The Bank of Thailand (BOT) is consulting with capital market agencies, the Thai Bankers’ Association and private funds on a new initiative to manage debt.
The idea is to create a “debt warehousing” fund to manage debts owed to financial institutions, BOT Deputy Governor Ronadol Numnonda explained.
The aim is to limit the damage from borrowers unable to make repayments due to the impact of Covid-19.
Their debt will be “warehoused”, or suspended until the virus situation improves, when debtors will be able to buy back their debt and businesses, he said.
The scheme would incorporate a guarantee facility and mechanism to ensure debtors were not forced to sell assets at unreasonably low prices, as happened during the 1997 financial crisis. Under the new scheme, both creditor and debtor would have to agree on prices of any assets sold to pay off the debt, according to Ronadol.
The new scheme is expected to be ready by the end of this year, once participants source the necessary funding. The BOT or bodies such as asset management companies might take the leading role in setting up debt warehousing, he added.
Thailand’s small businesses have suffered severe impacts from the pandemic. Despite signs of recovery, those in the tourism sector continue to suffer as countries around the world impose new lockdowns. However, hopes for the tourism industry were given a boost in recent days by Pfizer and Moderna’s breakthroughs in vaccine development.
Investors eyeing gold should also keep a close watch on US monetary policies, an expert said on Monday.
Along with supply and demand, the US Federal Reserve’s policies are the main factors driving volatility in the gold price, InterGOLD Gold Trade’s managing director Teerarat Chutawarakul commented.
He cautioned that gold was similar to stocks in that it was difficult to predict when prices were cheap or at what point investing in gold would generate the best returns.
“The short-term gold price will be affected by various factors, including the Covid-19 outbreak, moves by outgoing US President Donald Trump, and new economic data. However, demand and supply for gold, as well as the Fed’s monetary policies, are the main factors underpinning the gold price in the long term,” he said.
He advised investors to monitor Fed policy since the global market uses dollars to trade gold, while the gold price tends to rise when the dollar weakens and fall when it strengthens.
“Meanwhile, the dollar weakens when the Fed cuts interest rates or injects cash into the economic system, and it strengthens when the Fed raises the rate or removes cash from the system,” he explained.
In current conditions, he expects the gold price to remain in positive territory since the Fed is injecting cash into the system and will keep its interest rate low for up to two years.
“Therefore, this is a good time to consider investing in gold,” he concluded.
The Stock Exchange of Thailand (SET) Index closed at 1,349.81 on Tuesday, down 1.25 points or 0.09 per cent. The volume of total transactions was Bt90 billion with an index high of 1,365.91 and a low of 1,344.55.
During the morning session, an analyst at Krungsri Securities said expected the day’s index to rise over positive news of Moderna’s Covid-19 vaccine found to be nearly 95 per cent effective in a preliminary analysis.
However, there is limited room for SET to rise due to the ongoing political unrest, he said, adding that the index would move between 1,345 and 1,360 points.
The top 10 stocks with the highest trade value today were STGT, KBANK, MINT, SCGP, AOT, BDMS, PTT, ADVANC, GPSC and PTTEP.
As of 4.30pm, the price of oil rose by US$0.12 or 0.29 per cent to $41.46 per barrel, while gold rose by $2.30 or 0.12 per cent, to $1,890.10 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 26,014.62, up 107.69 points or 0.42 per cent.
China’s Shanghai SE Composite Index closed at 3,339.90, down 7.07 points or 0.21 per cent, while Shenzhen SE Component Index closed at 13,732.52, down 118.31 points or 0.85 per cent.
Hong Kong’s Hang Seng Index closed at 26,415.09, up 33.42 points or 0.13 per cent.
South Korea’s KOSPI Index closed at 2,539.15, down 3.88 points or 0.15 per cent.
Taiwan’s TAIEX Index closed at 13,593.01, up 41.18 points or 0.30 per cent.
The Stock Exchange of Thailand (SET) Index rose by 3.21 points, or 0.24 per cent, to 1,354.27 in the morning session on Tuesday.
