The central bank’s Monetary Policy Committee on Wednesday voted unanimously to maintain the policy rate at 0.50 per cent in a bid to support economic recovery amid uncertainties.
Titanun Mallikamas, the committee’s assistant governor, said the Thai economy is expected to grow by 3 per cent this year, and by 4.7 per cent next year thanks to a recovery in the export sector and the government’s stimulus measures.
“However, the expansion still lower than previously predicted due to the drop in foreign tourists and the fallout of the Covid-19 pandemic,” he said.
The committee also expects the country’s inflation rate to be lower than expected, though credit risk is likely to rise as many households and businesses are under pressure due to the new wave of infections.
“Hence, we believe that the continuation of stimulus measures and cooperation between government agencies is key to relieving people’s sufferings, which will lead to a sustainable economic recovery,” he said.
He added that the committee will use additional financial tools to support recovery if necessary, while monitoring the sufficiency of government measures and other risk factors, like the pandemic situation both locally and overseas.
The Stock Exchange of Thailand (SET) Index dropped by 6.20 points, or 0.40 per cent, to 1,558.05 in the morning session on Wednesday.
A Krungsri Securities analyst predicted that the SET Index would fall to a range between 1,555 and 1,560 points due to a new wave of Covid-19, especially in European countries, and the falling oil price.
“Meanwhile, the index would be under pressure amid uncertainty over the US move to increase corporate tax and volatility in fund flows,” he said.
He advised investors to follow the Monetary Policy Committee meeting on Wednesday. The committee is expected maintain the interest rate at 0.5 per cent.
He recommended investors buy:
▪︎ AOT, Mint, Centel, AAV, BA, CPN, CRC and Major, which benefit from positive news of a Covid-19 vaccine in Thailand.
▪︎ Hana, KCE, TU and CPF, which benefit from the weakening baht.
▪︎ Ichi, Sappe, RBF, DOD, IP, TACC, Gunkul, Kiss and Ziga which benefit from positive news on hemp production and its general use.
The SET Index closed at 1,564.25 on Tuesday, down 2.11 points or 0.13 per cent. Total transactions amounted to Bt93 billion with an index high of 1,574.14 points and a low of 1,562.03.
The price of gold dropped by Bt100 per baht weight in morning trade on Wednesday, the Gold Traders Association reported.
As of 9.28am, the buying price of a gold bar was Bt25,300 per baht weight and selling price Bt25,400 while gold ornaments cost Bt24,847.24 and Bt25,900, respectively.
At close on Tuesday, the buying price of a gold bar was Bt25,400 per baht weight and selling price Bt25,500 while gold ornaments cost Bt24,938.20 and Bt26,000, respectively.
The spot gold price rose to US$1,731 (Bt53,672) per ounce after falling by $13 to $1,725.10 on Monday due to the strengthening dollar.
The Hong Kong gold price dropped by HK$100 to $16,010 (Bt63,904) per tael, the Chinese Gold and Silver Exchange Society reported.
By Syndication Washington Post, Bloomberg · Vildana Hajric
U.S. equities fell, with companies that would benefit from an end to lockdowns faring the worst, amid concern that rising virus cases and new restrictions in Germany signal the global reopening will be delayed.
The S&P 500 Index slumped and the small-cap Russell 2000 dropped 3.6% as beneficiaries of the reopening trade including Carnival Corp. and TripAdvisor Inc. tumbled. An index of airline shares fell the most since October.
The dollar strengthened, while the 10-year U.S. Treasury yield slid for a second day after Federal Reserve Chairman Jerome Powell played down the risk that economic growth would spur unwanted inflation. Oil dropped below $60 a barrel on concern the market is oversupplied.
While setbacks in the coronavirus fight are putting investors on the back foot, the stabilization in bond yields is providing some relief against fears that heavy U.S. spending could reignite inflation and force tighter central-bank policy. Investors also took stock of equity gains on the first anniversary of the S&P 500’s bear-market bottom. The gauge has surged about 75% since then.
“When you consider how far we’ve come it is truly staggering,” said Chris Larkin, managing director of trading and investing product at E*Trade Financial. “The market today has some jitters as it considers what a return to normal means for easy money policies, fiscal support, and interest rates, but for any investor thinking we’re poised for a drop, it’s important to remember that the market is going through historically healthy growing pains and there is still a lot more recovery ahead of us.”
Elsewhere, European shares slumped after Chancellor Angela Merkel put Germany into lockdown over Easter to try to defuse another wave of coronavirus infections. Asian shares also declined.
