The appreciation of the baht will help push the Stock Exchange of Thailand (SET) Index up by 3 to 4 per cent as foreign investors are making profits from speculating on the exchange rate, an analyst at Asia Plus Securities said on Friday.
He said the baht is likely to strengthen further due to US move to place Thailand on its monitoring list for currency manipulation, resulting in foreign investors speculating on the foreign exchange rate in Thai stock market.
The baht opened at 29.79 to the US dollar on Friday, strengthening from 29.84 at close on Thursday, the strongest in seven years.
“Funds are expected to flow from the bond market to the stock market as Thailand’s one-year bond yield dropped to 0.42 per cent, lower than policy interest at 0.5 per cent,” he said.
According to statistics in the past, he said funds often flow into the stock market when the baht strengthens, resulting in a boost in the stock index.
“Every Bt10 billion fund that flows into the stock market is likely to push the index up by 3-4 per cent,” he said.
He has advised investors to buy large-cap stocks that benefit from foreign fund flows such as PTT, Advanced Info Service, including stocks that benefit from the strengthening of the baht, such as Thaifoods Group.
The Stock Exchange of Thailand (SET) Index rose by 3.40 points, or 0.23 per cent, to 1,487.29 in the morning session on Friday.
An analyst at Krungsri Securities expected the day’s index to fluctuate between 1,475 and 1,495 points amid hopes from the US$900 billion economic stimulus package and foreign funds inflows in line with the baht’s appreciation.
“However, investors should beware of volatility due to the FTSE rebalance and the SET’s tight valuation,” he said.
He recommended that investors buy:
▪︎ PTTEP, PTTGC, TOP, IVL and SPRC that benefit from rising oil price.
▪︎ BH, SAWAD and TU, whose investment weight on the FTSE will increase today.
▪︎ BAM, DELTA and COM7, which will be listed on the SET50 Index.
▪︎ JMART and MBK, which will be listed on the SET100 Index.
The SET Index closed at 1,483.89 on Thursday, up 1.80 points or 0.12 per cent. The volume of total transactions was Bt112.75 billion with an index high of 1,495.37 and a low of 1,483.32.
The price of gold rose by Bt50 per baht weight in morning trade on Friday after rising by Bt50 per baht weight at close on Thursday, the Gold Traders Association reported.
At 9.24am, the buying price of a gold bar was Bt26,450 per baht weight and selling price Bt26,550, while gold ornaments were priced at Bt25,969.08 and Bt27,050, respectively.
At close on Thursday, the buying price of a gold bar was Bt26,400 per baht weight and selling price Bt26,500, while gold ornaments were Bt25,923.60 and Bt27,000, respectively.
Spot gold price moved to US$1,880 (Bt56,097) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February next year surged by $31.3 to $1,890.4 per ounce on Thursday, due to the US Federal Reserve’s move to maintain bond purchases, the progress of the US economic stimulus package and the weakening dollar.
By Syndication Washington Post, Bloomberg · Claire Ballentine, Vildana Hajric
U.S. stocks notched a solid gain to close at all-time highs, even as lawmakers continue to wrangle over a federal-spending deal.
The S&P 500 climbed for a third day, even with Republicans and Democrats still unable to reach an agreement that would assist millions of Americans who face losing virus-era assistance later this month. Investors earlier took an unexpectedly large rise in jobless claims as a sign the two sides would be prodded toward a deal. The dollar slumped, Treasury yields rose and oil advanced. Bitcoin breached $23,000 for the first time.
With the clock ticking to renew pandemic aid, leaders in Washington are under pressure to resolve their differences after months of deadlock amid signs of a faltering economic recovery. The country continues to set records for virus infections and deaths, with more jurisdictions tightening lockdowns in a renewed therat to the economy.
In Europe, lawmakers cleared the bloc’s 1.8 trillion-euro ($2.2 trillion) stimulus package on Wednesday. Cyclical shares such as miners and retailers rose on news that the rollout of a Covid vaccine would begin this month. The pound climbed and the euro rose to the highest since April 2018 as officials cautiously predicted a Brexit deal within days. Both held their gains after European Commission President Ursula von der Leyen said “big differences” remain.
“Investors know that the environment for businesses and for earnings is going to be good in the medium and long-term,” said Chris Gaffney, president of world markets at TIAA Bank. “The global economy and the U.S. in particular is going to go through a tough patch here in the next few months. However, the central banks and the future looks good.”
Emmanuel Macron’s office said he’d tested positive for the coronavirus. The French president, 42, will self-isolate during seven days, while continuing to work, his office said. The number of virus deaths reached another daily record in the U.S., while the first known allergic reaction to the Pfizer vaccine was reported in Alaska as some snarls began to emerge in the effort to send the shots across the country.
Elsewhere, oil held gains in the wake of a surprise decline in U.S. crude inventories. Stocks across Asia saw modest advances.
Policy decisions from central banks in Japan and Russia are due Friday.
