The outlook for the global coal industry is stable, with demand and pricing benchmarks expected to improve over the next 12-18 months, according to Moody’s inaugural assessment of coal prospects.
“An improving global economy sets the stage for some recovery in demand in the most important coal-consuming sectors, including power generation and steelmaking,” said Benjamin Nelson, an analyst at Moody’s Investors Service.
“An improving supply/demand balance will also modestly lift coal pricing in most regions in 2021.”
Moody’s expectations for the global coal industry are:
• EBITDA will increase more than 10% in 2021 but remain below 2019 levels.
• Prices for thermal coal and met coal in 2021 to remain lower than 2019 levels
• A modest Asia-Pacific recovery in 2021
• Coal demand in Europe will also recover somewhat in 2021
• The North American coal market will post a more modest rebound in 2021
Longer-term risks remain substantial beyond the horizon of the outlook, said Moody’s. Coal producers’ access to capital is diminishing as investors move away from coal due to ESG concerns, and energy intensity in the OECD markets is falling, with demand for electricity lagging economic growth, it added.
The government collected Bt2.15 trillion in net revenue in the first 11 months of the 2020 fiscal year, which was 12 per cent or Bt293 billion below the target due to shrinking economy, the Finance Ministry’s spokesman Lavaron Sangsnit said.
He attributed the shortfall to the Covid-19 outbreak and the government’s continued launch of relief measures to ease people’s burden.
The Revenue Department collected Bt1.61 trillion, 12.7 per cent or Bt233 billion less than targeted.
The Excise Department collected around Bt500 billion, falling short of the estimated amount by 14.9 per cent or Bt87.8 billion, while the
Customs Department collected Bt85.9 billion, falling short from the target by 15.5 per cent or Bt15.7 billion.
The price of gold rose by Bt200 per baht weight in morning trade on Wednesday, the Gold Traders Association reported.
As of 9.26am, the buying price of a gold bar was Bt28,300 per baht weight and selling price Bt28,400 while gold ornaments were priced at Bt27,788.28 and Bt28,900, respectively.
At close on Tuesday, the buying price of a gold bar was Bt28,100 per baht weight and selling price Bt28,200 while gold ornaments were Bt27,591.20 and Bt28,700, respectively.
Spot gold price moved to US$1,896 (Bt60,056.19) per ounce on Wednesday morning after the price rose by $20.9 to $1,903.2 per ounce at close on Tuesday.
Gold price closed in positive territory from the weakening dollar and mass buy-ups of the precious metal as a safe-haven asset amid uncertainty over the Covid-19 impact on the economy.
Hong Kong gold price rose by HK$120, opening at $17,520 (Bt71,619.46) per tael on Wednesday morning, the Chinese Gold and Silver Exchange Society reported.
The Stock Exchange of Thailand (SET) Index dropped by 3.46 points, or 0.28 per cent, to 1,253.88 in morning session on Wednesday.
An analyst at Krungsri Securities expected the index to fall to the support line at 1,250 due to lack of positive sentiment and the sharp fall in oil price due to uncertainty over fuel demand amid the Covid-19 crisis.
“Meanwhile, uncertainty over market volatility from the expiration of SET’s ceiling-floor adjustment, uptick rules and circuit breaker would pressure the index,” he said.
As investment strategy, he recommended that investors buy:
▪︎ BANPU and AGE that benefit from rising coal price in response to China’s strong demand.
▪︎ TU, ASIAN, COM7, CHG, PTG and PlanB whose third-quarter performance is expected to grow.
▪︎ DELTA, HANA, KCE and SMT that benefit from the weakening baht.
The SET Index closed at 1,257.34 on Tuesday, down 5.68 points or 0.45 per cent. The volume of total transactions was Bt38.20 billion with an index high of 1,267.67 and a low of 1,254.34.
Foreign investors are expected to make net sales in the Thai stock market of Bt300 billion to Bt350 billion this year from the current Bt273 billion due to the slowdown in the country’s economic recovery, Krungthai Bank said.
Krungthai market strategist Poon Panichpibool expected another Bt30 billion to Bt50 billion of foreign funds to flow out of the Thai stock market if economic recovery is slow.