An analyst at Krungsri Securities expected the day’s index to rise over positive news of Moderna’s Covid-19 vaccine found to be nearly 95 percent effective in a preliminary analysis.
However, there is limited upside room for the SET due to the country’s political unrest, he said, adding that the index would move between 1,345 and 1,360 points.
He suggested that investors buy BEM, BTS, GPSC, PSH, ROJNA and SIRI whose third-quarter performance were expected to improve.
The SET Index closed at 1,351.06 on Monday, up 4.59 points or 0.34 per cent. The volume of total transactions was Bt78.50 billion with an index high of 1,365.87 and a low of 1,351.04.
The price of gold in Thailand dropped by Bt50 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 9.32am, the buying price of a gold bar was Bt26,900 per baht weight and selling price Bt27,000, while gold ornaments were priced at Bt26,408.72 and Bt27,500, respectively.
At close on Monday, the buying price of a gold bar was Bt26,950 per baht weight and selling price Bt27,050, while gold ornaments were Bt26,469.36 and Bt27,550, respectively.
Spot gold price moved to US$1,890 (Bt57,038) per ounce in the morning after rising by US$1.6 to $1,887.8 per ounce at close on Monday from the weakening dollar and uncertainty over the Covid-19 outbreak in US and Europe, resulting in mass buy-ups of safe-haven assets.
Hong Kong gold price dropped by HK$60 to $17,450 (Bt67,924) per tael on Tuesday morning, the Chinese Gold and Silver Exchange Society reported.
By The Washington Post · Taylor Telford · BUSINESS, US-GLOBAL-MARKETS
U.S. stocks closed at new records Monday, after promising trial news from Moderna left investors hopeful that the country may have two coronavirus vaccines available on a limited basis by the end of 2020.
After a preliminary analysis, biotechnology firm Moderna reported that its experimental coronavirus vaccine, which it is co-developing with the National Institutes of Health, was almost 95% effective at preventing illness, including severe cases. The news comes just days after pharmaceutical giant Pfizer and its German partner BioNTech reported that its experimental vaccine was 90% effective, spurring optimism on Wall Street that powered the S&P 500 to a record Friday.
By market close, the Dow Jones industrial average was up nearly 471 points, or 1.6%, at 29,950, a new record close. The Standard & Poor’s 500 index advanced 1.16% to 3,626. The tech-heavy Nasdaq closed up 0.8% to 11,924.
“With Moderna reporting such positive results, investors have another piece of the puzzle on how we will solve the current health crisis,” Wayne Wicker, chief investment officer at Vantagepoint Funds, said in an email to The Washington Post. “While the next few months may contain some tragic statistics associated with Covid 19, investors are looking forward 9-18 months with a vision that we will be returning to a more normal environment.”
The promising vaccine news comes as the United States braces for what many expect to be the darkest period of the pandemic. The total number of reported U.S. coronavirus cases surpassed 11 million on Sunday, only one week after hitting the 10 million mark. The number of fatalities from the virus now stands at more than 246,000.
Moderna’s stock soared with Monday’s trading, closing up nearly 9.6%. Investors flocked back to companies whose stocks have been heavily battered by the pandemic, especially in travel and hospitality. Carnival cruises climbed nearly 9.5%, while United Airlines closed up almost 5.2% and American Airlines gained almost 4.5%.
“Energy stocks and travel & leisure stocks will be the first benefactors on this news as they have been some of the hardest hit sectors due to distancing and shutdowns,” Anthony Denier, chief executive of the app-based brokerage Webull, said in an email to The Post. “We will also see a rotation out of the stay at home winners like tech and media as portfolios start to rebalance for a re-opened economy.”
Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, who was one of three people briefed on the Moderna data by an independent committee Sunday morning, called the results “as good as it gets.” He predicted that some doses could be available for high-risk people before the end of 2020 and become widely available in the spring.
