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Stocks extend slide amid lingering virus concern (nationthailand.com)

Stocks extend slide amid lingering virus concern

EconDec 23. 2020

By Syndication Washington Post, Bloomberg · Kamaron Leach, Cecile Gutscher

U.S. stocks fell for a third day as optimism over a covid-19 relief bill was tempered by the emergence of a new variant of the virus and a slew of lockdowns and travel curbs to contain it. The dollar advanced and Treasuries gained.

The benchmark S&P 500 fluctuated between gains and losses before closing lower, with consumer services and energy the biggest sector decliners. The Nasdaq Composite and Russell 2000 set record highs in what is a holiday shortened week. U.S. lawmakers cleared a $2.3 trillion year-end spending bill and stimulus package. President-elect Joe Biden warned the “darkest days” of the pandemic were still to come and called on Congress to be ready early next year to produce another stimulus package.

“Sometimes you get exaggerated moves in stocks due to lack of liquidity,” said Jonathan Boyar, managing director at BoyarValue Group.

Amgen Inc. was among the biggest losers in the Dow Jones industrial average, falling after a study showed an experimental drug failed to cut asthma patients’ dependence on steroids. Apple Inc. paced the gain in the Nasdaq after a report said the company is planning to make a battery-powered self-driving car as soon as 2024. Tesla Inc. fell for a second day.

In Europe, stocks rebounded from their steepest slump in almost two months Monday, with all industry groups in the green. British Airways owner IAG SA surged more than 5% as travel shares bounced back. Crude oil edged lower for a second day.

The global stock rally is looking increasingly fragile after equities touched a record high last week, as lockdowns and rising virus cases threaten to overshadow U.S. pandemic relief and the initial rollout of vaccines. The bill passed by Congress on Monday represents the second-biggest economic rescue package in American history.

“The agreed fiscal relief package will undoubtedly help mitigate some of the negatives but unfortunately, it won’t be able to fully offset the effects of people staying at home as many businesses face tighter restrictions or are even forced to close,” according to James Knightley, chief international economist at ING Groep.

In the U.K., where the virus variant has taken hold, a full lockdown came into force in London and southeast England. Europe and regions from Canada to Hong Kong have suspended travel links to the island nation, piling pressure onto the government as it tries to salvage a free-trade agreement with the European Union.

The bloc rebuffed Prime Minister Boris Johnson’s latest concessions on fishing rights, keeping the pound lower.

These are the main moves in markets:

Stocks

The S&P 500 Index decreased 0.2% to 3,687.27 as of 4:02 p.m. EST, the lowest in more than a week.

The Dow Jones industrial average sank 0.7% to 30,015.51, the lowest in more than a week on the biggest dip in more than three weeks.

The Nasdaq Composite Index increased 0.5% to 12,807.92, the highest on record.

The Stoxx Europe 600 Index surged 1.2% to 391.25, the biggest jump in five weeks.

Currencies

The Bloomberg Dollar Spot Index jumped 0.6% to 1,132.18, the highest in more than a week on the largest climb in almost eight weeks.

The euro sank 0.7% to $1.2162, the weakest in a week on the biggest dip in more than four months.

The British pound fell 0.7% to $1.3368, the weakest in more than a week on the largest drop in more than a week.

The Japanese yen depreciated 0.3% to 103.66 per dollar, the weakest in a week on the biggest dip in more than two weeks.

Bonds

The yield on 10-year Treasuries declined two basis points to 0.92%, the largest drop in more than a week.

Germany’s 10-year yield declined two basis points to -0.60%, the lowest in a week on the biggest fall in more than a week.

Britain’s 10-year yield declined two basis points to 0.183%, the lowest in more than a week.

Commodities

West Texas Intermediate crude dipped 2.1% to $46.94 a barrel, the lowest in more than a week.

Gold depreciated 0.9% to $1,860.77 an ounce, the weakest in a week on the largest dip in almost two weeks.