He said this phenomenon would happen if there were a second Covid-19 outbreak in Thailand, the government’s travel bubble scheme fails to attract tourists or foreign investors wait to buy Thai bonds with interesting yields.
“However, foreign investors would make net sales in Thai stocks of only Bt275 billion to Bt300 billion this year if economic recovery is speeded up by the success of the travel bubble scheme, and Bt30 billion of foreign funds would flow into the stock market,” he said, adding that the production and distribution of Covid-19 vaccine would boost economic recovery.
“Meanwhile, the Thai bond market would not benefit much from the abovementioned positive sentiment because foreign investors would be more cautious about buying long-term bonds whose yield depended on the economic direction and inflation.”
He said more than Bt320 billion cash recently flowed out of the Thai stock market of which Bt270 billion was foreign investors’ funds as they believed the Thai economic outlook was still gloomy and there was no sign of a tourism recovery.
“Meanwhile, foreign investors’ funds began to flow into the Thai bond market after facing mass sell-offs worth Bt150 billion in March, as Thai bond yield was currently high compared to the US and European bonds,” he said.
He expected foreign funds to flow back into the Thai capital market with at least Bt100 billion this year from the recovery in the global and Thai economy and distribution of Covid-19 vaccine in the later part of this year.
On Tuesday, foreign investors made net sales of Thai stocks totalling Bt1.48 billion, while net sales since the beginning of this year increased to Bt273 billion.
By Syndication Washington Post, Bloomberg · Sarah Ponczek · BUSINESS The end-of-month rebound in global equities faded as investors weighed prospects for fiscal stimulus in the U.S. and the outlook for the coronavirus pandemic. Oil tumbled on concern slow growth will limit demand.
The S&P 500 Index slumped, with more than two stocks falling for every one that advanced, after talks on expanding aid ended for the day with plans to resume discussions tomorrow. Data showing New York City’s rate of positive tests rose above 3% for the first time in months weighed on sentiment.
Oil fell toward $39 a barrel in New York. Treasurys were little changed, while the dollar weakened.
With the pandemic’s global death toll exceeding 1 million and virus cases on the upswing in many locales, investors are pinning hopes on a $2.2 trillion stimulus proposal by Democrats to help support economic growth. End-of-month and end-of-quarter portfolio rebalancing could also be exacerbating market moves as September comes to a close.
“A lot of the fiscal stimulus conversation is driving the markets here in the near-term,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management. At the same time, there “has been a fear that you’d have a resurgence in cases in the fall and some people have chosen to take their money and sit on the sidelines.”
The negotiations between the Trump administration and congressional Democrats are reaching a critical juncture this week. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke Tuesday morning for 50 minutes and are set to speak again Wednesday.
Markets are also girding for the first presidential debate Tuesday, and traders have pushed up overnight implied volatilities on Mexico’s peso in anticipation of price swings.
Elsewhere, Banks led broad-based declines in the Stoxx Europe 600 index. The MSCI AC Asia Pacific Index was little changed as South Korean shares advanced, while Hong Kong stocks fell. Nippon Telegraph & Telephone Corp. announced plans to turn its wireless carrier unit NTT Docomo Inc. into a wholly owned subsidiary in a $40 billion buyout. NTT Docomo shares surged by their limit at the close in Tokyo.
These are the main moves in markets:
Stocks
– The S&P 500 Index fell 0.5% as of 4 p.m. EDT.
– The Stoxx Europe 600 Index dipped 0.5%.
– The MSCI Asia Pacific Index was little changed.
Currencies
– The Bloomberg Dollar Spot Index declined 0.3%.
– Sterling rose 0.2% to $1.2866.
– The Japanese yen weakened 0.2% to 105.67 per dollar.
Bonds
– The yield on 10-year Treasurys fell less than one basis point to 0.65%.
– Germany’s 10-year yield dipped two basis points to -0.55%.
– Britain’s 10-year yield decreased two basis points to 0.18%.
– Italy’s 10-year yield declined three basis points to 0.85%.
