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https://www.nationthailand.com/business/30403597

OPEC sees weaker outlook as it keeps lid on supply

EconMar 12. 2021Oil pumping jacks near Neftekamsk, in the Republic of Bashkortostan, Russia, on Nov. 19, 2020. MUST CREDIT: Bloomberg photo by Andrey Rudakov.

By Syndication Washington Post, Bloomberg · Grant Smith

OPEC downgraded the outlook for demand for its crude over the next two quarters, in keeping with the group’s plans to keep a tight rein on supply.

The Organization of Petroleum Exporting Countries trimmed estimates for the amount of crude it will need to pump in the second quarter by 690,000 barrels a day, amid a weaker picture for demand and stronger growth in rival supply.

“Ongoing lockdown measures, voluntary social distancing and other pandemic-related developments” continue to weigh on economic activity, the group’s Vienna-based research department said in its monthly report. Conditions should improve in the second half of 2021, it added.

The wariness is consistent with last week’s decision by Saudi Arabia and its fellow producers across the Organization of Petroleum Exporting Countries and its allies. The coalition surprised traders and propelled prices to a 14-month high above $70 a barrel by largely refraining from restoring any more of the production halted during the coronavirus.

Crude traders had widely expected OPEC+ to agree to revive about 1.5 million barrels a day at last week’s meeting, and the shock move has divided observers on whether the alliance now risks over-heating global markets.

The report published on Thursday confirms that OPEC doesn’t share those concerns. The cartel reduced its overall forecasts for the volume of crude it will need to provide this year by 250,000 barrels a day, compared to last month’s report, to an average of 27.26 million a day.

As the group is pumping considerably below this level, it should manage to deplete surplus oil inventories that accumulated during the pandemic.

Output from OPEC’s 13 members plunged by 647,000 barrels a day to 24.848 million a day last month, the report showed, as de facto leader Saudi Arabia implemented extra cutbacks to speed up the market’s rebalancing.

The kingdom said at the group’s last meeting on March 4 that, out of a sense of “caution,” these additional extra curbs will remain in place in April, and be reversed only gradually thereafter.

Still, OPEC expects the demand outlook to brighten in the second half of 2021. It boosted projections for global oil demand in the fourth quarter by 970,000 barrels a day, and requirements for its crude in that period by 400,000 a day.

“By the end of the first half, economic activity is expected to accelerate as the impact of the pandemic is expected to taper off,” the group wrote in its report. This momentum will be “supported by pent-up demand, especially in contact-intensive service sectors such as tourism and travel.”

That could allow OPEC to reverse some of the output restraints, which — including Riyadh’s additional cuts — now stand at about 8 million barrels a day, or roughly 8% of global supplies.

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https://www.nationthailand.com/business/30403595

U.S. jobless claims hit lowest since November with more vaccines

EconMar 12. 2021A worker puts down a table cloth at a restaurant in San Francisco on March 9, 2021. MUST CREDIT: Bloomberg photo by David Paul Morris.

By Syndication Washington Post, Bloomberg · Olivia Rockeman

Applications for U.S. jobless benefits fell by more than forecast last week to the lowest since early November as covid-19 vaccinations accelerated and states eased more business restrictions.

Initial claims in regular state programs rose fell by 42,000 to 712,000 in the week ended March 6, Labor Department data showed Thursday. On an unadjusted basis, the claims decreased by 47,170 to 709,458. The median estimate in a Bloomberg survey had called for 725,000 initial claims.

Continuing claims — an approximation of the number of Americans filing for ongoing unemployment benefits — declined by 193,000 to 4.14 million in the week ended Feb. 27. At the same time, claims in federal programs ballooned as of Feb. 20, including a more than one million surge in Pandemic Unemployment Assistance, a program for self-employed and gig workers.

The initial claims figures suggest that more vaccines and fewer business restrictions are helping to slow the rate of job cuts. States including Texas, Mississippi and Wyoming have recently announced plans to relax pandemic-related rules, like capacity limits for dining and gatherings, which may boost hiring in the coming weeks.

States with the largest decline in initial claims last week included New York, Texas and Mississippi. Meanwhile, California posted the largest increase.

