By Syndication Washington Post, Bloomberg · Kamaron Leach
U.S. stocks rose for a second day in holiday-shortened trading as investors monitored the latest developments on the Congressional aid package, while the pound strengthened after a post-Brexit trade accord agreement was reached.
Technology and real estate shares led the S&P 500 led higher, with energy the only one of the benchmark index’s 11 sector groups to finish in the red. A scuffle over pandemic relief is set to run up against a federal funding deadline next week as Democrats side with President Donald Trump in his demand for $2,000 payments to most Americans. The dollar weakened and Treasury yields were little changed.
The pound strengthened for a second day and the Stoxx 600 Index edged higher after the U.K. clinched a historic trade deal with the European Union, averting the threat of an acrimonious breakup and laying the foundations for a new relationship with its biggest and nearest commercial partner.
Alibaba Group Holding’s U.S.-listed shares tumbled the most ever in intraday trading on concern over China’s inquiry into alleged monopolistic practices at the e-commerce company. Volumes were subdued in many countries on Thursday. Most financial markets will be closed Friday for Christmas Day.
“The market is in autopilot mode at least until the end of year, which has positive indications for a Santa Claus rally,” said Sam Stovall, Chief Investment Strategy at CFRA Research.
“Right now we have a lot of animal spirits surging into year end,” Michael Purves, founder and CEO at Tallbacken Capital Advisors, said on Bloomberg TV. “As constructive as I am on markets in the broader term, I do expect there will be a hangover of sorts to process this overextension some time later this winter.”
These are the main moves in markets:
Stocks
The S&P 500 Index rose 0.2% to 3,690.01 as of 1:07 p.m. EST, the largest advance in a week.
The Dow Jones industrial average increased 0.2% to 30,129.83.
The Nasdaq Composite Index rose 0.2% to 12,771.11.
The Stoxx Europe 600 Index climbed 0.1% to 395.98, the highest in a week.
Currencies
The Bloomberg Dollar Spot Index dipped 0.1% to 1,126.21.
The euro was little changed at $1.2183.
The British pound rose 0.3% to $1.3538, the strongest in a week.
The Japanese yen depreciated 0.1% to 103.68 per dollar, the weakest in more than a week.
Bonds
The yield on 10-year Treasuries fell two basis points to 0.92%, the largest drop in two weeks.
Germany’s 10-year yield gained five basis points to -0.55%, reaching the highest in more than three weeks on the first advance in a week and the biggest climb in more than six weeks.
Britain’s 10-year yield dipped three basis points to 0.257%.
Commodities
West Texas Intermediate crude climbed 0.2% to $48.22 a barrel.
The Business Development Department expects to see 64,000-66,000 newly registered companies next year, said deputy director-general Sorada Lertarpachit.
The estimate assumes that no significant unforeseen factors will arise.
The rate at which new companies are forming is on the rise as the economy moves into recovery, she confirmed.
However, the department is evaluating the impact of the latest Covid-19 outbreak on the rate of company formation, she added.
The number of new companies this year is expected to be between 63,000 and 64,000, down from 71,485 last year due to the impact of Covid-19.
The first 11 months saw 60,053 new companies registered, down 12 per cent. Their capital was Bt207.688 billion, down 32 per cent. The number of dissolved companies in the same period was 14,907, down 9 per cent, with capital of Bt75.133 billion, down 17 per cent.
A total of 4,479 business operators applied to set up companies in November, down 17 per cent from October, and with total registered capital of Bt15.599 billion. It was usual to see a relatively small number of applications for new businesses at the end of the year, Sorada said.
The government plans to revise key laws and regulations covering immigration, foreign business and other sectors next year in order to draw more foreign direct investment.
The revisions will also cover foreign workers, excise tax, city planning, biodiversity, the movie and video business, and energy sector including infrastructure and alternative energy.
The government aims to achieve at least 85 per cent of the revisions targeted under its “regulatory guillotine” scheme next year, according to a government source.
