The price of gold dropped by Bt50 per baht weight in morning trade on Thursday, the Gold Traders Association reported. The gold price was down for the second successive day, after dropping by Bt150 per baht weight on Wednesday.
As of 9.22am, 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.
At close on Wednesday, the buying price of a gold bar was Bt26,100 per baht weight and selling price Bt26,200, while gold ornaments cost Bt25,635.56 and Bt26,700, respectively.
The spot gold price moved to US$1,838 (Bt55,187) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February dropped by $6 to $1,844.90 per ounce on Wednesday due to a strengthening dollar. Also, investors delayed gold purchases to follow a key US Federal Reserve meeting.
The Hong Kong gold price meanwhile dropped by HK$60 to $17,010 (Bt65,885) per tael, the Chinese Gold and Silver Exchange Society reported.
BlackBerry revival rewards Watsa’s patience with huge gain
EconJan 28. 2021Attendees look at the Blackberry Keyone smartphone its launch event ahead of the Mobile World Congress in Barcelona, Spain, on Feb. 25, 2017. MUST CREDIT: Bloomberg photo by Chris Ratcliffe.
By Syndication Washington Post, Bloomberg · Michael Bellusci
Day traders have pushed BlackBerry’s share price to levels not seen in more than nine years. They’ve also given a jolt to a Canadian investment company that got crushed in last spring’s market crash.
BlackBerry soared 22.6% to $23.19 as of 9:38 a.m. in New York on Wednesday, bringing its gain for the year to nearly 250%. That is repaying the patience of Prem Watsa and his Fairfax Financial Holdings, which owns 8.3% of the software firm’s shares.
Once the toast of the mobile tech world, BlackBerry failed to keep pace with competitors including Apple and the stock lost most of its value in 2010 and 2011. Around that time, Watsa, a value investor who has tried to model Fairfax after Berkshire Hathaway Inc., began building a large stake, which also includes convertible debentures with a conversion price of $6 each that could be turned into 55 million shares.
The run-up in BlackBerry shares this year would drive a pretax gain of about $1.16 billion for Fairfax in the first quarter, Phil Hardie, a Toronto-based analyst at Bank of Nova Scotia, told clients in a note before markets opened on Tuesday. Hardie upgraded his recommendation on Fairfax’s shares to a buy-equivalent.
Fairfax closed at C$488.94 on Tuesday. With a 12.7% gain as of Tuesday’s close, it’s the best-performing financial stock in the S&P/TSX Composite Index this year after being one of the worst in 2020 with a 29% drop.
Scotiabank’s most bullish scenario for Fairfax “implies almost 50% upside and assumes that the stock sheds its valuation discount and trades at book value, with Fairfax locking in recent gains in BlackBerry through hedging or monetizing its position,” Hardie wrote. Fairfax didn’t respond to a request for comment.
Watsa has been waiting for such a payoff for years. Fairfax even organized a bid to take BlackBerry private in 2013 — the same year the latter changed its name from Research In Motion Ltd. — then abandoned it in favor of a bond deal and management shakeup that brought in John Chen as chief executive officer.
Despite an unrealized loss of $50 million on the investment as of 2019, Fairfax’s letter to shareholders last March made clear Watsa still believed in the CEO, who has focused BlackBerry on enterprise software. “We continue to support John Chen as he works diligently to make BlackBerry a growth company again,” Watsa wrote.
The sudden rise has been partly fueled by Reddit forums and social media channels where retail speculators seek out unloved or heavily-shorted stocks like GameStop Corp., hoping to drive them up quickly.
RBC Capital Markets downgraded its recommendation on BlackBerry to a sell-equivalent Tuesday, citing the torrid rally and unchanged fundamental outlook. Analyst Paul Treiber kept his price target at $7.50. Scotiabank also elected to cut BlackBerry’s stock rating to a sell-equivalent early Wednesday, as analyst Paul Steep calling the share run “overdone.” Still, shares are gaining about 11% in premarket trading Wednesday.
Watsa, 70, founded Fairfax in 1985, following Warren Buffett’s strategy of using insurance float as a way to build an investment portfolio. With a market value of more than C$14 billion it’s a fraction of Berkshire’s size, though it’s more than twice as large as buyout firm Onex Corp.