Unlike Pfizer, which invested $2 billion of its own money in researching and developing a vaccine, Moderna is part of Operation Warp Speed, a government initiative designed to erase the financial risk of vaccine and therapeutics development by providing upfront funding to companies and helping coordinate the trials. Moderna received $2.5 billion from the U.S. government to support research, development and manufacturing of its vaccine candidate, while Pfizer signed a contract to sell doses to the U.S. government.
David Keller, Chief Market Strategist at StockCharts.com, cautioned investors to stay tuned for market volatility, despite the hopeful news.
“The market moves on expectations so the encouraging news from Moderna certainly provides a boost to stocks,” Keller said in an emailed statement. “This is sort of a continuation of the good news last week from Pfizer and tells investors to be optimistic about the long-term recovery story.”
Hopes of an accelerated return to normalcy fueled higher risk appetites on Wall Street. By 4 p.m., gold, a haven for investors in uncertain times, was flat at 0.01% to trade at $1,886 per ounce. The yield on the 10-year U.S. Treasury note edged higher to nearly 1.5%. Bond yields rise as prices drop.
Asian markets soared Monday after China and Japan joined forces with more than a dozen economies in the region to sign the world’s largest trade deal, covering about 30% of the global population and a similar share of economic output, after eight years of negotiations. It is the second major trade pact in two years that excludes the United States.
Oil markets also rose Monday amid the optimism. Brent crude, the international benchmark, was trading up 2.6%, at $43.89 per barrel, by 4 p.m. West Texas Intermediate crude, the U.S. oil benchmark, rose 3.1%, to trade at $41.38 per barrel.
OPEC+ gets scant relief from vaccine as oil ministers meet
EconNov 17. 2020The tanker Navigator Genesis is moored near the Esso Fawley Oil Refinery in Fawley, England, on May 14, 2020. MUST CREDIT: Bloomberg photo by Luke MacGregor
By Syndication Washington Post, Bloomberg · Grant Smith, Salma El Wardany, Javier Blas · BUSINESS
Oil markets may be cheering the prospects of a coronavirus vaccine, but OPEC+ can’t celebrate.
Crude prices have rallied to a 10-week high on hopes that Pfizer Inc. and BioNTech SE’s breakthrough could soon revive the flights, car journeys and other economic activity that underpin fuel consumption.
Nonetheless, the alliance of producers led by Saudi Arabia and Russia is discussing a delay of the supply boost they’d hoped to make in January. Oil demand is currently suffering a fresh blow from a resurgence of the pandemic.
Ministers are focused on a postponement of three to six months, according to delegates familiar with the talks who asked not to be identified. They’ll hold an interim meeting on Tuesday to review the market, then make a final decision in a further two weeks.
Frightening Pullback
“This is the wrong time to be increasing crude supply,” Bob McNally, president of consultant Rapidan Energy Group and a former White House official, said in a Bloomberg television interview. “They really almost have no choice now but to postpone. The demand pullback in Europe is frightening.”
While the vaccine progress relieves some of the pressure on the Organization of Petroleum Exporting Countries, it won’t provide a significant boost to demand until the second half of 2021 next year, according to the International Energy Agency in Paris. Economic fallout from the latest wave of lockdowns will linger, OPEC said in a report.
The 23-nation alliance had intended to ease some of the unprecedented supply curbs introduced in May to offset the collapse in demand, restoring 2 million barrels a day of output at the start of next year. They made a similar increase over the summer as the global economy recovered, and hoped that the trend would continue.
But in recent weeks OPEC+ members have acknowledged those aspirations look unfeasible. Instead, the producers look set to keep about 7.7 million barrels a day — roughly 8% of global supply — offline for a little longer.
Deferring the supply boost — and thus supporting prices — may be critical for OPEC+ nations, many of which need oil prices far above the current level of $43 a barrel in order to cover government spending. It would also throw a lifeline to the wider industry, from majors like Exxon Mobil Corp. to independent companies in the U.S. shale patch.