As of Feb. 20, the total number of claims in all unemployment programs was 20.1 million, according to the Labor Department. President Joe Biden’s $1.9 trillion package — which he plans to sign into law on Friday — extends some unemployment benefits, including the supplemental weekly jobless benefit of $300, until September.

Digging deeper:

– Initial claims for Pandemic Unemployment Assistance rose by almost 42,000 to 478,001 in the week ended March 6. PUA eligibility was expanded recently to include individuals who won’t work because they are afraid of contracting coronavirus on the job, which could be contributing to the increase.

– Continuing claims for PUA rose by 1.1 million in the week ended Feb. 20.

– In the week ended Feb. 20, there were 5.5 million continuing claims for Pandemic Emergency Unemployment Compensation, a program that provides extended jobless benefits for those who have exhausted their regular state benefits, an increase of more than 986,000.

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https://www.nationthailand.com/business/30403588

SCB lifts Thai GDP forecast to 2.6% this year

EconMar 12. 2021

By The Nation

Siam Commercial Bank’s Economic Intelligence Centre (IEC) has revised upwards its 2021 Thai GDP growth forecast from 2.2 per cent to 2.6 per cent. The IEC cited faster-than-expected recovery of Thai exports, which returned to pre-Covid levels in January and February. It revised upwards its export growth forecast for 2021 from 4 per cent to 6.4 per cent.

However, the SCB thinktank also warned that recovery of the Thai tourism industry would only gain momentum in the fourth quarter of 2021 as vaccines brought herd immunity in key Asian markets.

On the labour front, data indicated Thai workers are experiencing falling income resulting from underemployment and skill mismatches, which could limit domestic demand and consumer confidence recovery going forward, the EIC said.

However, it estimates the government still has around Bt390 billion of budget to support recovery, including Bt250 billion from the Bt1-trillion emergency borrowing fund.

On monetary policy, the EIC expects the Bank of Thailand (BOT) to keep its policy rate at 0.5 per cent this year. It also forecasts the BOT will respond to liquidity demand from SMEs by adjusting soft loan criteria and promoting asset warehousing to reduce risks of fire sales in the real estate and hotel business.

On the baht, the EIC plays down concerns that the currency will strengthen, forecasting an exchange rate of Bt30-31 per US dollar at the end of 2021. But it said the BOT is likely to have limited room to address baht appreciation as Thailand is being monitored for currency manipulation by the US Treasury.

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https://www.nationthailand.com/business/30403587

SET nudges up after US passes $1.9tn injection for economy

EconMar 11. 2021

By The Nation

The Stock Exchange of Thailand (SET) Index closed at 1,575.13 on Thursday, up 2.08 points or 0.13 per cent. Total transactions amounted to Bt102.01 billion with an index high of 1,584.61 and a low of 1,569.87.

In the morning session, a Krungsri Securities analyst expected the SET to rise to between 1,580 and 1,590 points after US lawmakers approved a $1.9-trillion (Bt58.3 trillion) economic stimulus package, the US bond yield fell, and the consumer price index for February rose slightly.

The SET also gained positive sentiment from the Thai government’s economic stimulus measures and plans to lift restrictions on tourists entering the country.

The 10 stocks with the highest trade value today were CPF, IVL, AOT, CPALL, BAM, PTT, STA, DELTA, KBANK and OR.

As of 4.30pm, the oil price rose by $0.80 or 1.24 per cent to $65.24 per barrel, while the gold price dropped by $12.50 or 0.73 per cent to $1,734.30 per ounce.

Other Asian indices were on the rise:

Japan’s Nikkei Index closed at 29,211.64, up 175.08 points or 0.60 per cent.

China’s Shang Hai SE Composite Index closed at 3,436.83, up 79.09 points or 2.36 per cent, while the Shenzhen SE Component Index closed at 13,866.37, up 303.03 points or 2.23 per cent.

Hong Kong’s Hang Seng Index closed at 29,385.61, up 478.09 points or 1.65 per cent.

South Korea’s KOSPI closed at 3,013.70, up 55.58 points or 1.88 per cent.

Taiwan’s TAIEX Index closed at 16,179.56, up 267.89 points or 1.68 per cent.