The Public Sector Development Commission has led the mission to make doing business in Thailand much easier than it is today.
Businesses and consumers are currently burdened with high costs from complying with these laws and related regulations, estimated to total Bt142 billion annually.
The Thailand Development Research Institute projects that the revisions of laws and regulations would lower annual costs by 55.2 per cent or Bt133 billion for consumers and 22.4 per cent or Bt9 billion for businesses.
The government is hoping the revisions will help lift Thailand in the World Bank’s “Ease of Doing Business” rankings from its current 21st place into the top 10.
Foreign and local businesses have long complained about cost burdens stemming from complying with Thai bureaucracy, but the government has been slow to deregulate. Foreign investors have pressed for “friendlier” laws on immigration, foreign business and tax.
Brokerage firms expect Airports of Thailand (AOT) to rise back into profit next year or the year after, despite its move to cut airports’ fixed monthly concession charges to soften the impact of Covid-19.
AOT informed the Stock Exchange of Thailand on Wednesday that it will cut six airports’ fixed monthly concession charges by 15-20 per cent from February 1, 2021 to January 31, 2022.
Suwat Wattanapornprom, an analyst at Asia Plus Securities, said the move would affect AOT’s performance in the short term.
He expects AOT to suffers losses of Bt2.7 billion with revenue of approximately Bt20 billion in fiscal year 2020-2021, before turning a profit of Bt1.7 billion on revenue of approximately Bt45 billion in 2021-2022.
“However, the Covid-19 outbreak is still pressuring AOT. If its share price drops, it would be an opportunity for long-term investment, since the company will benefit from distribution of Covid-19 vaccine in the middle of next year,” he said, adding that Asia Plus Securities had maintained its target price for AOT shares at Bt61.
Kitichan Sirisukarcha, senior vice president for research at CGS CIMB Securities, said AOT’s move and the declining number of domestic flights would have a limited impact on the company’s performance.
“The market has not factored in progress on Covid-19 vaccine, which is expected to be made widely available in the middle of next year. Hence, we expect the number of passengers to increase in the second half of next year,” he said.
“However, we expect AOT to turn from loss to profit in fiscal year 2022-2023, as foreign arrivals are not expected to rebound to pre-crisis levels until 2023.”
He added that CGS CIMB Securities had maintained its target price for AOT shares at Bt60, advising investors to buy when the price drops to Bt54-Bt55.
The 20 per cent concession reduction applies to Suvarnabhumi, Don Mueang, Phuket and Chiang Mai airports. The 15 per cent reduction applies at Hat Yai and Mae Fah Luang-Chiang Rai airports.
The Stock Exchange of Thailand (SET) Index closed at 1,451.52 on Thursday, up 35.50 points or 2.51 per cent. Total transactions amounted to Bt103.03 billion with an index high of 1,453.87 and a low of 1,409.75.
The index was buoyed by the first day of trading in Kerry Express (KEX) shares, as well as news that health authorities had not imposed a nationwide lockdown in response to the latest virus outbreak. The KEX share price shot up to Bt51.25 on Thursday, 83.04 per cent higher than its initial public offering (IPO) price of Bt28.
The 10 stocks with the highest trade value today were KEX, DELTA, KBANK, AEONTS, PTT, IVL, CPF, AOT, BANPU and CPALL.
As of 4.30pm, the price of oil dropped by US$0.12 or 0.25 per cent to $48 per barrel, while gold rose by $4.90 or 0.26 per cent, to $1,883 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 26,668.35, up 143.56 points or 0.54 per cent.
China’s Shang Hai SE Composite Index closed at 3,363.11, down 19.21 points or 0.57 per cent, while Shenzhen SE Component Index closed at 13,915.57, down 99.45 points or 0.71 per cent.
Hong Kong’s Hang Seng Index closed at 26,386.56, up 43.46 points or 0.16 per cent.