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Thailand to run fiscal deficit until 2025 (nationthailand.com)

Thailand to run fiscal deficit until 2025

EconDec 23. 2020Government spokesman Anucha Burapachaisri 

By The Nation

Thailand plans to run a fiscal deficit until 2025, to combat projected low tax revenue from low economic growth, while targeting inflation of 1 to 3 per cent next year.

The Cabinet on Tuesday gave the nod to the inflation target set by the Finance Ministry and Bank of Thailand’s Monetary Policy Committee (MPC), said government spokesman Anucha Burapachaisri.

The target was set in line with economic conditions including inflation dynamics, Thailand’s ageing society, fast-changing technology, and uncertainty caused by the Covid-19 pandemic.

The MPC has retained its priority to support economic recovery together with maintaining stability of prices and a sound financial system, he said.

The Cabinet also approved a medium-term government spending plan for 2022 to 2025, proposed by the Finance Ministry, said Anucha.

The Finance Ministry projects the Thai economy will expand in a range of 2.7 to 4.2 per cent over that four-year period. Thailand has experienced slow economic growth of 3 to 4 per cent in recent years, while the Covid-19 crisis is forecast to bring a severe economic contraction this year.

The Finance Ministry’s medium-term spending plan exceeds projected revenue as government spending remains an important factor in driving the economy, given low tax revenue.

For fiscal year 2022, the government plans to spend Bt3.1 trillion against projected revenue of Bt2.4 trillion, resulting in budget deficit of Bt700 billion. 

For 2023, spending will be Bt3.2 trillion against Bt2.49 trillion revenue, while for 2024 it is Bt3.31 trillion against 2.62 trillion revenue, and in 2025, Bt3.42 trillion against revenue of 2.75 trillion. Thailand has run a fiscal deficit since the 1997 Asian financial crisis. 

Projected key sources of tax revenue between 2022 and 2025 include VAT, e-service tax collected from international tech giants, licensing of frequencies for telecom operators, and production sharing contracts from oil and gas exploration firms.

The ministry also projects a rise in public debt as the government will need to borrow more to finance the deficit.

Public debt this year has hit Bt7.85 trillion, accounting for 49.3 per cent of gross domestic product (GDP).

Public debt to GDP is projected to rise to 56 per cent next year, 57.6 per cent in 2022, 58.6 per cent in 2023, 59 per cent in 2024 and 58.7 per cent in 2025.

Historically, the Finance Ministry has set a limit of 60 per cent on public debt-to-GDP, in order to ensure fiscal sustainability.

“For the short and medium term, the fiscal plan aims to increase both revenue and spending in order to brace for future risks. While for long-term planning, the budget deficit will be narrowed to achieve fiscal balance eventually,” said Anucha.

Slower economic growth and the Covid-19 fallout has contributed to rising public debt in recent years.

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SET rebounds from Covid shock (nationthailand.com)

SET rebounds from Covid shock

EconDec 22. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index closed at 1,424.39 on Tuesday, up 22.61 points or 1.61 per cent. Total transactions amounted to Bt87.82 billion with an index high of 1,428.11 and a low of 1,388.23.

The SET closed in positive territory after investors bought back shares following the sharp fall of more than 5 per cent during Monday trading.

In the morning session on Tuesday, an analyst at Krungsri Securities expected the day’s index to fall to 1,390 points as fresh Covid-19 outbreaks in Thailand and Britain spur negative sentiment for the economy and investor confidence.

“The index will also be under pressure from the falling oil price,” he said.

The 10 stocks with the highest trade value today were PTT, KBANK, BANPU, ADVANC, CPALL, IVL, PTTEP, BBL, CPF and IRPC.

As of 4.30pm, the price of oil dropped by US$0.96 or 2.00 per cent to $47.01 per barrel, while gold dropped by $5.00 or 0.27 per cent, to $1,877.80 per ounce.

