The Stock Exchange of Thailand (SET) Index rose by 17.64 points, or 1.18 per cent, to 1,510 in the morning session on Thursday.
An analyst at Krungsri Securities predicted that the day’s index would rise to between 1,500 and 1,510 points amid hopes over fresh US economic stimulus measures after the Democrats’ victory in Georgia’s Senate election, as well as the rising oil price.
“However, investors should beware of mass sell-offs of shares in response to technical signals,” he said.
He recommended investors buy:
> KBank, SCB, BBL and BLA. which benefit from the rising US bond yield.
> PTTEP, PTTGC, Top and IVL, which benefit from the rising oil price while their fourth-quarter performance is expected to improve.
> PSL, TTA and RCL, which would benefit from the rise in freight rates.
The SET Index closed at 1,492.36 on Wednesday, down 14.29 points or 0.95 per cent. Total transactions amounted to Bt142.32 billion, with an index high of 1,514.89 points and a low of 1,485.79.
The price of gold slumped by Bt450 per baht weight in morning trade on Thursday, the Gold Traders Association reported.
As of 9.24am, the buying price of a gold bar was Bt27,100 per baht weight and selling price Bt27,200, while gold ornaments cost Bt26,605.80 and Bt27,700, respectively.
At close on Wednesday, the buying price of a gold bar was Bt27,550 per baht weight and selling price Bt27,650, while gold ornaments cost Bt27,060.60 and Bt28,150, respectively.
The spot gold price moved to US$1,917 (Bt57,390) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February dropped by $45.80 to $1,908.60 per ounce on Wednesday due to the over 1 per cent rise in the US ten-year bond yield and mass sell-offs for profit.
The Hong Kong gold price meanwhile dropped sharply by HK$270 to $17,750 (Bt68,541) per tael, the Chinese Gold and Silver Exchange Society reported.
The Dow Jones industrial average capped a volatile session Wednesday with a record high, as investors kept an eye on growing turmoil at the U.S. Capitol and tracked election results emerging out of Georgia.
The blue chip index seesawed throughout the trading day, dipping at the opening bell and then spiking nearly 600 points before closing with a 437-point, or 1.4%, gain. The broader S&P 500 added 21 points, or nearly 0.6%, while the tech-heavy Nasdaq 100 shed about 78 points, or 0.6%.
The gains came even as thousands of President Donald Trump’s supporters stormed the Capitol just as Congress was set to confirm that President-elect Joe Biden won the election. Trump continues to dispute the election results, without evidence, and had encouraged his supporters to attend the rallies. One person was shot during the melee and the D.C. National Guard was activated.
Investors spent much of the day waiting for final results out of Georgia’s Senate runoff election. The Rev. Raphael Warnock, D, won his race against Republican Sen. Kelly Loeffler. Democrat Jon Ossoff defeated the GOP incumbent, Sen. David Perdue, according to late afternoon projections.
The runoff was triggered after no candidate captured at least 50% of the vote in November, putting control of the Senate at play. The gain of two seats gives Vice President-elect Kamala Harris the tie-breaking vote.
Many investors worry that a Democratic-controlled Senate could ease the path for the incoming Biden administration to usher in tax increases and regulatory changes. But flipping the chamber also increases the odds of more fiscal stimulus, boosting companies that have been hard hit by the pandemic and the broader economy.
Ed Moya, senior market analyst at OANDA, said the session choppiness unfolded as investors grappled with still-rising coronavirus infections and confusion over the final Georgia runoff election results.
“First, there was still some confusion as far as whether or not Republicans still had a chance to win. There was a concern that these overseas votes and military ballots would take a few days to come in,” he said. “But as it became clear that – okay, we had Ossoff give his, well premature, but – victory speech, and as more political insiders stated that this is over, I think we saw more confidence pile into this blue wave trade.”
Moya said Wall Street analysts – himself included – were surprised by the preliminary results that, with Warnock’s projected win and Ossoff’s lead. So was Michael Mussio, president of FBB Capital Partners.
“I definitely think the mantra in the base case is divided government, and that definitely seems to be waning,” Mussio said. “Now we’re kind of rallying a bit, saying, there’s likely to be more stimulus behind the most recent package because of the ability to move that through.”
Financial stocks soared, with Wells Fargo jumping nearly 7.1%, Bank of America growing nearly 6.3%, and Goldman Sachs up nearly 5.4%. Mussio called the day of gains “a little bit goofy,” because of what a Democrat-controlled Senate might mean for the banking sector.