South Korea’s KOSPI Index closed at 2,806.86, up 47.04 points or 1.70 per cent.
Taiwan’s TAIEX Index closed at 14,280.28, up 57.19 points or 0.40 per cent.
Kerry Express (KEX) began its first day of trading on Thursday with shares going at Bt65 apiece, Bt37 or 132 per cent higher compared to its initial public offering (IPO) price of Bt28 per share.
KEX is Thailand’s leading parcel delivery brand which focuses on providing various types of services, such as consumer to consumer (C2C), business-to-consumer (B2C) and business-to-business (B2B). As of September 30, the company delivered over 1.2 million parcels per working day.
KEX has a paid-up capital of Bt870 million with a par value of Bt0.50 per share. The company offered 300 million ordinary shares to the public from December 8 to 18 at the price of Bt28 per share, with the aim of raising Bt8.4 billion.
The company’s market capitalisation at IPO price was Bt48.72 billion, while SCB Securities and Maybank Kim Eng Securities are financial advisers and underwriters.
KEX’s two major shareholders are KLN Logistics with 52.1 per cent and VGI with 19 per cent. The company has the policy of paying dividends of no less than 30 per cent of its net profit after deducting tax and other payments under the law to shareholders.
The price of gold rose by Bt100 per baht weight in morning trade on Thursday after falling by Bt50 per baht weight at close on Wednesday, the Gold Traders Association reported.
As of 9.30am, the buying price of a gold bar was Bt26,750 per baht weight and selling price Bt26,850, while gold ornaments cost Bt26,272.28 and Bt27,350, respectively.
At close on Wednesday, the buying price of a gold bar was Bt26,650 per baht weight and selling price Bt26,750, while gold ornaments cost Bt26,166.16 and Bt27,250, respectively.
The spot gold price moved to US$1,878 (Bt56,716) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February next year rose by $7.80 to $1,878.10 per ounce on Wednesday due to a weakening dollar and a decline in US economic data.
The Hong Kong gold price meanwhile rose by HK$40 to $17,310 (Bt67,413) per tael, the Chinese Gold and Silver Exchange Society reported.
The Stock Exchange of Thailand (SET) Index rose by 1.91 points, or 0.13 per cent, to 1,417.93 in the morning session on Thursday.
An analyst at Krungsri Securities expected the day’s index to fluctuate between 1,410 and 1,430 points amid hopes over an European Union-Britain trade deal, a US economic stimulus package and the rising oil price.
“However, we advise investors to keep an eye on the Centre for Covid-19 Situation Administration’s meeting today because the index would come under pressure if the centre imposes lockdown measures to contain the spread of Covid-19,” he said.
He recommended investors buy:
> Defensive stocks, such as Intuch and Advanc.
> TQM, BLA, STGT, AJ, PTL, Synex and Com7, which stand to benefit from the Covid-19 situation.
> PTTEP, PTTGC, Top and IVL, which benefit from a rising oil price, while their fourth-quarter performance is expected to improve.
The SET Index closed at 1,416.02 on Wednesday, down 8.37 points or 0.59 per cent. Total transactions amounted to Bt89.55 billion, with an index high of 1,440.52 points and a low of 1,414.21.
By Syndication Washington Post, Bloomberg · Kamaron Leach
U.S. stocks rose for the first time in four days as investors looked past President Donald Trump’s demand for changes to pandemic relief legislation. The pound gained as an outline of the post-Brexit trade deal was reached.
The S&P 500 was led higher by the energy and financial sectors, while real estate and technology shares underperformed. The Nasdaq Composite and Russell 2000 indexes set record highs. Trump is demanding that lawmakers increase the stimulus checks due to go out to most Americans to $2,000 from $600 in the same week that Congress passed the $900 billion bipartisan package.