By The Washington Post · David J. Lynch, Hamza Shaban, Hannah Denham, Tory Newmyer
Shares of video game retailer GameStop and movie theater giant AMC Entertainment soared to astronomical levels Wednesday as an apparent swarm of ordinary investors, spurred by a Reddit message board, took on big Wall Street funds that had bet the stock prices would fall.
GameStop shares more than doubled, to $347.51, and have soared more than 400% this week. AMC, beleaguered by the coronavirus pandemic and stay-home measures, quadrupled to $19 a share.
The GameStop and AMC price surges were so dramatic that trading for both companies was temporarily halted by the stock exchanges to temper volatility. But once trading resumed, prices took off again. TD Ameritrade, a leading trading platform, took the unusual step of imposing restrictions on both stocks, citing “an abundance of caution amid unprecedented market conditions.”
The extraordinary trading, which many analysts linked to a pandemic-related surge in day trading by average investors, seemed disconnected from the companies’ financial prospects. GameStop, which sells video game software in brick-and-mortar retail outlets, has lost money in five of the past six quarters. Revenue in the three-month period that ended in October was down 31% from the same period one year earlier.
As officials at the White House and the Federal Reserve offered statements of reassurance, there were signs that market watchdogs at the Securities and Exchange Commission will scrutinize the unusual trading.
Federal securities law prohibits market participants from misrepresenting a company’s prospects to artificially affect its share price. With Reddit users cloaked in anonymity, there is no way of knowing whether messages touting GameStop come from average joes or scam artists executing a “pump-and-dump” stock scheme.
In a statement after the markets closed, Allison Herren Lee, the SEC’s acting chair, and two subordinates, said the commission was “actively monitoring the ongoing market volatility in the options and equities markets” and was working with other regulators “to assess the situation and review the activities” of those involved.
“Folks at the SEC are going to want to take a very close look at this,” said Harvey Pitt, who chaired the commission from 2001 to 2003. “When you have extreme volatility of this nature, the system is not necessarily working correctly . . . You’re starting to see things that would look to a regulator as if they were manipulation.”
The soaring stock prices for companies that many professional investors scorn illuminated the striking influence of social media, or what Peter Atwater, an economics lecturer at the College of William & Mary, calls a “flash mob with money.”
In their open challenge to the deep-pocketed hedge funds that bet on individual stock prices falling, the online mob brandishes an us-against-them rhetoric that echoes the populism of former president Donald Trump’s supporters.
Posters savaged CNBC, the financial news channel, for allegedly siding with Wall Street firms over the ordinary investor. One post touting GameStop was tagged “bankrupting institutional investors for Dummies.”
On Twitter, Anthony Scaramucci, a hedge fund manager who was briefly a Trump adviser, wrote: “We are witnessing the French Revolution of finance.”
Still, to many analysts, the frenzied buying that has driven the shares of companies such as GameStop into a vertical climb was uncomfortably reminiscent of the dot-com era financial bubble, which ended with technology stocks losing more than half their value. Some described the Dow Jones industrial average’s 63% gain from its March lows as evidence that the Federal Reserve’s near-zero interest rates were fueling a similar craze.
“Activity like this has been going on since the beginning of markets, but there is no question that the Fed’s easy money policy has been the liquor that has made many market participants drunk,” Peter Boockvar, chief investment officer for Bleakley Advisory Group.
Wednesday’s trading frenzy played out amid a decline in the broader market. The Dow fell nearly 634 points, or 2.1%, as investors sorted through a mixed bag of corporate earnings. The broader S&P 500 dropped nearly 99 points, or 2.6%, while the tech-heavy Nasdaq shed about 355 points, or 2.6%.
Treasury Secretary Janet Yellen and the rest of the Biden administration’s economic team are monitoring the matter, White House press secretary Jen Psaki told reporters at a midday briefing, adding that “the stock market is not the only measure of the health of our economy.”
Federal Reserve Chair Jerome Powell, speaking at a scheduled news conference, said he would not comment “on a particular company or day’s market activity.”
