Export-Import Bank tasked with relieving credit crunch on 7 Thai airlines
EconJan 20. 2021Finance Minister Arkhom Termpittayapaisith
By The Nation
Finance Minister Arkhom Termpittayapaisith has asked the Export-Import Bank of Thailand to find ways of providing credit to local airlines to help them counter the Covid-19 impact on the aviation sector.
Arkhom said the ministry would find a solution as soon as possible, insisting that the government was not ignoring local airlines’ problems.
He said the government wanted to provide financial assistance to all business groups that were struggling amid the impact of the outbreak, but had to consider each case carefully.
Seven local airlines are now seeking credit to boost their liquidity after their requests for soft loans from the government were turned down. The airlines have held several rounds of talks with state agencies and ministries for soft loans to counter the impact of Covid-19.
Fund managers are advising investors to buy tech shares for long-term returns in line with global trends.
Tech shares have generated the highest returns in the previous year even though their prices are likely to move in a narrow range this year.
Thanavut Pornrojnangkool, chief investment officer at Bangkok Capital Asset Management (BCAP), said tech shares have generated significant returns despite volatility from the Covid-19 outbreak.
“We recommend investors to buy small- and medium-tech shares that have gained from disruptive technology, such as Alibaba and Tencent, instead of large US tech shares, like Google and Apple, as their prices have limited growth potential,” he said.
He said the company will focus on investments in line with global trends such as disruptive technology, environment, healthcare, and lifestyle, adding that BCAP will launch new funds in the second quarter of this year.
Isara Pudtalsri, chief executive officer of We Asset Management said tech shares would generate long-term returns as the internet technology still has the potential to grow in line with business and society.
He added that the We Next Generation Internet Fund, which focuses on generating returns from internet technology, will be offered until January 28.
“We recommend investing in Tesla, Roku and Square,” he added.
Jumpon Saimala, chief executive officer of Principal Asset Management, said investing in shares linked to rapid growth in technology will help generate long-term returns.
He recommended investing in the Principal Global Opportunity Fund, which covers shares with growth potential amid disruptive technology, such as Amazon, DSV and Hermes.
“The fund’s return last year was 52.91 per cent, while returns in the past three years were 21.84 per cent annually,” he added.
Thailand’s economy has been severely impacted by Covid-19 and is estimated to have shrunk by 6.5 per cent in 2020, with growth projected to expand by 4.0 per cent in 2021, according to the latest World Bank Thailand Economic Monitor report “Restoring Incomes, Recovering Jobs” released on Wednesday.
The report stresses that sustained employment recovery will be essential to helping the country bounce back in 2021 and 2022.
In 2020, weak global demand, a sharp decline in international tourist arrivals and domestic mobility restrictions depressed goods and services exports and private consumption, it said. Exports and private investment are estimated to have declined by 18.5 per cent and 4.4 per cent, respectively, while household consumption declined by 1.3 per cent.
The resulting declines in income have created economic hardship for many, though the government has made good progress in implementing a substantial package of measures to support households and firms, the report continued. Nevertheless, projections indicate that an additional 1.5 million people may have entered poverty in 2020 due to the economic impact from Covid-19, based on a poverty line of US$5.50 (2011 PPP) per day.
This year, the economy is expected to recover gradually, despite the second Covid-19 wave, and growth is forecast to pick up to 4.7 per cent in 2022. However, recovery remains vulnerable to downside risks, including from an extended resurgence of the pandemic resulting in a prolonged stagnation in tourism and domestic activity, a weaker-than-expected global recovery that could lead to continuing trade and supply chain disruptions, and high household debt levels, the report warned.
The pandemic has had a significant impact on Thailand’s labour market, with unemployment increasing especially among young people. The number of hours worked fell, as did monthly incomes. And while the decrease in the number of hours worked have not been restored to normal levels, employment in several sectors including manufacturing remains smaller than a year ago. This means the labour market is in a vulnerable position to confront any future shocks, including a resurgence of Covid-19, it said.
“The Covid-19 crisis and its economic impact have highlighted a key vulnerability for Thailand: the declining number of working-age people, which compounds the challenge of recovering the economic losses of last year,” said World Bank country manager for Thailand Birgit Hansl.
“Improvements in employment, productivity and labour incomes, especially among the poor, will be necessary for a sustainable recovery,” Hansl added.
The report recommends that in the short term the government put in place training programmes to improve workers’ skills and provide financial support while they get back to work. Ongoing efforts are required to ensure that education and training matches the needs of employers. In the longer term, the government can increase employment in the care sector, make childcare more accessible and decrease its cost to help increase female labour force employment.
