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SET closes below 1,200 points over fears of global slowdown

EconOct 30. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index closed at 1,194.95 on Friday, down 6.69 points or 0.56 per cent. The volume of total transactions was Bt52.72 billion with an index high of 1,204.99 and a low of 1,187.49.

In the morning session, a Krungsri Securities analyst said he expected the day’s index to fluctuate between 1,195 and 1,210 due to uncertainty over a global economic slowdown after Germany and France imposed lockdown measures to contain the spread of Covid-19, which is pressuring the index.

“This negative sentiment has caused the oil price to drop as well,” he said, adding that the index would rebound from mass buy-ups in shares whose third-quarter performance is expected to improve.

The top 10 stocks with the highest trade value today were SCGP, AOT, STA, PTT, CPALL, KBANK, SCC, SCB, BBL and STGT.

As of 4.30pm, the price of oil rose by US$0.21 or 0.58 per cent to $36.38 per barrel, while gold rose by $5.10 or 0.27 per cent, to $1,873.10 per ounce.

Other Asian indices were also on the slide:

Japan’s Nikkei Index closed at 22,977.13, down 354.81 points or 1.52 per cent.

China’s Shanghai SE Composite Index closed at 3,224.53, down 48.19 points or 1.47 per cent, while Shenzhen SE Component Index closed at 13,236.60, down 283.06 points or 2.09 per cent.

Hong Kong’s Hang Seng Index closed at 24,107.42, down 479.18 points or 1.95 per cent.

South Korea’s KOSPI Index closed at 2,267.15, down 59.52 points or 2.56 per cent.

Taiwan’s TAIEX Index closed at 12,546.34, down 116.57 points or 0.92 per cent.

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Maker of Steel City products escapes Covid fallout thanks to rising demands in EEC

EconOct 30. 2020

By The Nation

The much-touted Eastern Economic Corridor (EEC) has, so far, won extensive investment in several infrastructure projects, especially in the cast-iron equipment business.

Lertpong Sriwongthong, managing director of DR Industrial, said the EEC has had a positive impact on his company’s operations as its main products are used in power equipment and electrical systems in buildings and large projects.

DR Industrial manufactures steel conduits and fasteners as well as electrical box accessories under the brand Steel City.

He said in large projects, materials meeting high safety standards are used, and usually one brand is used for most of the production. Lertpong said this adds to the strength of his company, which has been in business for more than 30 years and has been producing more than 3,000 products.

Thanks to this strength, the Covid-19 outbreak has had a minimal impact on the company, despite a decline in real-estate and large-scale construction projects. By yearend, the company expects to achieve Bt200 million in sales revenue, which is lower than the Bt270 million earned last year.

However, he said, once the Covid-19 situation is resolved in 2021, the company expects to generate Bt450 million in revenue.

DR Industrial is also planning to spend more than Bt500 million to build a galvanising factory by 2024. He said the company is having to rely on other factories to galvanise products, which is causing problems with standard control and production timelines. However, with the new factory, the company will have full control of its production, will reduce costs by 10 to 20 per cent and will also be able to expand its production capacity. The additional cast-iron furnace will also help the company boost its production from 150 tonnes per month to 500 tonnes.

He said the first step will be make existing machines more efficient, so the production capacity can rise to 300 tonnes in order to meet rising demands thanks to new infrastructure projects in Bangkok and other provinces, including the EEC, as well as demands from neighbouring countries.

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Commission delays decision on CP-Tesco merger for another 15 days

EconOct 30. 2020

By The Nation

The Office of Trade Competition Commission (OTCC) has deferred for 15 days a decision on the proposed merger of a subsidiary of Charoen Pokphand (CP) Group with Tesco Thailand, amid worries of giving the company monopolistic control over the retail market.

CP had acquired Tesco Thailand and Tesco Malaysia in a $10.6-billion deal early this year.

A decision on the merger request of a Charoen Pokphand subsidiary was due on Thursday when the 90-day period after the request ended. However, the law permits the commission to delay its decision by 15 days after the end of 90 days.

CP Group, one of Thailand’s largest business conglomerates, had filed a document with the OTCC, seeking permission to merge its retail business with Ek-Chai Distribution System Co Ltd, the operator of Tesco Lotus.

The OTCC was strengthened when it became independent under new laws in 2017, with the power to block the creation of monopolies.

OTCC chairman Sakon Waranyuwattana said that the committee held a meeting and resolved to delay the decision for another 15 days as allowed by law. The meeting took time to consider all relevant information including the market structure, shareholders, business plan and the period of action relevant to the entity seeking merger of businesses, the impact on consumers and the competition. He said the meeting was unable to come to a conclusion and resolved to seek more time.