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https://www.nationthailand.com/business/30403585

Credit rating firm gives Thailand A- based on govt policies

EconMar 11. 2021Patricia Mongkhonvanit, director-general of the Public Debt Management Office (PDMO)

By The Nation

Japan-based Rating and Investment Information, Inc (R&I) maintained Thailand’s sovereign credit rating at A- with a stable outlook, signifying confidence in the government’s policies and the positive direction of the country’s economy.

Patricia Mongkhonvanit, director-general of the Public Debt Management Office (PDMO), said the rating remains stable because the government has taken proactive measures in the development of high value-added industries and the Eastern Economic Corridor (EEC).

Infrastructure investment projects have been continuously implemented to stimulate the economy and attract foreign investment, giving the country better potential for long-term growth and escape from the middle-income trap.

R&I will be closely following Thailand’s political uncertainty and changes in the population structure that affect the implementation of national economic and growth measures.

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https://www.nationthailand.com/business/30403574

69% of Thais prefer using digital channels for banking communication during hardship: FICO survey

EconMar 11. 2021

By The Nation

A recent survey by global analytics software firm FICO has shown that 69 per cent of Thais prefer to use digital channels to engage with their banks during a time of financial hardship.

The poll, conducted in December 2020 during the height of the global Covid-19 pandemic, demonstrates the willingness of consumers to embrace digital banking and the opportunities that exist for banks to develop their offerings.

The high level of smartphone penetration in Thailand means that 44 per cent of Thais preferred to communicate via their mobile banking apps; 14 per cent used Internet banking; 6 per cent wanted to use virtual conference technology; 3 per cent preferred telebanking and only 2 per cent communicated via email.

“The risk of infection and social distancing requirements made branch visits less appealing last year, accelerating a shift to digital banking channels globally,” said Aashish Sharma, risk lifecycle and decision management lead for FICO in the Asia Pacific.

“Being able to deliver and manage numerous channels in line with customer preference and deliver a seamless and engaging experience is a challenge that is here to stay. Investment in customer management and communication tools that span these channels and product silos and can deliver personalisation and improved decision making is key to making digital banking a success,” he said.

Customer attitudes to new technology from banks such as debt collection automation can yield some interesting preferences and behaviour.

“It is worth noting that during periods of hardship, some customers prefer to deal with the issue using intelligent, automated online services, such as our FICO Customer Communication Services, so as to avoid the embarrassment of talking to an agent about outstanding loans. If customers prefer digital channels during times of hardship, their most difficult time, it seems to me we can expect branch banking to continue its decline,” Sharma explained.

Importance of maintaining banking relationships

Banks still have a data and relationship advantage when compared to fintech challengers.

The survey revealed that across the Asia Pacific, one in three consumers preferred to have all their banking needs serviced by one bank. In Thailand this was higher, at 35 percent, with a further 40 per cent saying they “somewhat agreed” they would like to deal with just one primary bank.

“Managing multiple bank accounts or finance products with different lenders can often be a complex, time-consuming and costly process for the average banking customer,” said Sharma. “Digital banking users today are looking for greater control and visibility of their financial position.”

When asked about their willingness to try a fintech or challenger bank, 38 per cent of Thais said they were inclined to consider a competitor, and a further 40 per cent were open to the idea.

Most appealing reasons to switch banks

When asked about the reasons they would make the switch to a competitor, 50 per cent of Thais said their number one reason would be to secure improved personalisation and controls in their digital banking services. The poll defined this as the ability to view transaction history, update personal details, reset passwords and other such functions. Interestingly, personalisation and control was also the top reason by 31 per cent for switching across the Asia Pacific.

Other top switching drivers across the Asia Pacific were the ability to control a payment card (set transaction limits, lock/unlock); the ability to set up recurring payments; and improved security features such as biometrics and two-factor authentication.

FICO’s Advancing New Experiences in Digital Banking survey was conducted in December 2020 using an online quantitative poll of 5,000 consumers across ten countries carried out by an independent research company. The countries surveyed were Australia, Hong Kong, Indonesia, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam.