Commodities
– West Texas Intermediate crude tumbled 3.8% to $39.04 a barrel.
Thai household debt rose to 80.1 per cent of gross domestic product in the first quarter of this year, up from 50.4 per cent in 2009, according to a study.
The high debt has adversely impacted economic growth while the Covid-19 outbreak has made it more challenging to solve the household debt problem and they have the potential to delay economic recovery, said the study by researchers at Bank of Thailand (BOT)’s Puey Ungphakorn Institute for Economic Research.
Over the past 10 years, more people are bearing a debt burden and the size of the debt has increased from Bt70,000 to Bt128,000 each (median value), according to the study released at BOT Symposium 2020 on Monday.
The share of bad debt/non-performing loans has decreased from 22 per cent to 16 per cent, which is considered still high. The median value of bad debt was Bt 65,000, up from Bt35,000 previously.
The study also found it astonishing that debtors who had started borrowing money at a young age continued to bear the burden even after retirement.
About 60 per cent of people aged 29 to 30 years old have debt. Among them, 25 per cent were in the bad-debt category. Pensioners still have debt, with median value of Bt70,000 to Bt80,000 per debtor.
Researchers believe the first-car scheme launched in 2011 was a major factor in the rising debt of urban residents. Farm subsidies, such as debt moratorium to support farmers also resulted in rising debt among people upcountry.
This suggested that a moratorium could not solve the debt issue.
The Covid-19 outbreak has worsened the situation and many are unable to service their debt.
Of the large number of people who had applied for financial aid under the central bank’s scheme between April and June, 71 per cent asked for temporary suspension of debt payment, 26 per cent demanded reduction of debt instalments and 3 per cent applied for debt restructuring as they were no longer able to repay the debt.
Those who applied for debt relief were concentrated in the lower-northeastern region covering Nakhon Ratchasima, Buri Ram, Surin, Si Sa Ket and Ubon Ratchathani provinces. About 40 to 60 per cent of applicants were personal loan borrowers followed by mortgages, while most of those in Bangkok and vicinity provinces, the South and upper North applied for restructuring of their bad debts or non-performing loans (NPLs).
Non-bank lenders represent a large share of debtors asking for debt relief. Most of the debts are hire-purchase loans. Should the coronavirus linger on, non-bank lenders would have high risk stemming from debt default, the researchers said. Each has debt of about Bt500,000.
In July when some financial aid expired, the study found that 2.1 million debtors exited the scheme, and they represented about 36.7 per cent of total debtors who received debt relief.
The study called for urgent actions to solve the rising household debt.
One proposal is to amend the bankruptcy law that will allow debtors to file for court protection and then they can start their lives anew after three years of the debt payment process, in the same manner as corporates currently applying for bankruptcy protection.
Reopening the country to foreign tourists would also boost economic activities, which could help many debtors as rising income would increase their debt payment capacity, the study said. But it will come with the risk of a new wave of virus infections, so the reopening for tourism must be managed carefully, the study said.
Concerned parties may need to apply different solutions for debtors in different regions, the study suggested.
The study is based on information collected from the National Credit Bureau Co, whose data base covers 23.1 million retail borrowers with combined debt of Bt 11.9 trillion, representing 88.3 per cent of the total household debt, and data from Bank for Agriculture and Agricultural Cooperatives.
The Cabinet on Tuesday approved the public debt management plan proposed by the Finance Ministry for fiscal year 2021 (October 2021 to September 2021), Government Spokesman Anucha Burapachaisri said.
The Finance Ministry’s Public Debt Management Office plans to borrow Bt1.3 trillion and manage existing debt totalling Bt387.5 billion.
The ministry said facilitating recovery of the economy hard hit by the Covid-19 pandemic and financial aid packages to support affected people and corporations had resulted in large budget deficits. The government also wants to borrow more to boost economic activities and its cash flow.
Should the government go ahead with the borrowing plan, public debt will jump to 57.23 per cent of gross domestic product, close to the sustainable level of 60 per cent of GDP. As of July 31, public debt stood at Bt7.6 trillion, or equivalent to 47.04 per cent of GDP, according to the Public Debt Management Office.
