt25,574.92 and Bt26,650, respectively.
The spot gold price on Wednesday was US$1,781 (Bt55,769) per ounce compared to Tuesday’s price, when gold rose by $7.80 to $1,778.40 per ounce.
The Hong Kong gold price on Wednesday rose by HK$80 to $16,470 (Bt66,443) per tael, the Chinese Gold and Silver Exchange Society reported.
U.S. stocks fell for a second day as rising virus cases around the world led to renewed concern over the continued economic impact, overshadowing a batch of solid corporate results.
The S&P 500 extended its slide from an all-time high, with investors showing caution ahead of the brunt of the earnings season. All eyes will be on whether an anticipated rise in profits will bring with it forecasts for stronger growth ahead. IBM Corp. climbed after reporting its largest revenue growth in 11 quarters, while United Airlines Holdings Inc. paced a sell-off in travel stocks on a bigger-than-expected loss. Netflix Inc. tumbled after the close of regular trading as its new streaming users lagged estimates.
Johnson & Johnson posted stronger-than-expected sales, while Travelers Cos.’s earnings beat estimates and Philip Morris International Inc. raised its outlook. Procter & Gamble Co. is boosting the prices of some consumer products as the household-goods behemoth grapples with higher commodity costs.
While American equities are trading at a valuation that’s about 35% above the average of the past decade, investors are focused on what’s forecast to be the best earnings season in two years. One of their biggest concerns is whether companies are equipped to handle mounting inflation pressures as the economic recovery gains momentum.
“Earnings season is ramping up, and there’s this concern about how the multinationals will give their guidance in view of the fact that we haven’t drawn a line under covid yet,” said Fiona Cincotta, senior financial markets analyst at City Index. “That is just starting to unnerve investors. Demand for riskier assets has come off.”
For David Donabedian, chief investment officer at CIBC Private Wealth Management, the stock market has been just taking a breather after a big rally, but there are still reasons to be bullish.
“The economic recovery has taken hold, the earnings recovery has taken hold, everything we’ve seen from first-quarter earnings so far has been that it’s going to be a blowout quarter,” he said.
Elsewhere, the dollar rose for the first time in seven sessions, while the Treasury 10-year yield dropped to the lowest level in more than five weeks.
These are some of the main moves in markets:
Stocks
– The S&P 500 fell 0.7% as of 4 p.m.EDT
– The Nasdaq 100 fell 0.7%
– The Dow Jones industrial average fell 0.8%
– The Russel 2000 Index fell 2%
– The MSCI World index fell 0.9%
Currencies
– The Bloomberg Dollar Spot Index rose 0.2%
– The euro was little changed at 1.2033
– The British pound fell 0.4% to 1.3935
Bonds
– The yield on 10-year Treasurys declined four basis points to 1.562%
– Germany’s 10-year yield declined three basis points to -0.262%
– Britain’s 10-year yield declined two basis points to 0.731%
Commodities
– West Texas Intermediate crude fell 1.5% to $62 a barrel
– Gold futures rose 0.4% to $1,778 an ounce
Published : April 21, 2021
By : Syndication Washington Post, Bloomberg · Claire Ballentine, Vildana Hajric
Oil marks anniversary of crash below zero with rise toward $64
Oil rose toward $64 a barrel, a year to the day after futures for the U.S. benchmark collapsed below zero, with the worlds most important commodity extending its rally on bets for better demand.
West Texas Intermediate advanced 0.5%, after production in Libya fell below 1 million barrels a day amid a budget dispute. The forward curve suggests growing confidence — particularly as U.S. demand recovers — with some market gauges surging in recent days. Several so-called timespreads are in their strongest backwardation in a month, indicating tight supply.
Vitol Group, the world’s biggest independent oil trader, expects demand to come roaring back, echoing optimistic views from OPEC and the International Energy Agency. Vaccine rollouts are bringing confidence back amid stronger economic data emerging from China and the U.S. Still, the virus is rampant in countries such as India, where a refiner is curbing processing because of lower demand.
“Follow-through buying is pushing prices further up but the immediate upside potential could be limited by the relentless march higher in infection rates,” said Tamas Varga, an analyst at PVM Oil Associates.
A year ago Tuesday, the global oil market faced an unprecedented crisis, with WTI closing at -$37.63 a barrel. Prices went negative after lockdowns savaged demand and key producers Saudi Arabia and Russia flooded the market in a price war. A restoration of OPEC+ unity marked by deep supply cuts, as well as the vaccines, have helped prices to climb back.
“The market’s recovery through the past year, though still clouded by uncertainty, makes a repeat of the April 2020 price crash highly unlikely,” said Vandana Hari, founder of Vanda Insights in Singapore. “Some of the circumstances were unique to last year and the initial weeks of the pandemic, such as the confluence of the unanticipated shock of global lockdowns and demand destruction and OPEC+ opening the spigots.”
Published : April 21, 2021
By : Syndication Washington Post, Bloomberg · Sharon Cho, Alex Longley
SET rises 0.33 per cent on Tuesday amid downward Covid-19 trend
The Stock Exchange of Thailand (SET) Index closed at 1,580.04 on Tuesday, up 5.13 points or 0.33 per cent. The volume of total transactions was Bt102.62 billion with an index high of 1,582.49 and a low of 1,570.53.