Chris Rupkey, MUFG chief financial adviser, advised investors to focus on the future of the economy – and what the Biden administration and new legislators will do to address persistent job losses during the pandemic and rising coronavirus cases. More than 359,000 Americans have died of covid-19, and nearly 21.3 million have been infected.
“A new government is returning to Washington and legislators are going to have their hands full as economic weakness seems to have returned,” Rupkey said. “The path of the economy depends on the course of the pandemic and the renewed virus outbreak has thrown the economy for a loop which dashes the hopes of nearly 10 million Americans who lost their jobs after the pandemic hit. The worst economic downturn since the Great Depression isn’t over yet.”
Energy stocks soared Wednesday, Moya said, because investors expect the new Congress to support the Biden administration’s clean energy initiatives, which will be positive in the long-term for oil companies.
Oil markets also rallied Wednesday, though they are more focused on the pandemic and market fundamentals than the election. Brent crude, the international oil benchmark, leveled up nearly 0.8% to $54 a barrel. West Texas Intermediate crude, the U.S. benchmark, ticked up nearly 0.9%, to $50.37 a barrel.
The yield on the 10-year U.S. Treasury note jumped 9.1%. Bond yields move inversely to prices. Gold, another safe haven, slid 1.8% to $1,919.60 per ounce. Bitcoin, meanwhile, continues to skyrocket: it soared past $36,000 on Wednesday just three weeks after hitting $20,000 for the first time.
“Bonds aren’t cheap. Stocks certainly aren’t cheap,” Mussio said. “Seeing things like bitcoin through the stratosphere, I think we’re definitely seeing some lofty parts of the market and investors should be doing their due diligence.”
Looking ahead, Mussio said, he expects the next big market influencer to be earnings season in the next few weeks.
“Two months after the election, we don’t have any elections in front of us for a while,” Mussio said. “I think part of that positive move is knowing that stuff is kind of behind us at least for the next year plus until midterms.”
By Syndication Washington Post, Bloomberg · Rita Nazareth, Claire Ballentine
U.S. stocks stabilized in the green, though remained well off session highs after protesters surged into the U.S. Capitol, forcing a lockdown that interrupted certification of the presidential election.
The S&P 500 trimmed its advance to 0.6% at the close of trading in New York, after rallying as much as 1.5% earlier Wednesday. Equities had been on track for a record, buoyed by speculation that a Democratic control of Congress could unleash a torrent of spending to revive growth. That sparked a reflation trade, with investors pouring into small caps and banks, companies that benefit from an economic rebound. Tech shares lagged behind.
Democrats will take control of the U.S. Senate for the first time in six years, NBC and CBS said late in the day. Investors’ buoyant mood was pierced, but not sunk, when Vice President Mike Pence left the floor of Congress as hundreds of protesters swarmed past barricades surrounding the building where lawmakers were debating Joe Biden’s victory in the electoral college.
“Apparently, elevated investor sentiment knows no bounds,” said Adam Phillips, director of portfolio strategy at EP Wealth Advisors. “Obviously, the reflation trade stemming from last night’s election results is driving the markets, but it takes a special set of blinders to ignore what we are seeing in real-time.”
Democrats claimed one of the two Senate seats contested in Georgia and led in the other tight race. Two wins would give Biden’s party control of Congress and smooth the path for some of his spending policies. That’s fueled bets that increased stimulus will boost the economy and spark inflation. The 10-year Treasury yield climbed past 1% for the first time since March.
“The growth-into-value rotation may be reinforced after the results of the Georgia Senate election amid the prospect of a higher fiscal stimulus bill and steeper yield curve, which would benefit banks and other non-tech companies,” David Bahnsen, chief investment officer of the Bahnsen Group in Newport Beach, Calif., wrote in a note to clients.
Congress passed at year’s end a $900 billion spending deal to bolster an economy showing signs of slowing as the raging virus prompts stricter lockdowns across the country. The number of employees at U.S. businesses unexpectedly declined in December for the first time since April, underscoring the ongoing labor-market fallout from the pandemic. The figures preceded the monthly jobs report on Friday, which is projected to show weaker payroll growth.
U.S. 10-year breakevens — a market gauge of inflation expectations over the next decade — topped 2% this week for the first time since 2018, having gained in each of the last three months. While the pandemic is still raging with the rollout of vaccines in the early stages, the risk is that further signs of inflationary pressure could start prompting bets on Fed rate hikes.
For Matt Miskin, co-chief investment strategist at John Hancock Investment Management, the ball will be in the Fed’s court next and how policymakers will react to this evolving political backdrop.