Under Thailand’s antitrust rules, an individual entity having a market share of over 50 per cent in the previous year, or 75 per cent in aggregate when combined with two other competitors is deemed a monopoly.

CP Group subsidiary CP All currently has a 64 per cent stake in over 11,500 7-Eleven stores, and also runs the Siam Makro stores.

Tesco Lotus has close to 2,000 stores in Thailand.

“The meeting considered reports from the subcommittee, which has quite a lot of details. It would take time to carefully consider those before voting. Therefore, we have set a meeting for consideration of the issue on November 2,” said Sakon.

The outcome would certainly be revealed in mid-November as required by law. He said the outcome could leave some people satisfied and some dissatisfied. He accepted that because of the importance of the case, society was very interested. Therefore, the committee must be careful and consider all factors in accordance with the rules prescribed by the law. Moreover, related businesses are listed on the Stock Exchange of Thailand, so any decision would have an effect on the share prices as well.

The meeting on November 2 may see a voting by members summarising the resolutions of the merger request.

One committee shall have one vote. In the event of a tie, the chairman of the meeting shall have a casting vote. The results of the consideration can be decided in three ways:

▪︎The merger is allowed as requested.

▪︎A conditional merger is allowed.

▪︎The merger is not allowed.

The law requires the commission to consider the needs of the business, benefits for business promotion, low damage to the economy and not affect the interests of consumers as a whole, he said.

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Focus on stocks not hit by second Covid-19 wave, experts suggest, as global indices plunge

EconOct 30. 2020

By The Nation

Experts are suggesting picking up stocks of companies that will not be affected by the second Covid-19 outbreak on Friday.

The Stock Exchange of Thailand (SET) Index on Thursday hit its lowest point at 1,195.99 before closing at 1,201.64, down 6.30 points or 0.52 per cent, with total transactions at Bt50.83 billion due to uncertainty over escalation in Covid-19 cases, especially in the US and Europe. The number of patients has increased to 500,000 people on average daily.

Margin account sales were Bt27.05 million, institutional investors made net sales of Bt189.71 million, foreign investor sales accounted for Bt1.17 billion and domestic investors Bt1.38 billion.

Therdsak Thaveeteeratham, executive vice president of research at Asia Plus Securities, said uncertainty over an economic slowdown after many countries imposed lockdown measures to contain the spread of Covid-19 had caused global stock indices, including the SET, to fall.

“Therefore, we advise investors to buy food and agriculture shares such as STA, TU and DCC, as well as stocks that generated returns over 5 per cent in the beginning of the Covid-19 outbreak, such as HMPRO, TISCO, MTC and AP,” he said.

Sorrabhol Virameteekul, senior vice-president at Kasikorn Securities, expected the day’s index to fluctuate between 1,190 and 1,210 as the number of Covid-19 cases is increasing. He advised investors to follow the Covid-19 situation in the Asian region and the US presidential election.

He recommended investors to buy STA, as the Covid-19 outbreak had helped boost the demand for rubber gloves, and TISCO, as it has strong fundamentals.

Nuttachart Mekmasin, research analyst at Trinity Securities, said uncertainty over the Covid-19 outbreak had caused the SET to fall only 0.5 per cent compared to other indices, adding that this is the best time for investment.

He recommended buying canned seafood and pet food stocks such as ASIAN, seasonings stocks such as XO, polyethylene terephthalate film stocks such as PTL, and rubber gloves stocks such as STGT.

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Gold price drops amid strong US economic data

EconOct 30. 2020

By The Nation

The price of gold dropped by Bt100 per baht weight in morning trade on Friday, the Gold Traders Association reported.

As of 9.28am, the buying price of a gold bar was Bt27,600 per baht weight and selling price Bt27,700, while gold ornaments were priced at Bt27,106.08 and Bt28,200, respectively.

At close on Thursday, the buying price of a gold bar was Bt27,700 per baht weight and selling price Bt27,800 while gold ornaments were priced at Bt27,197.04 and Bt28,300, respectively.

Spot gold price moved to US$1,873 (Bt58,401) per ounce on Friday morning after the price dropped by US$11.2 to $1,868 per ounce at close on Thursday due to the strengthening dollar and mass sell-offs of safe-haven assets in response to strong US economic data, especially the historic rise in third-quarter gross domestic product.

Hong Kong gold price dropped by HK$120 to $17,250 (Bt69,381) per tael on Friday morning, the Chinese Gold and Silver Exchange Society reported.

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SET rises despite worries over economic slowdown due to lockdowns in Europe

EconOct 30. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index rose by 1.16 points, or 0.10 per cent, to 1,202.80 in the morning session on Friday.