In the morning session, Krungsri Securities forecast the day’s index would fluctuate between 1,565 and 1,585 amid the slight downward trend in Thailand’s daily Covid-19 caseload and a strong performance by Tisco financial group in the first quarter.
“The index will come under pressure from the rise in US bond yield and volatility in foreign fund flows,” said Krungsri Securities.
It advised investors to monitor banks’ first-quarter performances as they are announced this week.
The 10 stocks with the highest trade value today were SAWAD, KBANK, ADVANC, BFIT, GULF, BBL, SCB, MTC, THCOM and SCGP.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 29,100.38, down 584.99 points or 1.97 per cent.
China’s Shang Hai SE Composite Index closed at 3,472.94, down 4.61 points or 0.13 per cent, while the Shenzhen SE Component Index closed at 14,101.90, down 15.90 points or 0.11 per cent.
Hong Kong’s Hang Seng Index closed at 29,135.73, up 29.58 points or 0.10 per cent.
South Korea’s KOSPI closed at 3,220.70, up 21.86 points or 0.68 per cent.
Taiwan’s TAIEX Index closed at 17,323.87, up 60.59 points or 0.35 per cent.
Kasikorn Research slashes growth forecast for Thai economy
Kasikorn Research Centre has slashed its growth forecast for the Thai economy in this 2021 from 2.6 per cent to 1.8 per cent following the latest outbreak of Covid-19 in the country.
The research centre said the downgrade came despite positive factors such as the upswing in exports as well as current and future government remedial measures.
KResearch said the third wave of Covid-19, which emerged late last month, would impact previous predictions of 2 million foreign tourist arrivals this year.
It pointed out that Thailand’s vaccination rate was a key factor in combating Covid-19 and opening the country to international tourists.
As of Sunday (April 18), only 0.75 per cent of the country’s population had been vaccinated against Covid-19, according to Oxford University’s “Our World in Data” programme.
KResearch forecast that a prolonged outbreak or a fourth wave of infections this year could result in zero growth for the Thai economy in 2021.
Krungsri Research cuts Thailand’s 2021 growth forecast to 2.2%
In a report published on Tuesday, Krungsri Research adjusted downwards Thailand’s GDP growth in 2021 from 2.5 to 2.2 per cent in line with the Covid-19 situation and drought impact.
The centre also reduced its estimate of 4 million arrivals to just 3 million owing to the pandemic, which has been affecting Thailand’s tourism and service industries.
The research house also adjusted public investment estimates down from 10.5 per cent to 7.8 per cent, again due to the impacts of Covid-19 and drought.
The estimate on private investment and consumption, however, was adjusted upwards from 2 to 3.3 per cent and 1.8 to 2.9 per cent respectively due to the government’s economic stimulus measures and increased consumption in the first quarter.
Krungsri Research has also adjusted upward its estimate for exports in 2021 from 3.8 per cent to 6 per cent due to improving global economic conditions. It also predicts an expansion in imports from 5.2 per cent to 12.5 per cent.
Krungsri Research, however, says Thailand’s economic recovery will be delayed and be slower than forecast earlier, due mostly to the third wave of infections.
The research house also suggested the wave could peak between late April and early May with a median forecast of daily new cases peaking at 2,600.
Thailand’s cumulative cases could surge beyond 100,000, and the number of daily cases will fall to below 100 by early July, it predicted.
Rising US bond yield and volatility in foreign funds flow could pressure SET
The Stock Exchange of Thailand (SET) Index rose by 2.80 points, or 0.18 per cent, to 1,577.71 in the morning trade on Tuesday. A Krungsri Securities expected SET to fluctuate between 1,565 and 1,585 despite the decline in Thailands Covid-19 cases and strong Tiscos first-quarter perfomance.
“The index would be under pressure due to the rise in US bond yield and volatility in foreign funds flow,” he said.
He advised investors to follow banks’ first-quarter performance that would be announced this week.
He recommended that investors buy:
▪︎ TQM, STGT, COM7, SYNEX, BDMS, BCH and CHG, which benefit from the Covid-19 outbreak.
▪︎ PSL, TTA and RCL, which would benefit from a rise in the freight rate.
▪︎ HANA, KCE, TU, and CPF, which benefit from the weakening baht.
The SET Index closed at 1,574.91 on Monday, up 25.95 points or 1.68 per cent. The volume of total transactions was Bt87.45 billion with an index high of 1,574.97 and a low of 1,552.91.
Thai currency stays firm against dollar but room for depreciation
The baht opened at 31.21 to the US dollar on Tuesday, unchanged from Mondays close. The Thai currency is likely to move between 31.15 and 31.30, Krungthai Bank market strategist Poon Panichpibool said.
He said the baht had strengthened due to the weakening dollar. However, there were factors looming to weaken the baht, such as the Covid-19 situation in Thailand.
Poon added that importers aimed to purchase the dollar when the baht was at 31.15 to the greenback. Also, exporters planned to sell the dollar when the baht weakens to 31.50 per US dollar.
The market strategist mentioned that the market on Tuesday would focus on results of registered companies around the world. If the turnover were in positive zone, investors would show readiness for risk, he explained.
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