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https://www.nationthailand.com/business/30403572

SET expected to get a boost from planned reopening of country, US stimulus approval

EconMar 11. 2021

By The Nation

The Stock Exchange of Thailand (SET) Index rose by 10.51 points or 0.67 per cent to 1,583.56 in the morning session on Thursday.

A Krungsri Securities analyst expected the SET to rise to between 1,580 and 1,590 points after US Congress approval of a $1.9-trillion (Bt58.3 trillion) economic stimulus package, plus the decline in the US bond yield as the country’s February consumer price index rose slightly.

Also, the SET gained positive sentiment from the Thai government’s measures to stimulate the economy and news that the country aimed to fully reopen to visitors.

He recommended investors buy:

▪︎ AOT, Mint, Centel, 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.

▪︎ CBG, ICHI, SAPPE, RBF, DOD, PTG, and TACC, which benefit from positive news on hemp production and its general use.

▪︎ PSL, TTA and RCL, which would benefit from a rise in the freight rate.

The SET Index closed at 1,573.05 on Wednesday, up 22.46 points or 1.45 per cent. Total transactions amounted to Bt107.92 billion, with an index high of 1,573.55 points and a low of 1,550.45.

Related stories:

Baht expected to strengthen

Gold price up for second consecutive day

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https://www.nationthailand.com/business/30403571

Baht expected to strengthen

EconMar 11. 2021

By The Nation

The baht opened at 30.72 to the US dollar on Thursday, unchanged from Wednesday’s close.

The Thai currency is likely to move between 30.65 and 30.75, Krungthai Bank market strategist Poon Panichpibool said.

He expected the baht to strengthen from the decline in the US 10-year bond yield and inflow of foreign funds.

“However, the Thai currency won’t strengthen much due to mass buy-ups of the dollar, while the baht may weaken to between 30.75 and 30.90 if the dollar strengthens due to currency market volatility,” he said.

He advised exporters to avoid foreign-exchange risks when the baht weakens as the weakening dollar and inflow of foreign funds would boost the Thai currency.

“Exporters may consider using alternative tools, such as the currency option, to deal with risks as the currency market faces high volatility,” he added.

Meanwhile, Jitipol Puksamatanan, the head of the Easy Invest team at SCB Securities, advised investors to keep an eye on the capital market as the baht would be under pressure due to the change in economic direction.

Related stories:

SET expected to get a boost from planned reopening of country, US stimulus approval

Gold price up for second consecutive day

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https://www.nationthailand.com/business/30403569

Gold price up for second consecutive day

EconMar 11. 2021

By The Nation

The price of gold rose by Bt150 per baht weight in morning trade on Thursday, the Gold Traders Association reported. The precious metal has seen gains for two successive days.

As of 9.27am, the buying price of a gold bar was Bt25,000 per baht weight and selling price Bt25,100 while gold ornaments cost Bt24,544.04 and Bt25,600, respectively.

At close on Wednesday, the buying price of a gold bar was Bt24,850 per baht weight and selling price Bt24,950 while gold ornaments cost Bt24,407.60 and Bt25,450, respectively.

The spot gold price moved to US$1,730 (Bt52,966) per ounce after rising by $4.90 to $1,721.80 on Wednesday, thanks to the weakening dollar and the decline in the US bond yield after the US February consumer price index rose slightly.

The Hong Kong gold price rose by HK$120 to $15,970 (Bt63,001) per tael, the Chinese Gold and Silver Exchange Society reported.

Related stories:

Baht expected to strengthen

SET expected to get a boost from planned reopening of country, US stimulus approval

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https://www.nationthailand.com/business/30403561

What’s in Congress’ $1.9 trillion covid bill: Checks, unemployment insurance and more

EconMar 11. 2021President Joe Biden

By The Washington Post · Rachel Siegel

The House is poised to pass President Joe Biden’s $1.9 trillion stimulus plan Wednesday afternoon, marking a major Democratic legislative victory aimed at boosting the economy and ending the pandemic.

The vast relief package, known as the American Rescue Plan,would send $1,400 checks to most Americans, extend unemployment insurance and allocate billions of dollars for coronavirus testing.

Democrats have aimed to enact the law before mid-March, when unemployment benefits covered by the last relief bill expire for millions of Americans. Biden could sign the legislation as soon as this week.