Saudi Arabian Energy Minister Prince Abdulaziz Bin Salman said on Nov. 9 the producers can “tweak this agreement” as required. Algeria, which holds OPEC’s rotating presidency, and group Secretary General Mohammad Barkindo made similar remarks.
Even Russia, usually reluctant to forego oil sales, has signaled support. President Vladimir Putin said on Oct. 22 that delay was an option, and even gestured at the possibility of making deeper production cuts if necessary. Further curbs don’t appear needed so far, delegates say.
“The lockdowns in Europe and what that will mean for demand will be very much on their mind,” Daniel Yergin, vice chairman at IHS Markit, said in a Bloomberg Television interview. “The easiest thing for them to do, and as President Putin signaled, is to roll it over.”
While the Joint Ministerial Monitoring Committee that convenes on Tuesday won’t set policy, Riyadh and Moscow may give some insight into their thinking before the main ministerial meetings on Nov. 30 to Dec. 1. Updates on the different vaccines under development by pharmaceutical companies are expected in the meantime.
Faltering demand isn’t the only headache for the alliance, which is also having to reckon with a surprising increase in supply from one of its own members.
Libya, which is exempt from the agreement to restrain production, has revived output to the highest level in almost a year after a truce in its civil war. The North African nation tripled supply to 450,000 barrels a day last month, and is now pumping above 1 million a day.
The case for extending curbs, though persuasive, could still run into opposition.
The United Arab Emirates, which has recently chafed at its OPEC commitments, emphasized on Nov. 9 that consensus is necessary for the deal to be amended. “We have to be all convinced that tweak is required,” Energy Minister Suhail Al Mazrouei said.
One flash-point may be the millions of barrels of outstanding cuts still due from some members, which were supposed to be completed by the end of the year.
OPEC+ nations that flouted their output quotas in the initial months of the agreement, such as Iraq and Nigeria, have been tasked with “compensation cuts.” After making some tentative efforts at these, Baghdad defiantly ramped exports back up last month.
Iraq has often rebelled against OPEC-mandated supply limits as it rebuilds an oil industry and economy scarred by decades of conflict and sanctions.
As Baghdad’s finances come under acute distress, OPEC delegates doubt the country will make further efforts to atone. With Saudi Arabia’s steely energy minister determined that all remaining debts are paid, the group may face a bumpy path to a final agreement.
The National Economic and Social Development Council (NESDC) forecasts the Thai economy will grow by up to 4.5 per cent in 2021 after a projected contraction of 6 per cent this year.
The council forecasts the value of exports will fall 7.5 per cent this year. Spending on private consumption is expected to shrink 0.9 per cent and total investment to contract by 3.2 per cent.
However, the NESDC expects the Thai economy to grow at between 3.5 and 4.5 per cent in 2021, driven by rising domestic demand, recovery of the world economy and trade, and government budget spending and economic stimulus.
It predicts export values to rise by 4.2 per cent, private consumption spending by 2.4 per cent, and total investment by 6.6 per cent.
The Stock Exchange of Thailand (SET) Index closed at 1,351.06 on Monday, up 4.59 points or 0.34 per cent. The volume of total transactions was Bt78.50 billion with an index high of 1,365.87 and a low of 1,351.04.
In the morning session, an analyst at Krungsri Securities said he expected the day’s index to rise to between 1,355 and 1,360 points in response to news of Thailand signing the Regional Comprehensive Economic Partnership (RCEP) pact and subsequent rise in regional stock indices.
“Investors, however, should beware of market volatility from uncertainty over escalating Covid-19 cases and domestic political unrest,” he said, adding that pro-democracy protesters are planning to rally again this week.
The SET rose more than 16 points in the morning session after the National Economic and Social Development Council (NESDC) revealed that Thailand’s gross domestic product (GDP) had contracted 6.4 per cent in the third quarter and 6.7 per cent in the first nine months. The NESDC expected Thailand’s GDP to contract 6.7 per cent this year from the initial expectation of minus 7.3 to minus 7.8 per cent.