– – –
These are some of the main moves in markets:
Stocks
– The S&P 500 Index advanced 0.6% as of 4 p.m. New York time, the highest on record.
– The Dow Jones Industrial Average gained 0.5%.
– The Nasdaq Composite Index climbed 0.8%.
Currencies
– The Bloomberg Dollar Spot Index fell 0.4% to the lowest in almost three years.
– The euro gained 0.6% to $1.2267, the strongest in almost three years.
– The Japanese yen appreciated 0.3%, to 103.11 per dollar, the strongest in more than nine months.
Bonds
– The yield on 10-year Treasuries rose one basis point, to 0.93%.
– Germany’s 10-year yield declined two basis points, to -0.57%.
– Britain’s 10-year yield rose one two basis points to 0.29%.
Commodities
– West Texas Intermediate crude gained 1.1%, to $48.36 a barrel, the highest in almost 10 months.
– Gold futures strengthened 1.6%, to $1,889 an ounce, the highest in almost six weeks.
The Thailand Industrial Sentiment Index (TISI) has grown for the seventh consecutive month to 87.4 points in November from 86 points in October, proving that confidence in the manufacturing sector is improving, Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said.
This confidence has been evidenced by an increase in orders, sales and production for both local and export markets.
Government stimulus packages to ease the burden of the outbreak and increase consumption has contributed to economic recovery and a boost in manufacturing confidence.
Foreign buyers have been placing orders for many products including food and medical equipment, while sales of products like clothes, shoes, leatherwear, ceramics and home appliances has been rising during the New Year holidays.
The economic outlook, however, is still uncertain because manufacturers are still worried about a second wave of infections in many countries.
They are also concerned about the rising baht, which could make Thai products less competitive globally, as well as the shortage of shipping containers, which could result in higher costs.
A survey of 1,258 manufacturers in 45 industries showed that 70.5 per cent were worried about the state of global economy, 46.1 per cent were concerned about baht appreciation, 41 per cent were worried about oil prices and 40.5 were concerned about the cost of interest.
The three-month sentiment index, meanwhile, has risen to 94.1 points from 91.9 in October thanks to government stimulus, public spending and availability of the Covid-19 vaccine.
Manufacturers, meanwhile, want the government to continue implementing stimulus packages, and are calling on the central bank to ensure the baht moves in line with regional currencies.
They also want the government to ensure the supply of shipping containers by providing incentives for their import. They also want the authorities to maintain high standards in containing the virus, he added.
The share price of BEC World (BEC) was up more than 70 per cent this month on Thursday, amid expectations of improved company performance next year.
The price of shares in the media/entertainment firm had risen to Bt7.90 at close on Thursday, more than 70 per cent up on the Bt4.62 price at the end of November.
KTB Securities senior director Mongkol Puangpetra said the rise was down to restructuring that saw BEC World change its executives and lay off employees.
“Most importantly, the company sold 119.99 million BEC-Tero Entertainment Plc shares, which accounted for 59.99 per cent of the capital to boost its financial position,” he said.
BEC’s digital TV business would also improve from a rise in advertising revenue next year, he added.
“Therefore, we forecast the company’s net profit next year will be Bt459 million, up from a net loss of Bt371 million [this year].”
However, he advised investors to take profit at a ceiling of Bt8.70 per share, citing limited upside room.
BEC shares rose sharply on third-quarter profits of Bt60 million, moves to reduce costs, revenue from selling drama rights to overseas and online platforms, and sales of BEC-Tero Entertainment shares.
“We expect BEC to gain profits next year because BEC-Tero Entertainment shares were sold at a price higher than book value, while the company was boosted by news that popular former TV show host Sorayuth Suthassanachinda will be released from jail next year,” the brokerage firm said.
Securities and Exchange Commission (SEC) records show 64 million BEC shares worth Bt327.58 million were bought by BEC executives Nipa Maleenont, Rattana Maleenont and Amporn Maleenont, daughters of the company’s founder, Vichai Maleenont.
The Stock Exchange of Thailand (SET) Index closed at 1,483.89 on Thursday, up 1.80 points or 0.12 per cent. The volume of total transactions was Bt112.75 billion with an index high of 1,495.37 and a low of 1,483.32.
In the morning session, an analyst at Krungsri Securities said he expected the day’s index to fluctuate between 1,475 and 1,490 points amid positive sentiment following the US Federal Reserve’s move to maintain bond purchases and hopes of a fresh economic stimulus package worth $900 billion (Bt26.9 trillion).
“However, investors should beware of mass sell-offs of shares due to the index’s tight valuation at 29 times the price-to-earnings ratio,” he said.
The top 10 stocks with the highest trade value today were TMB, KBANK, SCGP, CPALL, DELTA, BANPU, AOT, ADVANC, PTTGC and PTT.