“By and large the market has continually seemed to focus on the more positive bull cases around each macro event and last night’s political drama is no exception,” said Chris Larkin, managing director of E*Trade Financial’s trading and investing product. “We’re seeing the market choosing to see the cup half full, as it shrugs off the possibility of the stimulus bill failing, and instead viewing it as a catalyst for larger stimulus cash in the pockets of consumers.”
The dollar stayed lower after initial jobless claims came in better than expected. Personal income for November fell by 1.1%. Treasury yields rose.
European stocks rose as trade and transport links between the U.K. and its neighbors reopened and Brexit negotiators put the finishing touches to an accord, said officials, who spoke on the condition of anonymity. Travel firms and automakers led gains, with Daimler AG rising on a report the German carmaker is considering an initial public offering of its truck unit.
Investors are looking past the president’s comments to the promise of pandemic relief that will come sooner or later. House Speaker Nancy Pelosi, D-Calif., seized on Trump’s call for larger individual checks and said the House would try to pass this additional measure during a pro forma session on Thursday.
“He’s historically, as I believe, negotiating as he always does,” said Todd Morgan, Chairman and founding member of Bel Air Investment Advisers. “You have to look beyond the next few weeks with this president because I think good things are going to come straight ahead.”
Elsewhere, crude oil reversed an earlier decline. Gold snapped a three-day slide.
Here are the main moves in markets:
Stocks
The S&P 500 Index increased 0.1% to 3,690.01 as of 4:07 p.m. EST.
The Dow Jones industrial average advanced 0.4% to 30,129.83.
The Nasdaq Composite Index declined 0.3% to 12,771.11, the largest decrease in two weeks.
The Stoxx Europe 600 Index jumped 1.1% to 395.49.
The MSCI All-Country World Index climbed 0.4% to 636.07.
Currencies
The Bloomberg Dollar Spot Index fell 0.4% to 1,127.31, the biggest fall in more than a week.
The euro gained 0.2% to $1.2191.
The British pound surged 1% to $1.3498, the biggest jump in almost seven weeks.
The Japanese yen strengthened 0.1% to 103.53 per dollar.
Bonds
The yield on 10-year Treasuries increased three basis points to 0.94%, the biggest increase in almost three weeks.
Germany’s 10-year yield climbed five basis points to -0.55%, hitting the highest in three weeks with the first advance in a week and the largest surge in more than six weeks.
Britain’s 10-year yield jumped 10 basis points to 0.286%, the biggest surge in about nine months.
Commodities
West Texas Intermediate crude gained 2.2% to $48.04 a barrel, the largest rise in almost two weeks.
It has good bones, as the real estate agents would say. Sleeps six, or more. Upgraded bathroom. Gym. Indoor garden. Parking for as many as eight visitor vehicles. And you can’t beat the location – 240 miles high with superb views of Earth: Truly all the best low Earth orbit has to offer!
But after hosting a rotating cast of astronauts for more than 20 years straight, the International Space Station is showing its age – it sprung another tiny leak last month – and NASA is already shopping for a new spread for its astronauts.
The space agency is confident Congress and its international partners will agree to extend the station’s life beyond 2024, when it is currently set to expire. On Friday, the Senate passed a NASA authorization bill that would extend it to 2030. But space is harsh, the station is aging and at some point it will have to come down.
What comes next, though, isn’t certain.
Under President Donald Trump, NASA has been scrambling to return astronauts to the moon under an accelerated timeline. But the first big test the incoming Biden administration will face in space could very well be the future of the space station. If it’s retired without a backup, NASA would face an “existential challenge,” as one top space agency official put it, with no place for its astronauts to go.
There are several companies working to develop a commercial space station, looking at a range of options that vary: a modern version of the ISS, a station with modules that inflate like balloons, and one that would refurbish discarded rocket stages that are floating around in orbit.
But while those options show promise, they are still unproven and years from hitting the market.