The stunning rise in AMC and GameStop shares has become one of Wall Street’s most-watched dramas, pitting an apparent army of retail investors against wealthy institutions. Some of the Reddit participants, who had organized in the message board r/wallstreetbets, said they were punishing Wall Street and “democratizing” trading.
In a Twitter thread Wednesday, Reddit co-founder Alexis Ohanian said the mood on the message boards was one of retribution against big institutions. “This is an echo of what we’ve seen social media enable the public to challenge institutions for the last decade,” he said. “And also – please – don’t invest money you can’t afford to lose, ESPECIALLY, in risky investments.”
For weeks, users posting on r/wallstreetbets have rallied support for GameStop, which has been targeted by hedge fund short sellers as it struggles to adapt its brick-and-mortar business for the age of e-commerce.
The message board known as “wsb” describes itself as “like 4chan found a Bloomberg terminal,” in a reference to the anything-goes discussion site and the sophisticated software package used by financial professionals.
In daily posts, wsb’s 3.3 million members trade irreverent jibes, make liberal use of the f-word and cheer one another’s winning investments.
The Reddit posters began betting last year that GameStop’s stock price would rise, challenging Wall Street short sellers wagering the opposite. As the shares rose, the Wall Street traders have been forced to take massive losses.
Among those rooting on the Reddit crowd this week was Elon Musk, the chief executive of Tesla, who tweeted “Gamestonk!!” with a link to the message board. (Musk has waged his own battles against short sellers, saying in 2018 that “what they do should be illegal.”)
“GameStop has become a pyramid scheme,” said Michael Pachter, an analyst with Wedbush Securities. Investors buying the stock at $200 are convinced someone else will buy it from them at $250, he said but that won’t last forever.
“Pyramid schemes work as long as new investors believe there will be new investors behind them; when it’s clear nobody else is going to come in, they are less likely to participate.”
Over the past week, the Reddit board has started putting its support behind AMC, which recently announced that it had raised nearly $1 billion to avoid bankruptcy. Its stock price also has jumped.
Other stocks that had fallen out of favor with institutional investors, such as BlackBerry and Bed, Bath and Beyond, also are enjoying a second act.
On the Reddit forum, participants who said they were ordinary investors celebrated their collective efforts to take down big hedge funds. This week, Melvin Capital, a large hedge fund, was forced to seek a financial rescue from two other funds.
Citadel and Point72 Asset Management injected a combined $2.75 billion into the wounded short seller in return for a stake in future revenue. Melvin lost big after betting that GameStop’s stock would fall.
John Stark, former director of the SEC’s office of Internet enforcement, said the commission almost certainly has taken the first steps to investigate the trading activity.
“I can’t imagine there isn’t an open investigation and probably a formal order to find out who’s on these message boards,” he said.
Some Reddit users seem to have the same idea. “Dear SEC. I may be guilty for a lot but if you give me a deal ill gladly rat out a bunch of other people,” user w8w8dont posted on Wednesday.
But James Angel, a finance professor at Georgetown University, said proving wrongdoing could be difficult. “It’s going to be hard for the SEC to find blatant manipulation, but they owe it to look,” he said. “The normal locker-room chatter you see in these chat rooms is probably not enough to get convictions. But are there bigger players here? We’ll see.”
To establish manipulation that runs afoul of securities laws, Angel said regulators will need to prove that traders engaged in “an intentional act to push a price away from its fundamental value to seek a profit.” In market parlance, this is typically known as a pump-and-dump scheme: Participants buy a stock; artificially inflate its price, say, by circulating rumors about the company; then sell for a profit.
There is no evidence yet of such a strategy behind the surge in GameStop and other stocks, Angel notes. The SEC probably will examine “who’s really moving the market. Is it a bunch of Robinhooders trading 10 shares each, or are there larger players out there engaging in a bigger pump-and-dump?” he said.
Customers of several retail brokerage firms – including TD Ameritrade, Robinhood Crypto, E-Trade, Charles Schwab, Fidelity Investments, Vanguard and Interactive Brokers – experienced service disruptions Wednesday morning, which many attributed to higher volume. The website Downdetector reported log-in and website problems for some of the firms, as well as Reddit, starting after 9 a.m. Eastern, with most issues resolved within an hour.