Other Asian indices were mixed:

Japan’s Nikkei Index closed at 26,436.39, down 278.03 points or 1.04 per cent.

China’s Shang Hai SE Composite Index closed at 3,356.78, down 63.79 points or 1.86 per cent, while Shenzhen SE Component Index closed at 13,882.30, down 252.55 points or 1.79 per cent.

Hong Kong’s Hang Seng Index closed at 26,119.25, down 187.43 points or 0.71 per cent.

South Korea’s KOSPI Index closed at 2,733.68, down 44.97 points or 1.62 per cent.

Taiwan’s TAIEX Index closed at 14,177.46, down 207.50 points or 1.44 per cent.

Singapore’s Straits Times Index closed at 2,823.79, down 22.73 points or 0.80 per cent.

Vietnam’s Ho Chi Minh Stock Index closed at 1,083.45, up 2.37 points or 0.22 per cent.

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Stock picks for investors amid the Covid-19 crisis (nationthailand.com)

Stock picks for investors amid the Covid-19 crisis

EconDec 22. 2020

By The Nation

Brokerage firms have recommended select stocks for investment amid the new Covid-19 wave.

Yuanta Securities strategist Natapon Khamthakrue advised buying construction company shares, such as Sino-Thai Engineering and Construction (STEC) and CH-Karnchang (CK) as they have limited downside and benefit from the government’s move to stimulate domestic investment.

“Also, we advise buying telecommunication and energy shares, which have been able to escape the Covid-19 impact, such as Advanced Info Services [ADVANC], PTT and PTT Global Chemical [PTTGC],” he said.

He added that bank shares, such as Kasikornbank (KBANK) would benefit from positive news of a Covid-19 vaccine next year.

Kasikorn Securities senior vice president Sorrabhol Virameteekul expected the new Covid-19 wave to cause uncertainty among investors in the short term as the government would be able to contain the spread within two months.

He advised buying non-bank and logistics stocks which are able to escape the Covid-19 impact, such as AEON Thana Sinsap (AEONTS), JMT Network Services (JMT), Srisawad Corporation (SAWAD), Precious Shipping (PSL) and RCL.

“Also, we advise buying Bangkok Expressway and Metro [BEM], which has limited downside and benefits from positive news of a Covid-19 vaccine,” he said.

Bualuang Securities director of individual customer research, Wikij Tirawannarat, advised buying shares with growth potential at cheap price, such as Bangkok Commercial Asset Management (BAM), JMT, Chayo Group (CHAYO), Carabao Group (CBG) and Eastern Commercial Leasing (ECL).

Globlex Securities analyst Nuttawut Wongyaowarak advised buying shares which benefit from the Covid-19 outbreak, such as Sri Trang Gloves (STGT) and TQM Corporation (TQM).

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SET comes under pressure from Covid-19 situation in Thailand and Britain (nationthailand.com)

SET comes under pressure from Covid-19 situation in Thailand and Britain

EconDec 22. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index fell by 7.33 points, or 0.52 per cent, to 1,394.45 in the morning session on Tuesday.

An analyst at Krungsri Securities expected the index on Tuesday to fall to 1,390 points due to the Covid-19 situation in Thailand and Britain, resulting in negative sentiment for the economy and investor confidence.

“Besides, the index would be under pressure from falling oil price,” he said.

He recommended that investors buy:

▪︎ Defensive stocks, such as INTUCH and ADVANC.

▪︎ TQM, BLA, STGT, AJ and PTL, which benefit from the Covid-19 outbreak.

The SET Index closed at 1,401.78 on Monday, down 80.6 points, or 5.44 per cent. Total transactions amounted to Bt129.43 billion with an index high of 1,453.88 and a low of 1,401.58.

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Gold extends gains despite stronger dollar (nationthailand.com)

Gold extends gains despite stronger dollar

EconDec 22. 2020

By The Nation

The price of gold rose by Bt100 per baht weight in morning trade on Tuesday after rising by Bt100 per baht weight at close on Monday, the Gold Traders Association reported.