As a result, NASA has been increasingly concerned it could have a gap in low Earth orbit that would be even more consequential than the ignominious period after the space shuttle fleet was retired that left the space agency with no way to launch its astronauts to space from U.S. soil. Instead, NASA was forced to rely on the Russians for rides to space, at a price that grew to as much as $90 million a seat, before Elon Musk’s SpaceX restored human spaceflight for NASA earlier this year.
Even if the station is extended, NASA needs to be working now on its replacement, officials said. It took years to get the ISS up and running. The concept was born in 1984, when President Ronald Reagan announced the United States would put a station, eventually dubbed Freedom, in orbit. But after different administrations and design changes, the first segments weren’t launched until 1998. Since then, NASA has invested more than $100 billion in the facility, which receives more than $3 billion annually from NASA.
Privately run stations would also need time to build their business cases, signing foreign governments as tenants, working with companies and universities that want to do research in space, and wealthy tourists who would pay millions of dollars to visit.
While NASA and the private sector work toward developing commercial habitats, China is building its own space station that it hopes to launch within a couple of years and is recruiting countries around the world as partners. The United States would not be one of them, however, since NASA is effectively barred by law from partnering with China in space.
“I think it would be a tragedy if, after all of this time and all of this effort, we were to abandon low Earth orbit and cede that territory,” NASA administrator Jim Bridenstine told a Senate panel earlier this year.
The ISS still does have some good years left, officials said. “We’re good from an engineering standpoint,” Joel Montalbano, NASA’s space station program manager, said in an interview. “We’re cleared through 2028.”
Boeing, which is paid $225 million per year as the prime contractor supporting space station operations, said it could stay in orbit for even longer.
“The ISS is incredibly healthy, with life capability well beyond 2030,” said John Mulholland, Boeing’s ISS program manager. He said the U.S. and Russia recently completed a life extension study “and all the hardware has been cleared to a minimum of 2030. That’s a real testament to the design and the maintenance that’s been done on it.”
Recently, the station got new lithium-ion batteries that “are less than half the size of the original batteries and produce twice the power,” Mulholland said. The power upgrade also doubled the speed at which the station’s crew can send data from science experiments back to Earth.
Over the years, the station’s water recovery system has improved to the point where today, 95% of the water used for drinking and cooking is recycled, Montalbano said. The communications systems have also been upgraded, as have life support systems like carbon dioxide removal.
Still, like a house that needs repairs, things break. Since a leaky roof could have dire consequences in space, and no plumbers or electricians are going to make a house call, astronauts are trained to repair the toilet or plug leaks. But even a tiny leak hissing air into the vacuum of space is a threat, and astronauts spent weeks recently searching for one in the Russian segment of the station before patching it. It was tiny: “Think of the size of two grains of salt is what we had to find,” Montalbano said.
The Senate’s vote Friday gave a significant boost toward extending the station, though not as of yet, the money required to do so. Many in the space industry think the extension would be supported by the Biden administration and the House, where a bill that would extend it to 2028 has been introduced. It’s unclear, though, whether Russia would want to continue, and getting the station’s other partners on board would take time.
After the Commerce Department targeted Russian firms because of ties with the country’s military, the head of the Russian space agency earlier this month lashed out and said the move would threaten relations between the U.S. and Russia in space: “These sanctions are harmful, because they will create additional obstacles and irritations in such an important cooperation between Russians and Americans in space, in particular, on the ISS,” Dmitry Rogozin wrote on Twitter.
Wary of a gap, Bridenstine has increasingly been sounding the alarm, urging Congress to fully fund its requests to build a commercial presence in Earth orbit that would include private stations.
Last year, NASA requested $150 million as part of its plan, but Congress granted just a tenth of that. For the fiscal 2021 budget, NASA requested the same amount but will receive just $17 billion, sparking a new round of warnings: “ISS won’t last forever & incentivizing the private sector to begin follow-on capabilities are needed now,” said Lori Garver, who served as NASA deputy administrator in the Obama administration. “This concept isn’t hard, have we learned nothing in the last 10 years?”