“They have been wanting more fiscal support, well now they have it, and it is coming with a cost — higher interest rates based on Treasury yields rising,” Miskin noted. “We will see what the Fed’s pain threshold is for higher Treasury yields in the first half of 2021. The tug-of-war between monetary and fiscal policy will be key to markets. While the fiscal side is looking more promising based on the results today, monetary policy may take a step back.”
These are some of the main moves in markets:
Stocks
– The Stoxx Europe 600 Index jumped 1.4%.
– The MSCI Asia Pacific Index declined 0.4%.
Currencies
– The Bloomberg Dollar Spot Index fell 0.1%.
– The euro advanced 0.2% to $1.2324.
– The Japanese yen weakened 0.3% to 103.04 per dollar.
Bonds
– The yield on 10-year Treasurys rose eight basis points to 1.03%.
– Germany’s 10-year yield jumped six basis points to -0.52%.
– Britain’s 10-year yield rose three basis points to 0.243%.
Commodities
– West Texas Intermediate crude advanced 0.9% to $50.39 a barrel.
By Syndication Washington Post, Bloomberg · Dave Liedtka, Eric Lam
Bitcoin jumped to another all-time high on Wednesday as extreme swings continued to buffet the world’s largest cryptocurrency.
The famously volatile digital coin advanced as much as 6% to $35,842, surpassing the previous high set Jan. 3, and was trading at $34,988 as of 6:47 a.m. in New York. It had plunged as much as 17% on Monday. Bitcoin quadrupled in 2020.
A range of factors have been cited for bitcoin’s ascent, showing how hard it is to pinpoint the proximate cause for the latest bout of volatility. Some traders pointed to a JPMorgan Chase & Co. long-term price forecast of as much as $146,000, while others cited the overall risk-on mood in global financial markets.
“Clear bull market, and we’re not getting 30% to 40% drops like in 2017,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “The market is more mature with bigger buyers. Keep in mind though that we’re in a parabolic phase and they do top out.”
While the latest price swings may be reminiscent of past boom and bust cycles, bitcoin’s ability to reverse its slide so quickly this week suggests institutional investors are not abandoning the space, said Matt Long, head of distribution and prime products with crypto brokerage OSL in Hong Kong.
“Monday’s dip was instructive as institutional investors used the opportunity to buy in,” he said. “Institutional investment is firmly in the digital asset sector, and potentially accelerating.”
More institutions and noted investors, from Paul Tudor Jones to Scott Minerd and Stan Druckenmiller, have either started allocating funds into bitcoin or have said they’re open to doing so.
“The chase higher is back on based on the notion that bigger main street investors are interested in building longer-term positions,” said Stephen Innes, chief global market strategist with Axi. “This is all about the new age embrace of blockchain technology to which bitcoin is so uniquely intertwined.”
Some argue that the cryptocurrency offers a hedge against dollar weakness and inflation risk in a world awash with fiscal and monetary stimulus.
“If inflation picks up, or even if it doesn’t, and more companies decide to diversify some small portion of their cash balances into Bitcoin instead of cash, then the current relative trickle into bitcoin would become a torrent,” Bill Miller of Miller Value Partners wrote in a blog post.
But others say retail investors and trend-following quant funds are pumping up an unsustainable bubble.
“Bitcoin is better at being gold than gold is at being gold,” Anthony Scaramucci, founder and managing partner of SkyBridge Capital, said in an interview Tuesday. The firm is the latest to get on the bitcoin bandwagon, launching a crypto-centric fund this week.
The Finance Ministry has delayed the new land appraisal price base for another year, said Treasury Department director general Yuttana Yimgarund on Wednesday.
The ministry’s permanent secretary signed the order to suspend the 2020-2023 price base in late December, said Yuttana. This means the department will adopt the 2016-2019 land appraisal price this year.
The 2020-2023 benchmark was originally slated to take effect in January 2020, before the Covic-19 pandemic hit the economy.
Meanwhile, the department’s deputy director general Wilawan Veerakun said that the government is expected to extend the reduction of land and construction tax for landowners for another year, but might adjust the size of the cut.
Minister pushes for final link in U-Tapao Airport motorway
EconJan 07. 2021Transport Minister Saksayam Chidchob
By The Nation
Transport Minister Saksayam Chidchob has given the Highways Department until the end of this year to design the 3.5-kilometre stretch to link the Pattaya-Map Ta Phut motorway extension to U-Tapao Airport in Rayong province.
The department must also prepare for land reclamation and construction of the project next year, he added.
The airport is targeting 60 million passengers per year after its pending upgrade to serve the Eastern Economic Corridor.