These are some of the main moves in financial markets:
Stocks
– The S&P 500 Index fell 0.8% as of 4 p.m. EDT.
– The Stoxx Europe 600 Index decreased 0.2%.
– The MSCI Asia Pacific Index decreased 0.9%.
– The MSCI Emerging Market Index fell 1.1%.
Currencies
– The Bloomberg Dollar Spot Index gained 0.6%.
– The euro fell 0.7% to $1.1849.
– The British pound weakened 0.8% to $1.3752.
– The Japanese yen strengthened 0.2% to 108.62 per dollar.
Bonds
– The yield on 10-year Treasurys fell eight basis points to 1.62%.
– Germany’s 10-year yield dropped three basis points to -0.34%.
– Britain’s 10-year yield declined five basis points to 0.76%.
Commodities
– West Texas Intermediate crude declined 6.6% to $57.48 a barrel.
Thansettakij business newspaper identified 10 stocks on the SET100 Index whose price was lower than the book value on Tuesday.
Generally, shares with a price-to-book value (P/BV ratio) of less than 1 are considered good value by investors.
The P/BV ratio of the 10 stocks listed by Thansettakij was between 0.49 and 0.99.
Mostly commercial bank stocks, they could offer annual dividends of at least 2-3 per cent, reported Thansettakij. Of these, Thanachart Capital (TCAP) offered dividends of up to 8 per cent:
The Stock Exchange of Thailand (SET) Index closed at 1,564.25 on Tuesday, down 2.11 points or 0.13 per cent. Total transactions amounted to Bt93 billion with an index high of 1,574.14 and a low of 1,562.03.
In the morning session, a Krungsri Securities analyst expected the day’s index to fluctuate between 1,560 and 1,575 points despite the US push for another $3 trillion in stimulus spending, plus the sliding US Treasury bond yield.
“However, volatility in fund flows is expected to pressure the index today,” the analyst said.
He advised investors to follow Wednesday’s Bank of Thailand Monetary Policy meeting, which is expected to maintain the interest rate at 0.5 per cent.
The 10 stocks with the highest trade value today were OR, JMART, BANPU, TTA, KBANK, CPF, SCGP, SCC, JMT and CPALL.
Other Asian indices were on the slide:
Japan’s Nikkei Index closed at 28,995.92, down 178.23 points or 0.61 per cent.
China’s Shang Hai SE Composite Index closed at 3,411.51, down 31.93 points or 0.93 per cent, while Shenzhen SE Component Index closed at 13,607.27, down 153.70 points or 1.12 per cent.
Hong Kong’s Hang Seng Index closed at 28,497.38, down 387.96 points or 1.34 per cent.
South Korea’s KOSPI closed at 3,004.74, down 30.72 points or 1.01 per cent.
Taiwan’s TAIEX Index closed at 16,177.59, down 11.63 points or 0.072 per cent.
Thailand and the United Kingdom will sign an agreement to set up a Joint Trade Committee on Commerce and Economic Cooperation this month, with both countries eying a free trade agreement (FTA).
Thailand informed the UK it was interested in forging an FTA at a teleconference meeting with Britain’s trade envoy Mark Garnier on Monday (March 22), said Sansern Samalapa, deputy commerce minister.
Mark Garnier
Thailand will become the first country in Asean to sign a trade deal with the UK after it left the European Union at the beginning of this year.
The Commerce Ministry will sign a memorandum of understanding with the UK minister of international trade next Monday (March 29) to set up the Joint Trade Committee. The committee will promote expansion of Thai-UK trade and investment in agriculture, food and beverage, technology and financial services, Sansern said. It will run in parallel with the private-sector Thai-UK Business Leadership Council.
In 2020, Thai-UK trade amounted to $4.876 billion (Bt154.8 billion) with Thai exports worth $3.087 billion and imports from the UK worth $1.788 billion. Major Thai exports to the UK are processed chicken, motorcycle rubber products and components, autos and equipment, circuit boards, and gems and jewellery. Major Thai imports from the UK include machinery and components, circuit boards, chemicals, pharmaceuticals, electrical machinery and components, and drinks.
Thailand and the UK also discussed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) at the March 22 meeting. The UK has applied to join the trade pact of 11 members (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam) while Thailand is still studying the benefits of becoming a member.
The Stock Exchange of Thailand (SET) Index rose by 6.33 points, or 0.40 per cent, to 1,572.69 in the morning session on Tuesday.
A Krungsri Securities analyst expected the SET Index to fluctuate between 1,560 and 1,575 points despite the US move to consider an estimated $3-trillion economic recovery proposal, plus the slide in the US Treasury yield.