“It’s critically important for the United States to have access to low Earth orbit with humans so they can live and work and do science and discovery in the microgravity of space,” Bridenstine said in an interview. “That should be a national priority. There is a reality that we all have to accept, which is at some point in the future we have to focus on what comes after the ISS.”
Some have been critical of the Trump administration for not doing more to prevent a gap. While the White House has been focused on returning astronauts to the moon, the future of the space station has received relatively little attention, said Jeffrey Manber, the CEO of NanoRacks, which is seeking to build its own small space stations.
“What troubles me is this administration is walking out the door having done very little to prevent a space station gap,” he said.
After the space shuttle, NASA decided it did not need to own and operate its own rockets and spacecraft but could instead rely on the private sector to ferry its astronauts to space. In 2014, NASA awarded contracts to SpaceX and Boeing to develop spacecraft to fly astronauts. It took six years for SpaceX to have its first flight with humans. Boeing has yet to fly its first crewed mission.
Developing a private space station could take just as long, industry officials said, which is why NASA and the private sector need to get moving now.
“It’s very apparent to everybody that when the ISS comes to the end of its life, we’re not going to replace it with another $100 billion station,” Bridenstine said. “The transition needs to be to commercial space stations. Not just one, but multiple.”
There are several companies NASA is hoping will help it continue the U.S.’s presence in low Earth orbit.
Axiom Space, a Houston-based company, is working toward building a commercial space station that would be a modern version of the ISS with some key upgrades.
“When you look at the shell you go, ‘Wow, that looks just like the same old space station.’ But after that, pretty much everything will be dramatically different,” said Mike Suffredini, Axiom’s president and CEO.
The ISS has some key components located on the outside of its station, meaning astronauts have to perform risky spacewalks to, say, swap out batteries. On the Axiom station, those would all be located inside. It would also have “the largest window observatory ever constructed for space,” and an interior designed by French architect Philippe Starck.
The company has a contract with NASA to attach at least one privately developed module to the ISS by 2024, which could potentially allow the crew capacity on the station to grow.
Suffredini, who previously served as the ISS program manager for NASA, said he is not concerned about a gap. Rather, he said, he’s more concerned about ensuring a transition from a government station to a commercial one that gives his potential customers confidence.
“I’m more concerned that we drive ourselves to keep ISS on orbit too long,” he said. “The negative impact is investors start to worry about is ISS ever going to leave?”
The Sierra Nevada Corp. also is working to build a commercial station. But instead of a station with metal structures, it would be made of a Kevlar-like material that would inflate, making it easier to get more space station volume into orbit with fewer rocket launches.
The company says it could get its first modules into space within five or six years and is confident that there will be enough demand to make it financially feasible.
“We’re looking forward at the projected market out there, and it just looks incredibly bright,” said Janet Kavandi, a former astronaut who serves as the company’s senior vice president for space systems. “There’s so much interest in space right now, in the commercialization of space and the potential out there for everything from manufacturing to tourism to research laboratories to observatories.”
NanoRacks is also interested in developing commercial stations. But instead of launching them from Earth, the company wants to take discarded rocket stages that are already in orbit and transform them into stations designed for research.
“We need to make the investment now to understand how we can develop cost-efficient free fliers and, just as important, to continue to grow the market for customers,” Manber said.
Blue Origin, Jeff Bezos’s space company, is also interested in building habitats, and recently posted a job opening for an “Orbital Habitat Formulation Lead.” (Bezos owns The Washington Post.)
“To develop Blue Origin’s vision of millions of people living and working in space, humanity will require places for them to live and work: space destination systems in which value-creating economic activity can occur,” it read. The space station in low Earth orbit (LEO) would go beyond the International Space Station to support “a robust LEO economy” and be “fundamentally different from the ‘exploration’ habitats designed for small, professional trained crews in deep space.”
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