In related development, the Cabinet also approved a Bt1.51-trillion spending plan for 44 state enterprises for fiscal 2021.
Combined with other state enterprises’ spending, the expenditure of all 52 state enterprises would be Bt1.55 trillion of which capital spending is Bt432 billion. The capital spending is expected to boost economic growth, said Rachada Dhnadirek, deputy government spokeswoman.
The Cabinet agreed to increase the budget for the Bangkok-Nong Khai high-speed rail line, Phase 1, by another 12 billion.
The Cabinet also approved the setting up of a subsidiary to manage State Railway of Thailand (SRT)’s assets. The company is expected to earn more than Bt600 billion in 30 years, clearing all debts and making a profit.
The Cabinet agreed to revise the credit limit and draft an employment agreement and contract for rail, electrical and mechanical systems including purchase of trains and organising training of personnel, a complete version of the cooperation project between Thailand and China in developing a high-speed rail system to connect regions Bangkok – Nong Khai (Phase 1 Bangkok – Nakhon Ratchasima), deputy government spokeswoman Traisuree Taisaranakul said.
The budget has been increased from Bt38.55 billion on August 29, 2017, to Bt50.63 billion, including 7 per cent VAT, or an increase of Bt12.08 billion.
The increased budget covers:
1. Relocation of high-speed rail system works overlaid within the scope of construction works for Bt7.03 billion, which is the procurement of machinery and equipment for infrastructure maintenance, EMU facility, track welding and long track storage base.
2. Changing the EMU vehicle model from CRG2G (Hexie Hao) to CR Series (Fuxing Hao), a new model with better technology and performance, which increases the cost by Bt2.53 billion.
3. Modification from a ballast track to a ballastless track in the section between Bang Sue Station and Don Mueang Station, Ayutthaya station, Saraburi station, Pak Chong station, Nakhon Ratchasima station and inside the tunnel for easy maintenance and reducing future maintenance costs. It also maintains the image and scenery as well as tackkes pollution caused by road maintenance. The cost of changing the road structure will amount to Bt2.22 billion
4. Other expenses such as guarantee fee from defect from 1 to 2 years according to the regulations, operating fees and other expenses totalling Bt284.39 million.
The Cabinet also approved the setting up of a subsidiary company — Railway Asset Development Co Ltd — of the SRT to manage its assets, with a registered capital of Bt200 million, with approval for SRT to borrow Bt200 million as capital as well. The SRT will take responsibility for repaying the loan principal, interest and expenses, and the Ministry of Finance will be the loan guarantor, including considering the appropriate borrowing methods, conditions and details.
The Board of Investment (BoI) is planning to come up with several schemes to woo investors and help those affected by the Covid-19 outbreak, BoI secretary-general Duangjai Asawachintachit said on Tuesday.
She added that BoI will propose next month that its board consider adding clinical study as a new type of medical equipment business that can enjoy tax privileges. She said clinical study is one of the fundamentals of the medical equipment industry.
Applications for BoI tax support in the production of medical equipment has surged after it began offering certain additional benefits to investors in April.
The BoI offered these extra benefits to those who are committed to investing within this year and plan to sell more than 50 per cent of their products domestically.
Between May and August this year, BoI has received applications for investment worth Bt13 billion in the production of medical equipment.
The BoI will also propose the launching of measures to help investors retain their employees during the ongoing crisis.
BoI will also revise its smart-visa policy, making it easier to woo more foreign talent to work in Thailand.
Thailand’s smart-visa programme was launched to woo skilled workers, investors, executives and start-up entrepreneurs to work in targeted industries here.
The government’s Centre for Economic Situation Administration on September 16 approved in principle amendments to the criteria of granting smart visa to foreigners in a bid to woo more investment.
The value of the projects applying for BoI support during the first half of this year was Bt158 billion, down 17 per cent year on year. Duangjai believes investment will improve next year as Thailand’s economy has bottomed out.
The Finance Ministry’s spokesman Lavaron Sangsnit 
BoI secretary-general Duangjai Asawachintachit 
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