Here’s a rundown of the American Rescue Plan:

– – –

Major buckets

– Unemployment benefits:

The package extends the existing $300 weekly unemployment benefit through Sept. 6, as well as provide a tax break on $10,000 in unemployment benefits.

Earlier proposals would have increased the weekly benefit from $300 to $400 per week. But that amount was lowered to $300 after a lengthy standoff in the Senate.

The $900 billion stimulus package passed in December provided the unemployed an extra $300 per week in benefits. That program expires in mid-March.

– Stimulus checks:

The bill would send $1,400 stimulus checks on top of the $600 payments issued through the stimulus bill passed in December. Roughly $400 billion of the package would go toward another round of checks.

Biden agreed to narrow eligibility for a new round of $1,400 payments to appease more moderate Democrats. Under the new structure, the checks would phase out faster for those at higher income levels compared with the formula in Biden’s initial proposal and the House bill.

Individuals earning $75,000 per year and couples earning $150,000 would still receive the full $1,400-per-person benefit. However, the benefit would disappear for individuals earning more than $80,000 annually and couples earning more than $160,000.

For example, that means singles making between $80,000 and $100,000 and couples earning between $160,000 and $200,000 would be newly excluded from seeing any benefit under the revised structure.

– Child tax credit:

Under the legislation, most Americans would receive $3,000 a year for each child ages 6 to 17, and $3,600 for each child under age 6.

The provision in the bill would last one year and be sent via direct deposit on a “periodic” basis. It is a major expansion of the existing child tax credit, which currently provides $2,000 a year for children from birth through age 16.

The more regular payments are intended to help offset costs families face day-to-day, instead of sending families one annual payment.

– Aid to state and local governments:

The package designates $350 billion for states, cities, tribal governments and U.S. territories.

Local government funding emerged as one of the top flash points in stimulus negotiations. Moderate Senate Democrats have pushed to redirect some of those funds to invest in infrastructure and to expand the broadband network. Others on the left have grown concerned that some states would use federal aid to cut local taxes instead of spending money on covid relief.

Facing deep budget shortfalls, state and local governments have shed 1.3 million jobs since the pandemic began last year – a loss of more than 1 in 20 government jobs, according to a Washington Post analysis of government data. While tax revenue grew in some states last year, the majority – at least 26 states – were hit with declines.

– Pandemic response

Tens of billions of dollars will fund coronavirus testing and contact tracing; increasing the size of the public health workforce and funding vaccine distribution and supply chains.

This week, Biden said there will be enough coronavirus vaccine doses for “every adult in America” by the end of May – a two-month acceleration of his previous projection of July.

– New provisions

The bill provides $510 million for the FEMA Emergency Food and Shelter Program. That money would support homeless services providers for overnight shelter, meals, one month’s rent and mortgage assistance and one month’s utility payments.

It expands the Employee Retention Tax Credit for start-up companies and other businesses hit by the pandemic

The bill also increases the value of the federal COBRA health insurance program from 85 percent to 100 percent

The bill adds a $10 billion infrastructure program to help local governments continue crucial capital projects.

The bill makes all coronavirus-related student loan relief tax-free.

The bill increases the total amount of Amtrak relief funding by $200 million.

For education funding, the bill sets aside $1.25 billion for summer enrichment; $1.25 billion for after-school programs and $3 billion for education technology

The Senate bill also adds $8.5 billion in funds for the Provider Relief Program to assist rural health care providers.

– – –

Not in the bill

– Minimum wage:

An amendment offered by Sen. Bernie Sanders, I-Vt., to increase the minimum wage to $15 did not win over enough Democratic support.

In a statement Friday, Sanders said: “If any Senator believes this is the last time they will cast a vote on whether or not to give a raise to 32 million Americans, they are sorely mistaken. We’re going to keep bringing it up, and we’re going to get it done because it is what the American people demand and need.”

Last month, the Senate parliamentarian ruled that the minimum wage hike was not permissible within the rules of budget reconciliation, the procedure Democrats are using to pass the relief bill with a simple majority instead of the 60 votes normally required. The House bill included the minimum raise increase from $7.25 to $15.