R/wallstreetbets also experienced service issues as volunteer moderators briefly set the group to private Wednesday morning to keep up with the morning’s frenzy of activity, a company spokeswoman said.
By Syndication Washington Post, Bloomberg · Claire Ballentine, Sophie Caronello
U.S. equities tumbled as a risk-off mood descended on markets amid growing concern that stocks have become overvalued. The dollar jumped the most since September, and Treasury yields slipped.
The S&P 500 index recorded its worst rout since October, with the gauge down 2.6% after Federal Reserve officials left their main interest rate unchanged without promising any more aid for the economy. The sell-off was widespread, sinking all 11 groups in the benchmark stock gauge. Turmoil continued in pockets of the market where retail traders are becoming a dominant force, with shares of GameStop and AMC Entertainment Holdings soaring as investment pros questioned whether there’s any rationale behind the moves.
The Stoxx Europe 600 index declined the most in five weeks as the European Union and AstraZeneca squabbled over vaccine delivery delays. The euro fell after a European Central Bank official said the markets are underestimating the odds of a rate cut. Officials in the United Kingdom announced new rules to try to curb the spread of the novel coronavirus, and Germany cut its 2021 economic growth forecast to 3% from 4.4%.
An extended run higher for stocks has reversed this week as investors look to a spate of earnings releases for clues about the health of the corporate world. Federal Reserve Chairman Jerome Powell said at a news conference that the U.S. economy was a long way from full recovery and still short of policymakers’ inflation and job goals.
“It was always doubtful the Fed would announce any new actions this month,” said Seema Shah, chief strategist at Principal Global Investors. “After a few weeks of Fed speakers pushing back on the monetary tightening narrative, it wasn’t surprising to hear Powell reassert the message that tapering is not on the agenda for 2021.”
The stock sell-off is also being driven partly by speculation that hedge funds will be forced to reduce their equity holdings as retail investors make a concerted effort to boost shares the professional investors have bet against, according to Matt Maley, chief market strategist at Miller Tabak.
“A lot of them are getting burned by their shorts, and I think the market is worried that they’ll have to sell some stocks to meet their margin calls,” he said.
Elsewhere, bitcoin fell below $30,000 before paring the decline and precious metals slumped. Asian stocks fell for a second day as investors took a breather after the regional benchmark’s ascent to a record high Monday. In the region, benchmarks in India, Vietnam and the Philippines were among the biggest losers.
– – –
These are some key events coming up in the week ahead:
– Apple, Tesla, Facebook and Samsung are among companies reporting results.
– Fourth-quarter GDP, initial jobless claims and new-home sales are among U.S. data releases Thursday.
– U.S. personal income, spending and pending home sales come Friday.
– – –
These are the main moves in markets:
Stocks
– The S&P 500 index fell 2.6% as of 4 p.m. New York time.
– The Stoxx Europe 600 index declined 1.2%.
– The MSCI Asia Pacific index fell 0.8%.
– The MSCI Emerging Market index dipped 1.3%.
Currencies
– The Bloomberg Dollar Spot index rose 0.7%.
– The euro fell 0.5%, to $1.2104.
– The British pound fell 0.4%, to $1.3683.
– The Japanese yen fell 0.5%, to 104.18 per dollar.
Bonds
– The yield on 10-year Treasurys fell one basis point, to 1.02%.
– Germany’s 10-year yield fell one basis point, to -0.55%.
– Britain’s 10-year yield was little changed at 0.27%.
Commodities
– West Texas Intermediate crude rose 0.1%, to $52.67 per barrel.
The Stock Exchange of Thailand (SET) Index closed at 1,498.13 on Wednesday, down 14.70 points or 0.97 per cent. Total transactions amounted to Bt78.79 billion with an index high of 1,515.32 and a low of 1,498.25.
In the morning session, an analyst at Krungsri Securities forecast the day’s index would fall to 1,500-1,505 points over a lack of positive sentiment.
He said investors would delay share purchases ahead of today’s US Federal Reserve meeting, while the Delta Electronics price was volatile after the SET extended cash balance regulations for the company’s shares.