The motorway link project will reportedly cost around Bt40 million for the study plus Bt4.2 billion for construction.
Most analysts and fund managers expect the Stock Exchange of Thailand (SET) Index to hit 1,559 this year, up 110 points from 1,449 at the end of last year.
The findings come from a recent survey conducted by the Investment Analyst Association (IAA).
Those surveyed also expect the SET to range between a high of 1,631 and a low of 1,338, and forecast this year’s earning-per-share (EPS) growth at 40.77 per cent.
Thai stocks remain attractive this year as the index would not the face high volatility of last year, said IAA secretary-general Sombat Narawutthichai.
Positive sentiment for the SET came from central banks’ quantitative easing, foreign fund flows, the global economic recovery and low policy rate, he said, while downside pressure came from the Covid-19 outbreak, and political and economic developments both domestic and overseas.
“However, many analysts said they are not worried about the Covid-19 situation, as many countries have started vaccinating [their populations],” he said.
“Meanwhile, they [analysts] expected Thailand’s gross domestic product this year to stand at 3.74 per cent.”
Analysts and fund managers urged the Thai government to launch more stimulus measures, accelerate infrastructure investment, promote domestic tourism, and mitigate the Covid-19 impact on businesses.
They also picked five stocks with good fundamentals and EPS growth:
1. Advanced Info Service (ADVANC), which they said had benefited from work-from-home trends and would generate dividends at about 4.11 per cent.
2. Bangkok Dusit Medical Services (BDMS) – profits at Thailand’s largest private hospital group are likely to recover, while it would benefit from the country’s ageing society.
3. CP All (CPALL), which had benefited from government measures to stimulate consumption.
4. Kasikorn Bank (KBANK), which had benefited from the high interest margin as well as strong risk management.
5. PTT Global Chemical (PTTGC), which should benefit from the economic recovery and its cost advantage.
“Analysts also advised investors to keep 12.17 per cent in cash and invest 16.30 per cent in fixed income funds, 28.43 per cent in Thai stocks, 28.39 per cent in foreign stocks, 7.85 per cent in gold, and 6.85 per cent in property funds or Real Estate Investment Trusts [REITs],” he added.
The government is expected to announce a fresh economic stimulus package in the next couple of weeks to mitigate the impact of the second wave of Covid-19, a senior official of the National Economic and Social Development Council (NESDC) said.
NESDC deputy secretary-general Danucha Pichayanan said that the concerned economic agencies were jointly drawing up the new packages. They need a couple of weeks to finish evaluating the impact of tighter controls in 28 “red-coded” provinces and other related measures to curb the outbreak, as well as related economic indicators, he said.
Of the total Bt1-trillion borrowing last year to deal with the fallout of the Covid-19 outbreak, the government still has a budget of Bt200 billion earmarked for remedying those affected by the outbreak and another Bt400 billion allocated for economic revival. It will evaluate if it needs to add the Bt400 billion to the Bt200 billion for alleviating the problems of people impacted by Covid-19.
The Stock Exchange of Thailand (SET) Index closed at 1,492.36 on Wednesday, down 14.29 points or 0.95 per cent. Total transactions amounted to Bt142.32 billion with an index high of 1,514.89 and a low of 1,485.79.
In the morning session, an analyst at Krungsri Securities forecast the day’s index to fluctuate between 1,490 and 1,520 as the rising oil price and Thailand’s only-partial lockdown buoyed investment sentiment.
“However, investors should beware of market volatility after the SET imposed cash balance regulations on Delta Electronics shares,” he said.
The 10 stocks with the highest trade value today were EA, KCE, IRPC, GPSC, IVL, KBANK, PTTEP, PTT, BANPU and HANA.
As of 4.30pm, the price of oil dropped by US$0.03 or 0.06 per cent to $49.90 per barrel, while gold rose by $3.30 or 0.17 per cent, to $1,957.70 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 27,055.94, down 102.69 points or 0.38 per cent.
China’s Shang Hai SE Composite Index closed at 3,550.88, up 22.20 points or 0.63 per cent, while Shenzhen SE Component Index closed at 15,187.61, up 40.04 points or 0.26 per cent.
Hong Kong’s Hang Seng Index closed at 27,692.30, up 42.44 points or 0.15 per cent.
South Korea’s KOSPI Index closed at 2,968.21, down 22.36 points or 0.75 per cent.
Taiwan’s TAIEX Index closed at 14,983.13, down 16.90 points or 0.11 per cent.
Transport Minister Saksayam Chidchob
NESDC deputy secretary-general Danucha Pichayanan
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