As of 9.30am, the buying price of a gold bar was Bt26,700 per baht weight and selling price Bt26,800, while gold ornaments were priced at Bt26,226.80 and Bt27,300, respectively.

At close on Monday, the buying price of a gold bar was Bt26,600 per baht weight and selling price Bt26,700, while gold ornaments cost Bt26,120.68 and Bt27,200, respectively.

Spot gold price moved to US$1,880 (Bt56,631) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February next year dropped by $6.1 to $1,882.8 per ounce on Monday due to the appreciation of the dollar.

Hong Kong gold price meanwhile dropped by HK$190 to $17,370 (Bt67,508) per tael, the Chinese Gold and Silver Exchange Society reported.

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S&P 500 slumps on virus angst after European rout (nationthailand.com)

S&P 500 slumps on virus angst after European rout

EconDec 22. 2020

By Syndication Washington Post, Bloomberg · Vildana Hajric

U.S. stocks slumped, joining a global decline as a new variant of the coronavirus in the U.K. and a wave of lockdowns and travel restrictions damped spirits.

The S&P 500 Index dipped about 0.4%, dragged lower by losses for Tesla Inc., which fell more than 6% on its first day after being added to the U.S. benchmark. The Dow Jones Industrial Average eked out a gain as Goldman Sachs Group Inc. rallied after regulators approved a stock buyback. The yield on 10-year Treasuries retreated and the dollar climbed.

The weakness in U.S. markets was minor compared to the rout seen in Europe, where the Stoxx 600 Index slumped the most since October as Italy, the Netherlands, Belgium and France closed their borders to the U.K. Travel and leisure stocks were hard hit.

Bulls did have some reason for optimism, including progress on a $900 billion U.S. economic aid package. Pfizer Inc. and BioNTech SE’s covid-19 vaccine also won the backing of a key European review panel, and a first wave of inoculations continued in the U.S.

Despite the positive developments, the emergence of the variant coronavirus strain in Britain put a damper on the return-to-work trade that’s lately taken hold. After global equities reached a record last week, traders pulled back to monitor the latest virus news.

“Fiscal stimulus is clearly fading as a catalyst, with Covid trends dictating the direction of markets,” said Emily Roland, the co-chief investment strategist at John Hancock Investment Management. “Risk assets had been shrugging off worsening virus trends, but are now showing some signs of vulnerability.”

The pound pared losses as U.K. Prime Minister Boris Johnson offered a fresh proposal to secure an 11th-hour trade deal with the European Union. Crude oil tumbled.

These are the main moves in markets:

Stocks

– The S&P 500 Index retreated 0.4% as of 4 p.m. New York time.

– The Stoxx Europe 600 Index slumped 2.3%.

– The MSCI Asia Pacific Index declined 0.4%.

– The MSCI Emerging Market Index dropped 0.9%.

Currencies

– The Bloomberg Dollar Spot Index rose 0.2%.

– The euro decreased 0.2% to $1.2235.

– The British pound decreased 0.5% to $1.3454.

– The Japanese yen fell less than 0.1% to 103.34 per dollar.

Bonds

– The yield on 10-year Treasuries decreased one basis point to 0.94%.

– Germany’s 10-year yield decreased one basis point to -0.58%.

– Britain’s 10-year yield decreased four basis points to 0.20%.

Commodities

– West Texas Intermediate crude sank 2.8% to $47.74 a barrel.

– Gold fell 0.2% to $1,877,.11 an ounce.

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Plenty of budget to deal with latest outbreak, says Finance Minister (nationthailand.com)

Plenty of budget to deal with latest outbreak, says Finance Minister

EconDec 22. 2020Finance Minister Arkhom Termpittayapaisith 

By The Nation

Finance Minister Arkhom Termpittayapaisith said on Monday the country still had sufficient budget to curb the Covid-19 outbreak, following a surge in cases over the weekend.