An analyst at Krungsri Securities expected the day’s index to fluctuate between 1,195 and 1,210 amid uncertainty over an economic slowdown after Germany and France imposed lockdown measures to contain the spread of Covid-19, which is pressuring the index.

“This negative sentiment has caused the oil price to drop as well,” he said, adding that the index would rebound from mass buy-ups in shares whose third-quarter performance is expected to improve.

He recommended that investors buy TU, STGT, STA, CBG, IVL, COM7, SYNEX, ASIAN, HANA, SVI and TVO, whose third-quarter performance is expected to improve.

The SET Index closed at 1,201 on Thursday, down 6.30 points or 0.52 per cent, while total transactions amounted to Bt50 billion due to uncertainty over an economic slowdown after Germany and France imposed lockdown measures and Thailand’s political unrest.

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Baht expected to move in a narrow range until US election

EconOct 30. 2020

By The Nation

The baht opened at 31.23 to the US dollar on Friday, unchanged from Thursday’s close.

The Thai currency on Friday is likely to move between 31.20 and 31.40, said Jitipol Puksamatanan, senior director of the chief investment office at SCB Securities.

He said the S&P 500 and Nasdaq indices rose by 1.2 per cent and 1.6 per cent, respectively, after strong US economic data and announcement of third-quarter profit by large companies.

“The US third-quarter gross domestic product [GDP] rose by 33.1 per cent quarter on quarter, private consumption rose by 40.7 per cent, and initial jobless claims dropped to 751,000 positions, better than most analysts expected,” he said.

He said the Bank of Japan recently decided to maintain its short-term interest rate at minus 0.1 per cent and expected the country’s economy next year to recover by 2.6 per cent.

“Meanwhile, the European Central Bank signalled that it would initiate additional monetary policies to stimulate the economy amid the Covid-19 outbreak,” he said.

He said the US 10-year bond yield rose by 8 basis points to 0.84 per cent and the dollar strengthened by 0.5 per cent due to the positive factors, causing the price of oil and gold to drop by 3.5 per cent and 0.5 per cent respectively, as well as the Australian dollar and Japanese yen to weaken.

“Therefore, we expect the baht in the short term to move in a narrow range until the US presidential election next week,” he added.

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AIS, Techsauce gear up for growth in e-sports market

EconOct 30. 2020Alistair David Johnston 

By The Nation

AIS x Techsauce Esports Summit 2020, the first e-sports and gaming conference in Thailand, has revealed that the Thai gaming market can compete overseas provided it receives continuous support from all parties.

Alistair David Johnston, AIS’s new managing director, told the summit on Wednesday that the e-sports industry in Thailand is likely to generate more than Bt27 billion this year, and will also help drive the country’s digital economy forward.

He added that as a digital service provider, AIS will work on four key strategies – connect, compete, co-educate and community – to upgrade the Thai gaming and e-sports industry.

“AIS is ready to lead the market in e-sports in Southeast Asia, which is constantly growing and is attractive to businesses,” Johnston said.

Beyond just a game

Oranuch Lertsuwankij, co-founder and CEO of Techsauce, said e-sports brand revenue is currently valued at US$1 billion, with an annual growth rate of 10 per cent. She is calling on companies and stores to not overlook this opportunity, but to join the industry as consumers are now paying more attention to interactive media.

She said interactive media can be used not just for IT products, but also for FMCG (fast-moving consumer goods) as well.

“We want to be a bridge connecting both sides to drive the e-sports industry,” she said.

5G to drive industry

Chatchai Khunpitiluck, vice president of the Digital Economy Promotion Agency (DEPA), said the digital content market, including game and animation industry, is expected to continue growing especially since people are having to stay at home due to the outbreak. This has resulted in a 20-per-cent increase in online media consumption and also resulted in rising popularity of e-sports.

Research conducted by the department shows that the e-sports industry is likely to grow by an average of 9 per cent from Bt22 billion in 2019 if it gets constant support from the government. The market was valued at Bt24 billion this year and is expected to expand further until yearend.

“We found that up to 70 per cent of young people play games on a wireless device. Therefore, the government’s role is to ensure the infrastructure is ready for a 5G network,” Chatchai said.

Change of social mindset

Santi Lohtong, president of the E-Sports Association of Thailand, said Thailand’s e-sports industry is growing slowly compared to neighbouring countries, and one of the biggest obstacles is the negative mindset Thai society has toward e-gaming. He said the association has tried to change the image of e-gaming and is also promoting nutrition and exercise in line with sports science principles.

Santi said the E-sports Association of Thailand wants to create professional athletes who can compete at the global level.