As of 4.30pm, the price of oil rose by US$0.56 or 1.17 per cent to $48.38 per barrel, while gold rose by $20.60 or 1.11 per cent, to $1,879.70 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 26,806.67, up 49.27 points or 0.18 per cent.
China’s Shanghai SE Composite Index closed at 3,404.87, up 37.89 points or 1.13 per cent, while Shenzhen SE Component Index closed at 13,889.87, up 138.78 points or 1.01 per cent.
Hong Kong’s Hang Seng Index closed at 26,678.38, up 218.09 points or 0.82 per cent.
South Korea’s KOSPI Index closed at 2,770.43, down 1.36 points or 0.049 per cent.
Taiwan’s TAIEX Index closed at 14,258.93, down 45.53 points or 0.32 per cent.
Singapore’s Straits Times Index closed at 2,858.80, down 14 points or 0.49 per cent.
Vietnam’s Ho Chi Minh Stock Index closed at 1,051.77, down 15.22 points or 1.43 per cent.
FIDF suspects irregularities in management of SAM, launches probe
EconDec 17. 2020Bank of Thailand’s deputy governor Ronadol Numnonda
By The Nation
Bank of Thailand’s deputy governor Ronadol Numnonda said on Thursday that the central bank’s Financial Institutions Development Fund (FIDF) has learned about some irregularities in the management of Sukhumvit Asset Management (SAM).
FIDF is SAM’s largest shareholder.
SAM’s board of directors had set up a committee to investigate suspected irregularities in the management of non-performing assets and non-performing loans.
In support of this, the FIDF announced that four experts will join this panel to help with the probe, said Ronadol, who is also director of the FIDF.
The fact-finding job will be completed within 60 days, he added. If any wrongdoing is found, legal action will be taken against those guilty of it, he warned.
In order to allow SAM to continue working as usual, the FIDF has appointed one more director and will find a new chief for the firm urgently, he added.
SAM was created after the 1997 financial crisis to deal with distressed assets and now it has to handle bad assets resulting from the Covid-induced crisis.
The price of Thai Military Bank (TMB) shares slumped more than 1.5 per cent in the morning session on Thursday, after Canada’s Bank of Nova Scotia (BNS) sold 4.40 billion TMB and TMB-F shares worth Bt5.02 billion.
The selloff accounted for 4.57 per cent of 96.40 billion in TMB paid shares at a book price of Bt0.95 per share.
BNS sold 2.14 billion TMB shares worth Bt2.44 billion, and 2.26 billion TMB-F shares worth Bt2.57 billion. Both were sold at Bt1.14 per share.
As of 11.08am, the TMB share price had fallen by Bt0.02 or 1.67 per cent to Bt1.18 per share. Total transactions amounted to Bt3.39 billion with the highest price per share at Bt1.19 and the lowest at Bt1.17.
An analyst at KTB Securities advised investors to hold TMB shares at the target price of Bt1.20 per share.
“We expect this negative sentiment to impact the TMB share price slightly because it was traded at a price lower than the market price,” he said, adding that BNS was selling TMB shares in line with its parent company’s policy to withdraw investment in 20 countries.
According to reports on acquisition or disposition of securities (form 246-2), BNS’s stake in TMB has fallen to 0.33 per cent or 315 million shares, from the previous 4.9 per cent or 4.72 billion shares.
Thai funds are expected to sell stocks to take profits until next week thanks to a rising Stock Exchange of Thailand (SET) Index, experts said.
From September to December 16, domestic institutional investors made net sales of shares worth Bt36.40 billion, Bt7.30 billion of which was in December alone.
Asia Plus Securities’ executive vice president for research Therdsak Thaveeteeratham said Thai funds were selling shares to take profits as the SET Index had risen sharply in the previous month, adding that sales of long-term equity funds (LTFs), super savings funds (SSFs) and retirement mutual funds (RMFs) cannot compensate for mass sell-offs of Thai shares this year.
“We expected domestic funds to speculate profit from shares until next week before buying back in the last week of the month to make window dressing,” he said.
Principal Asset Management’s chief investment officer Win Phromphaet said both domestic and foreign funds made net sales in the first half of December.
He said domestic institutional investors took some profits after SET had risen from 1,200 points to 1,400 points to monitor various factors, while waiting to buy back shares later.
“We expect domestic funds to continue speculating on profits, but they will buy back shares again once the index falls to 1,400 points,” he said, adding that factors that would cause SET to face correction are the second Covid-19 wave in the US, European countries’ lockdown and correction in the US stock market.
He has advised investors to buy shares that benefit from the global economic recovery, positive news of Covid-19 vaccine and countries reopening.
Krung Thai Asset Management’s executive vice president Somchai Amornthum said investors speculated short-term profits as SET may face volatility in the last two weeks of the month from various factors, such as US Federal Reserve’s monetary policy meeting and the Covid-19 situation.
“However, we expect SET to hit 1,600 points next year,” he said.
Bank of Thailand’s deputy governor Ronadol Numnonda 
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