The report also recommends increasing the retirement age and putting in place performance-based compensation schemes and flexible working arrangements to extend the working lives of older people.
“The decline in the working age population will reduce labour supply and economic output over the coming decades,” World Bank senior economist for Thailand Kiatipong Ariyapruchya said.
“Good jobs will need to be created in high-productivity sectors associated with Thailand’s emerging knowledge economy. Policies to boost labour productivity and labour market participation of older people and women can help promote a sustainable recovery from Covid-19 while addressing challenges associated with an aging population,” Kiatipong added.
The Stock Exchange of Thailand (SET) Index rose by 2.67 points, or 0.18 per cent, to 1,525.26 in the morning session on Wednesday.
An analyst at Krungsri Securities predicted the index would fluctuate between 1,515 and 1,535 points amid hopes of a fresh $1.9-trillion US economic stimulus package and mass buy-ups of shares whose fourth-quarter turnover is expected to improve.
“However, the SET would be under pressure due to its tight valuation and the decline in foreign fund inflows,” he said.
He recommended investors buy:
> PTTGC, TOP, IVL, EPG, SCGP, CBG, Rojna, TVO, STGT, CPF, RCL, PSL, SYNEX, Com7, XO, Wice, JMT, MTC, Sawad and KTC, all of whose fourth-quarter turnover is expected to improve.
> ADVANC, INTUCH, AP, Siri and WHAUP, which pay high dividends.
The SET Index closed at 1,522.59 on Tuesday, up 12.46 points, or 0.82 per cent. Total transactions amounted to Bt87.64 billion, with an index high of 1,529.17 points and a low of 1,518.66. The index snapped a three-day run of losses that began last week on Thursday.
The price of gold was unchanged in morning trade on Wednesday, the Gold Traders Association reported.
As of 9.26am, the buying price of a gold bar was Bt26,150 per baht weight and selling price Bt26,250 while gold ornaments cost Bt25,681.04 and Bt26,750, respectively.
The spot gold price moved to US$1,848 (Bt55,390) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February rose by $10.30 to $1,840.20 per ounce on Tuesday over a weakening dollar.
Meanwhile, gold also gained positive sentiment from incoming Treasury Secretary Janet Yellen’s move to urge Congress to approve a $1.9-trillion economic stimulus package.
The Hong Kong gold price meanwhile dropped by HK$10 to $17,030 (Bt65,854) per tael, the Chinese Gold and Silver Exchange Society reported.
By Syndication Washington Post, Bloomberg · Anchalee Worrachate, Cormac Mullen
U.S. stocks rose, led by gains in tech shares and small caps, with Wall Street parsing the latest earnings ahead of a flood of reports this week.
The S&P 500 Index rebounded from Friday’s sell-off after a three-day weekend that brought little by means of fresh macro news. Ten-year Treasury yields climbed back toward 1.1% and the dollar weakened. Crude oil and emerging markets also advanced. Goldman Sachs Group Inc. turned lower even after reporting that profit more than doubled. Bank of America Corp. shares edged higher after its results. General Motors Co. rose to a record after Microsoft Corp. invested in its self-driving car start-up. Netflix Inc. reports results after markets close.
Janet Yellen encountered early Republican resistance to President-elect Joe Biden’s $1.9 trillion covid-19 relief plan in her confirmation hearing to become treasury secretary. Donald Trump is in the final hours of his term, with Biden to be sworn in at noon Wednesday in Washington.
The market moves on Tuesday show that investors are coming back to the reflation trade, betting that the incoming U.S. administration will use its legislative firepower to propel economic growth. Biden’s stimulus package includes measures like a minimum-wage hike and substantial expansion in family and medical leave — programs that have already triggered Republican opposition.
“Yellen is a positive,” said Mohit Kumar, strategist at Jefferies International. “We should have greater cooperation between the Fed and the Treasury, with both the monetary and fiscal policy working together and supportive. This is a good backdrop for risk sentiment.”
In Asia, Hong Kong stocks closed at the highest level since May 2019. A spending spree by mainland investors is powering gains, lifting the Hang Seng Index up 2.7% on Tuesday.
Signs suggest that mainland buying will continue, with investors shifting out of A shares to buy those listed in Hong Kong. The benchmark Hang Seng Index is still cheaper than the Shanghai Composite gauge in terms of price-to-earnings multiples.
Here are the main moves in markets:
Stocks
– The S&P 500 Index jumped 0.8% as of 4 p.m.EST.
– The Stoxx Europe 600 Index lost 0.2%.
– The MSCI Asia Pacific Index increased 1.2%.