“Meanwhile, the decline in foreign fund flows would pressure the index,” he said.
He advised investors to follow the Fed meeting amid expectations the US central bank will keep the interest rate at 0.25 per cent and maintain quantitative easing of $120 billion (Bt3.6 trillion) per month.
The 10 stocks with the highest trade value today were EA, BANPU, KBANK, GPSC, PTT, STGT, GULF, SAWAD, SCGP and SCB.
As of 4.30pm, the price of oil rose by US$0.47 or 0.89 per cent to $53.08 per barrel, while gold dropped by $6.80 or 0.37 per cent to $1,844.10 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 28,635.21, up 89.03 points or 0.31 per cent.
China’s Shang Hai SE Composite Index closed at 3,573.34, up 3.91 points or 0.11 per cent, while Shenzhen SE Component Index closed at 15,413.84, up 61.42 points or 0.40 per cent.
Hong Kong’s Hang Seng Index closed at 29,297.53, down 93.73 points or 0.32 per cent.
South Korea’s KOSPI Index closed at 3,122.56, down 17.75 points or 0.57 per cent.
Taiwan’s TAIEX Index closed at 15,701.45, up 42.60 points or 0.27 per cent.
The Stock Exchange of Thailand (SET) Index fell by 2.67 points, or 0.18 per cent, to 1,510.16 in the morning session on Wednesday.
The SET is predicted to fall to between 1,500 and 1,505 points due to a lack of positive sentiments, said a Krungsri Securities analyst.
He believes investors will delay share purchases as they keep an eye on the latest US Federal Reserve meeting as well as volatility in the price of Delta Electronics shares after the SET extended cash balance regulations for the company’s shares.
“Meanwhile, the decline in foreign fund flows would pressure the index,” he said.
He advised investors to follow the Fed meeting amid expectations that the US central bank would maintain the interest rate at 0.25 per cent and continue using quantitative easing of US$120 billion (Bt3.6 trillion) per month.
He recommended investors buy:
▪︎ PTTGC, TOP, IVL, EPG, VNT, SCGP, CBG, ROJNA, TVO, STGT, CPF, RCL, PSL, SYNEX, COM7, XO, WICE, JMT, MTC, SAWAD and KCE, whose fourth-quarter turnover is expected to improve.
▪︎ SPALI, AP and LH, which will benefit from the Cabinet’s move to cut home transaction fees.
The SET Index closed at 1,512.83 on Tuesday, up 11.21 points, or 0.75 per cent. Total transactions amounted to Bt87.82 billion, with an index high of 1,514.82 points and a low of 1,490.37.
The price of gold dropped by Bt150 per baht weight in morning trade on Wednesday, the Gold Traders Association reported.
As of 9.25am, the buying price of a gold bar was Bt26,100 per baht weight and selling price Bt26,200, while gold ornaments cost Bt25,635.56 and Bt26,700, respectively.
At close on Tuesday, the buying price of a gold bar was Bt26,250 per baht weight and selling price Bt26,350, while gold ornaments cost Bt25,772 and Bt26,850, respectively.
The spot gold price moved to US$1,845 (Bt55,300) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February dropped by $4.30 to $1,850.90 per ounce on Tuesday due to mass sell-offs of safe-haven assets in response to strong US economic data.
Meanwhile, the market is keeping an eye on the US Federal Reserve meeting.
The Hong Kong gold price dropped by HK$60 to $17,090 (Bt66,086) per tael, the Chinese Gold and Silver Exchange Society reported.
By Syndication Washington Post, Bloomberg · Lu Wang, Claire Ballentine
U.S. stocks slid ahead of earnings reports from the biggest tech companies. The dollar weakened.
The S&P 500 Index edged lower after struggling to gain traction throughout the day, weighed down by worries over new coronavirus variants and hurdles to a fresh aid package. Small-caps were among the worst performers as traders turned away from bets on an end to covid lockdowns. GameStop Corp. extended its astronomical surge as day traders continued to pile into the heavily shorted retailer.