The government still has hundreds of billion baht left from the Bt1 trillion borrowing under the emergency decree to combat the crisis, he added.

He said it was too soon to evaluate the impact on the economy of the latest outbreak, numbered at 821 cases on Monday.

The Council of State said that of the total Bt1 trillion borrowing, Bt450 billion was earmarked for vaccine procurement and another Bt550 billion to relieve burdens on people hit by the fallout of Covid-19.

Another Bt400 billion has been allocated for economic revival, though this can be redirected to the relief fund.

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New round of Covid infections in Samut Sakhon will cost province Bt1 billion daily: FTI chief (nationthailand.com)

New round of Covid infections in Samut Sakhon will cost province Bt1 billion daily: FTI chief

EconDec 22. 2020Workers queue up at a market in Samut Sakhon province to be tested for Covid-19 on Sunday. Nation Photo by Korbphuk Phromrekha 

By The Nation

The tightening of measures in Samut Sakhon after the resurgence of Covid-19 will cost the province up to Bt1 billion daily in lost business, Federation of Thai Industries chairman Suphant Mongkolsuthree said on Monday.

However, he believes the outbreak will soon be contained.

He added that the government needs to urgently block all access points migrant workers use to sneak in and break the illegal gang that smuggles them in. He said this will curb the spread of infections among migrant workers.

He also pointed out that legal workers have passed the health check-up and have social security welfare.

There are 6,082 factories in Samut Sakhon with 345,284 workers, 23,307 of whom are foreigners.

Suphant said though the latest outbreak will dampen spending during the New Year break, but it will be on a short-term basis. He also said it will not have too much of an impact on the country’s economy next year, given that the vaccine has already been developed.

There were 382 new Covid-19 cases following active testing of migrant workers in Samut Sakhon province, and in quarantine facilities, over a 24-hour period, the Centre for Covid-19 Situation Administration (CCSA) reported on Monday.

Most of the cases (360) were migrant workers in Samut Sakhon, there were 14 domestic cases in Ayutthaya, Nakhon Pathom, Samut Prakan, Bangkok and Tak provinces, while seven Thais and a foreigner tested positive in quarantine.

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BOT responds to more complaints about Coronation banknotes (nationthailand.com)

BOT responds to more complaints about Coronation banknotes

EconDec 22. 2020BOT assistant governor Somboon Chitphentom 

By The Nation

The Bank of Thailand (BOT) was forced to defend its Coronation banknotes again on Monday after more public complaints about the bills commemorating the crowning of King Rama X in 2019.

It was the second time the central bank has had to issue a statement about the special Bt100 and Bt1,000 notes, after last week assuring they were secure from counterfeiters thanks to sophisticated technology and designs.

BOT assistant governor Somboon Chitphentom on Monday dismissed claims the commemorative notes were issued in a quantitative easing measure to increase liquidity for the Covid-hit market.

He explained the currency issuance had been calculated to meet demand and supply in the market.

He also denied rumours that the notes were not backed by central bank reserves – assets such as gold and hard foreign currencies. The central bank had adequate assets to back up the issuance, he said. The value of the commemorative bills totals Bt12 billion, or just 0.6 per cent of the total Bt2 trillion worth of banknotes in circulation, he added.

He also responded to queries of whether the commemorative banknotes could be exchanged for foreign currencies. He said the notes were valid for all normal financial transactions, but foreign banks had the right to deny any notes for money exchange.

On the issue of ATM deposit machines not accepting the commemorative bills, he said the machines would have to be reprogrammed to do so. But people could exchange commemorative banknotes for normal bills at any commercial or state-owned bank.

The central bank placed the commemorative banknotes in ATMs to give people easy access in case they want to collect them, he added. A total of 10 million Bt1,000 and 20 million Bt100 commemorative banknotes went into circulation on December 12. They have been dogged by criticism they are hard to tell apart and prone to counterfeiting.