The top 10 stocks with the highest trade value today were STGT, SCGP, MINT, KBANK, VGI, GULF, PTT, WHA, GPSC and ADVANC.
As of 4.30pm, the price of oil had risen by US$0.58 or 1.45 per cent to $40.71 per barrel, while gold rose by $5.70 or 0.30 per cent, to $1,891.90 per ounce.
Other Asian indices were on the rise:
Japan’s Nikkei Index closed at 25,906.93, up 521.06 points or 2.05 per cent.
China’s Shanghai SE Composite Index closed at 3,346.97, up 36.86 points or 1.11 per cent, while Shenzhen SE Component Index closed at 13,850.83, up 96.28 points or 0.70 per cent.
Hong Kong’s Hang Seng Index closed at 26,381.67, up 224.81 points or 0.86 per cent.
South Korea’s KOSPI Index closed at 2,543.03, up 49.16 points or 1.97 per cent.
Taiwan’s TAIEX Index closed at 13,551.83, up 278.50 points or 2.10 per cent.
Suwannee Jatsadasak, Bank of Thailand’s senior director, said the country’s banking system has remained resilient thanks to high levels of capital funds, loan-loss provisions and liquidity to support economic recovery from the fallout of Covid-19 crisis.
Debt-relief measures, coupled with revisions to rules on loan classification and provisions facilitating bank-loan expansion have alleviated the deterioration of bank-loan quality, she said on Monday.
However, the banking system’s profitability has declined as banks continue to set aside high loan-loss provisions to cushion the adverse impact of Covid-19 on loan quality, she said.
Capital funds for the Thai banking system stood at Bt2.96 trillion, equivalent to capital adequacy (BIS) ratio of 19.8 per cent. Loan-loss provisions remained high at Bt782.5 billion with non-performing loan (NPL) coverage ratio of 149.7 per cent. Liquidity coverage ratio (LCR) registered at 184.9 per cent.
In the third quarter of this year, Thai banks’ overall loan growth stood at 4.6 per cent year-on-year, dropping slightly by 5 per cent from the previous quarter.
According to data available, corporate loans (64.6 per cent of total loans) expanded at 4.5 per cent year-on-year, but contracted quarter-on-quarter as some switched their funding source from bank loans to this issuance of bonds and equity.
Loans for small businesses showed a lower contraction, due mainly to the central bank’s soft-loans scheme and gradual recovery of the economy.
Consumer loans (35.4 per cent of total loans) grew at 4.8 per cent year-on-year, and increased quarter-on- quarter following the relaxation of lockdown measures. Mortgage lending, in particular, expanded consistent with an increase in demand for low-rise residential projects compared to the previous quarter.
Debt-relief measures, together with revisions to rules on loan classification and provisioning, have continued to alleviate banks’ loan-quality deterioration in the third quarter of 2020. The gross amount for outstanding NPLs (stage 3) stood at Bt513.9 billion, equivalent to 3.14 per cent of total loans, edging up slightly from 3.09 per cent in the previous quarter.
Meanwhile, the ratio of loans with a significant increase in credit risk (SICR or stage 2) to total loans stood at 7.03 per cent, down from 7.49 per cent in the previous quarter.
The banking system recorded net profit of Bt28 billion in the third quarter and Bt130.4 billion in the first nine months of 2020, a decline from last year owing to continued high-levels of provisioning expenses to cushion against the potential of further loan-quality deterioration.
As a result, the ratio of return on asset (ROA) dropped to 0.52 per cent from 0.60 per cent in the previous quarter. The ratio of net interest income to average interest-earning assets (Net Interest Margin: NIM) declined from 2.60 per cent to 2.55 per cent, largely due to a drop in interest income on loans.
BOT Deputy Governor Ronadol Numnonda 
Teerarat Chutawarakul 
The tanker Navigator Genesis is moored near the Esso Fawley Oil Refinery in Fawley, England, on May 14, 2020. MUST CREDIT: Bloomberg photo by Luke MacGregor 
SootinClaimon.Com 