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S&P 500 rebounds to post biggest gain in 2 weeks

EconOct 30. 2020

By Syndication Washington Post, Bloomberg · Claire Ballentine, Vildana Hajric · BUSINESS, US-GLOBAL-MARKETS 
U.S. stocks bounced back a day after their biggest rout in four months, with investors encouraged by better-than-forecast economic data even as they kept a wary eye on growing coronavirus infections.

The S&P 500 Index 1.2%, the most since Oct. 12, after President Donald Trump said he plans “a very big package” of stimulus following the election. The dollar and Treasury yields rose after reports showed a decline in weekly jobless claims and a surge in third-quarter economic growth that reversed much of the pandemic collapse.

An exchange-traded fund that tracks the Nasdaq 100 edged lower after the close of regular trading following a flurry of earnings releases. Twitter Inc.’s new-user numbers disappointed, while revenue for Alphabet Inc. beat estimates. Amazon.com Inc. projected operating income that trailed estimates after reporting better-than-forecast sales.

Even with Thursday’s gains, global equities are headed for the worst weekly decline since March amid new lockdown measures and U.S. politicians’ failure to agree to a stimulus plan before the Nov. 3 election. The covid-19 surge in the Midwest rose to a record, led by single-day highs in Kansas, Iowa and South Dakota as the region’s outbreak spread toward both coasts. Anthony Fauci, the government’s top infectious-disease doctor, said the earliest a vaccine might be available is late December or early January.

“The market clearly has concerns about covid and shutdowns but it would not surprise me at all if in a week or two there’s a completely different narrative,” said Evan Brown, head of multi-asset strategy at UBS Asset Management. “Ultimately we’re going to get a safe and effective vaccine.”

In Europe, stocks edged lower. The euro extended its decline after the European Central Bank paved the way for a package of fresh easing in December to deal with a worsening economic outlook.

Stocks slumped in Asia, with losses for the main indexes in Japan, Australia and Hong Kong.

Here are the main market moves:

Stocks

– The S&P 500 Index rose 1.2% as of 4 p.m. EDT.

– The Nasdaq 100 Index increased 1.9%.

– The Stoxx Europe 600 Index fell 0.1%.

– The MSCI Asia Pacific Index decreased 0.2%.

Currencies

– The Bloomberg Dollar Spot Index increased 0.3%.

– The British pound declined 0.4% to $1.2936.

– The euro weakened 0.6% to $1.1678.

– The Japanese yen fell 0.3% to 104.64 per dollar.

Bonds

– The yield on 10-year Treasurys rose six basis points to 0.83%.

– Germany’s 10-year yield declined one basis point to -0.64%.

– Britain’s 10-year yield rose one basis point to 0.22%.

Commodities

– WTI crude declined 2.7% to $36.38 a barrel.

– Gold weakened 0.4% to $1,870.01 an ounce.

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More SMES given access to soft loans thanks to new credit guarantees: BOT

EconOct 30. 2020BOT assistant governor Jaturong Jantarangs 

By The Nation

Many more small and medium-sized enterprises (SMEs) will be able to access the Bank of Thailand (BOT)’s soft loan scheme after the Thai Credit Guarantee Corporation (TCG) agreed to provide loan guarantees, said BOT assistant governor Jaturong Jantarangs on Thursday.

Much of the Bt500-billion in soft loans made available in April to support SMEs hit by the Covid-19 crisis has gone unused due to tight loan conditions.

To help SMEs, the TCG has stepped in to provide guarantees from the third to the 10th year of the loan term, he said.

The TCG will use its Bt57 billion fund to take on risk by agreeing to compensate up to 30 per cent of any loan that turns into bad debt.

As of October 19, banks had approved loans worth a total Bt119.7 billion for 71,284 SMEs. 

More than three-quarters (76.1 per cent) took loans of up to Bt20 million. About 17.4 per cent took loans of Bt20 to Bt100 million, while 6.5 per cent borrowed Bt100 to Bt500 million.

The average loan is worth Bt1.7 million.

Rak Vorrakitpokatorn, president of TCG, said the new loan term of up to 10 years is very attractive compared with previous two-year repayment window under the soft loan scheme.

Surat Leelataviwat, executive vice president at Kasikornbank, said loan guarantees provided by TCG will encourage banks to lend more under the BOT’s soft loan scheme.

As of October 11, Kasikornbank had lent a total Bt21.7 billion to 6,800 borrowers under the soft loan scheme.

Since the Covid-19 outbreak early this year, Kasikornbank has extended credit worth Bt200 billion to businesses, including Bt120 billion of the bank’s own money.