“However, volatility in funds flows is expected to pressure the index today,” he said.
He advised investors to follow the Monetary Policy Committee meeting on Wednesday, as it is expected to maintain the interest rate at 0.5 per cent.
He recommended that investors buy:
▪︎ AOT, MINT, CENTEL, AAV, BA, CPN, CRC and MAJOR, which benefit from positive news of Covid-19 vaccine in Thailand.
▪︎ HANA, KCE, TU and CPF, which benefit from the weakening baht.
▪︎ ICHI, SAPPE, RBF, DOD, IP, TACC, GUNKUL, KISS and ZIGA, which benefit from positive news on hemp production and its general use.
The SET Index closed at 1,566.36 on Monday, up 2.40 points or 0.15 per cent. The volume of total transactions was Bt76 billion with an index high of 1,571.74 and a low of 1,555.38.
The price of gold rose by Bt50 per baht weight in morning trade on Tuesday, the Gold Traders Association reported.
As of 9.26am, the buying price of a gold bar was Bt25,300 per baht weight and selling price Bt25,400, while gold ornaments were priced at Bt24,847.24 and Bt25,900, respectively.
At close on Monday, the buying price of a gold bar was Bt25,250 per baht weight and selling price Bt25,350, while gold ornaments were Bt24,801.76 and Bt25,850, respectively.
Spot gold price dropped to US$1,734 (Bt53,689) per ounce after falling by $3.6 to $1,738.1 on Monday due to mass sell-offs of safe-haven assets after the US stock market surged on mass buy-ups of tech shares.
Meanwhile, uncertainty over Turkey’s economic direction also affected the demand for the precious metal.
Hong Kong gold price rose by HK$60 to $16,080 (Bt64,105) per tael, the Chinese Gold and Silver Exchange Society reported.
By Syndication Washington Post, Bloomberg · Claire Ballentine, Vildana Hajric
Tech companies led U.S. equity gains as a dip in Treasury yields provided a tail wind for stocks.
The S&P 500 Index climbed 0.7% and the Nasdaq 100 fared even better as the 10-year U.S. Treasury yield fell from the highest levels in about 14 months. Small-cap shares underperformed. The bond market remains in focus this week amid a slate of auctions and moves by the Federal Reserve to let a key bank capital exemption lapse.
The dollar weakened slightly and oil edged higher after its worst week since October. Turkey’s markets tumbled after the central bank governor was ousted.
Steadier yields provided relief after last week’s Treasury sell-off served as a stark reminder of concern that a stronger economic recovery could fuel inflation, despite reassuring comments from policymakers. At the same time, traders are betting that growth will swell corporate profits as vaccines work to curb the global pandemic.
“The rise in long-term yields has kind of affected every move we’ve seen in equity markets, from the big sell-off in the higher growth stuff to the rotation into the more economically sensitive sectors,” said Ross Mayfield, investment strategy analyst at Baird. “Any time there is some rate stabilization, it’s kind of the spark for tech to capture a little bit of gains.”
There’s no sign yet that faster economic growth will deliver unwanted inflation or a need to adjust monetary policy, Federal Reserve Bank of Richmond President Thomas Barkin said Monday. For unwanted inflation to take hold, expectations for price increases would have to really move and begin to get factored into business decisions and wage bargaining, he added.
In European markets Monday, gains in tech were offset by declines in travel firms on the Stoxx 600 Index. Banks exposed to Turkey fell after President Recep Tayyip Erdogan moved to replace the country’s third central bank chief in less than two years, sparking a decline of 7% in the lira. Asian shares slipped.
These are some of the main moves in financial markets:
Stocks
– The S&P 500 Index increased 0.7% as of 4 p.m. EDT.
– The Stoxx Europe 600 Index rose 0.2%.
– The MSCI Asia Pacific Index fell 0.3%.
– The MSCI Emerging Market Index was little changed.
Currencies
– The Bloomberg Dollar Spot Index slipped 0.1%.
– The euro strengthened 0.3% to $1.1937.
– The British pound fell 0.1% to $1.3863.
– The Japanese yen strengthened 0.1% to 108.79 per dollar.
Bonds
– The yield on 10-year Treasurys fell four basis points to 1.68%.
– Germany’s 10-year yield declined two basis points to -0.31%.
– Britain’s 10-year yield decreased two basis points to 0.81%.
Commodities
– West Texas Intermediate crude rose 0.2% to $61.55 a barrel.
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