– The MSCI Emerging Market Index increased 1.6%.
Currencies
– The Bloomberg Dollar Spot Index declined 0.2%.
– The euro climbed 0.4% to $1.2124.
– The British pound increased 0.3% to $1.3631.
– The Japanese yen weakened 0.2% to 103.89 per dollar.
Bonds
– The yield on 10-year Treasurys was little changed at 1.09%.
– The yield on two-year Treasuries slipped to 0.13%.
– Germany’s 10-year yield advanced one basis point to -0.526%.
Commodities
– West Texas Intermediate crude advanced 1.2% to $53.01 a barrel.
The Bt3.7-billion upgrade of Krabi airport is 50 per cent complete, according to airport authorities.
Construction of the third passenger terminal, an apron, and renovation of the two existing terminals is at the halfway point and expected to be completed in 2023, said Krabi airport deputy director general Somkiat Maneesathit.
The new terminal will double the airport’s capacity from 4 million to 8 million passengers per year in the southern holiday province.
Of the total Bt3.7 billion cost, Bt2.923 billion is for construction of the third terminal and renovation of the first and second terminals. The remainder is being used for the apron and related electrical system.
The Office of Small and Medium Enterprises Promotion (OSMEP) is planning to launch a special “Let’s Go Halves” scheme to help SMEs save on operating costs, OSMEP’s director-general Veerapong Malai said.
For instance, he said, the scheme can help co-pay fees charged for the inspection of export products, which in some cases goes as high as Bt10,000 per product, he said.
The office is discussing the matter with Deputy Prime Minister Supattanapong Punmeechaow and will table the plan before its board Wednesday. It will then put the matter forward to the Cabinet next month.
Cash handouts, co-payment scheme to boost Thai GDP by 1%: Minister
EconJan 20. 2021Finance Minister Arkhom Termpittayapaisith
By The Nation
The government’s “RaoChana” (WeWin) cash handout scheme and the first two phases of the “Khon La Khrueng” (Let’s Go Halves) co-payment scheme are expected to boost Thai GDP by 1 per cent, said Finance Minister Arkhom Termpittayapaisith.
The Cabinet on Tuesday approved the new WeWin scheme and another round of Let’s Go Halves, aiming to ease financial burdens on people hit by the new Covid-19 outbreak.
The minister said the WeWin scheme alone could boost GDP by 0.5 per cent.
The WeWin scheme will hand two monthly payments of Bt3,500 to the self-employed, farmers and welfare card holders.
People can register for the cash payments online from January 29 onward. About 31 million people will be eligible for the scheme, which will cost an estimated Bt217 billion.
The first and second phases of Let’s Go Halves began last October and December, respectively. The new round, which is for those who failed to register in the second phase, will run until March 31 and cover 50 per cent of bills for food, drinks and necessities up to Bt150 per day. The total subsidy per person is capped at Bt3,500.
The Stock Exchange of Thailand (SET) Index closed at 1,522.59 on Tuesday, up 12.46 points or 0.82 per cent. Total transactions amounted to Bt87.64 billion with an index high of 1,529.17 and a low of 1,518.66. The SET snapped a three-day run of losses that began last week on Thursday.
In Tuesday’s morning session, an analyst at Krungsri Securities forecast the day’s index would rebound to between 1,515 and 1,520 after China’s fourth-quarter GDP in 2020 rose by 6.5 per cent, accelerating from 4.9 per cent in the previous quarter.
“However, investors should beware of volatility due to the tight SET valuation and decline in foreign capital inflows,” he said, adding the index’s price-to-earnings ratio was 30 times.
The 10 stocks with the highest trade value today were PTT, CBG, KBANK, GPSC, BANPU, IVL, STGT, PTTEP, CPF and TASCO.
As of 4.30pm, the price of oil rose by US$0.05 or 0.10 per cent to $52.41 per barrel, while gold rose by $12.50 or 0.68 per cent to $1,842.40 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 28,633.46, up 391.25 points or 1.39 per cent.
China’s Shang Hai SE Composite Index closed at 3,566.38, down 29.84 points or 0.83 per cent, while Shenzhen SE Component Index closed at 15,003.98, down 265.29 points or 1.74 per cent.
Hong Kong’s Hang Seng Index closed at 29,642.28, up 779.51 points or 2.70 per cent.
South Korea’s KOSPI Index closed at 3,092.66, up 78.73 points or 2.61 per cent.
Taiwan’s TAIEX Index closed at 15,877.37, up 265.37 points or 1.70 per cent.
Finance Minister Arkhom Termpittayapaisith
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Finance Minister Arkhom Termpittayapaisith
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