European stock markets closed in the green. Naturgy Energy Group SA soared 15% as asset manager IFM Global Infrastructure offered to buy a stake in the Spanish utility. Sweden’s EQT AB, one of Europe’s biggest private equity firms, jumped 15% after agreeing to take over Exeter Property Group in a $1.9 billion deal.
Global stocks are mostly treading water near record highs as U.S. corporate earnings season gears up this week, with traders also keeping an eye on developments related to the pandemic and its spread. Vaccine coverage won’t reach a point that would stop transmission of the virus in the foreseeable future, the World Health Organization said.
“There’s little bit of bumpiness to start the week,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. “Part of the cross current we’re seeing is concern about the new variants of the virus that seem to be spreading quite a bit. It just raises a question of uncertainty and when we’re going to get out from under the cloud of covid.”
Elsewhere, Treasury yields held steady. Bitcoin retreated to trade near $32,000. In Asia, stock markets took a dive after China’s central bank withdrew cash from the banking system and an official cautioned about asset bubbles. The MSCI Asia Pacific Index sank the most in two months and internet giant Tencent Holdings Ltd. lost 6.3%.
These are the main moves in markets:
Stocks
– The S&P 500 Index fell 0.2% as of 4 p.m. EST.
– The Stoxx Europe 600 Index gained 0.6%.
– The MSCI Asia Pacific Index fell 1.2%.
– The MSCI Emerging Market Index dipped 1.5%.
Currencies
– The Bloomberg Dollar Spot Index fell 0.3%.
– The euro rose 0.2% to $1.2166.
– The British pound climbed 0.4% to $1.3737.
– The Japanese yen rose 0.1% to 103.62 per dollar.
Bonds
– The yield on 10-year Treasurys rose one basis point to 1.04%.
– Germany’s 10-year yield added two basis points to -0.54%.
– Britain’s 10-year yield was little changed at 0.26%.
Commodities
– West Texas Intermediate crude fell 0.5% to $52.55 per barrel.
Oil and gas conglomerate PTT Plc is closely monitoring the new wave of Covid-19 infections to see how it will affect the demand of liquified natural gas (LNG), Wuttikorn Stithit, PTT’s senior executive vice president for the gas business unit, said.
Earlier, PTT had forecast that demand for LNG this year would expand 4 per cent year on year, but after the new wave, this prediction will have to be reviewed.
Last year, up to 4,700 million cubic feet of LNG was consumed per day, down 8 per cent from 2019. The biggest decline was in the electricity generating sector following the outbreak.
He said in general, the price of LNG in the spot market will drop from March to May, but said PTT has enough supplies to meet local demands.
Govt to offer 30 million people Bt7,000 each in new round of Covid relief
EconJan 27. 2021Finance Minister Arkhom Termpittayapaisith
By The Nation
The Cabinet on Tuesday approved a new round of Covid-19 relief for low-income groups. The new package will offer Bt7,000 in credit for shopping necessities and cover around 30 million people.
Eligible for the new scheme are state welfare card holders, recipients of the shopping and travel co-payment schemes, and other groups.
The government will transfer the e-payment to recipients, but it cannot be withdrawn as cash. Welfare cards holders will receive money automatically on February 5. Co-payment recipients will be automatically screened for eligibility and do not have to re-register for the new scheme. Others have to register at http://www.เราชนะ.com/ between January 29 and February 12.
Key conditions of eligibility are taxable income of not more than Bt300,000 in 2019 and total bank deposits of not more than Bt500,000 as of December 31 last year. Recipients can use the e-payment to pay for goods, but not alcoholic drinks or cigarettes.
The e-payments can also be used for public transport, and taxis, tuk-tuks and motorcycle taxis, said Finance Minister Arkhom Termpittayapaisith.
The Finance Ministry estimates the package will cover 30.1 million mostly self-employed people.
The government is also considering aid measures for low-ranking state officials, Arkhom said.
Attendees look at the Blackberry Keyone smartphone its launch event ahead of the Mobile World Congress in Barcelona, Spain, on Feb. 25, 2017. MUST CREDIT: Bloomberg photo by Chris Ratcliffe.
Finance Minister Arkhom Termpittayapaisith
SootinClaimon.Com 