EconSep 30. 2020Deputy government spokesperson Ratchada Thanadirek
By The Nation
The Cabinet on Tuesday approved the Industry Ministry’s proposal to develop a smart park worth Bt2.37 billion in Rayong province, deputy government spokesperson Ratchada Thanadirek said.
The park will occupy 1,383 rai, 621 rai of which will be allocated for the industrial zone, 150 rai for the commercial zone, 373.35 rai for utilities and infrastructure, and 238.32 rai for the green buffer zone.
The park aims to woo advanced industries, such as robotics, aviation, digital and medical businesses.
She added the construction of the park’s infrastructure will take three years to complete, and it should be fully occupied within four years of completion.
The park is expected to generate a cash flow of Bt1.34 billion per year.
Shares in the cosmetics sector rose after dropping by 30 per cent year on year, but experts believe the boost is short-term from the news of the country reopening.
On Tuesday, the share price of Beauty Community (BEAUTY) rose by 14.78 per cent to Bt1.32 per share, Do Day Dream (DDD) rose by 6.81 per cent to Bt18.80 per share and Karmart (KAMART) rose by 11 per cent to Bt3.22 per share. However, the share prices of the three companies still contracted by 30 per cent from the end of last year.
BEAUTY’s net profit in the first six months of the year fell to Bt101.04 million from Bt116.32 billion in the same period of the previous year.
KAMART’s net profit over six months was Bt55.58 million, down 59.4 per cent year on year, while DDD’s net profit was Bt37.19 billion after facing losses for four consecutive quarters.
Tareetip Wongsaengpaiboon, senior president at Kasikorn Securities, said the share price of the three companies rose in response to the news of the government’s move to allow tourists to enter the country.
She explained that DDD and BEAUTY get more revenue from tourists than KAMART, but these companies still lack positive sentiment to boost their performance although they have adjusted their business strategy. So, it is necessary to see the number of tourists coming in after reopening the country.
“These companies need stronger positive sentiment, so we cannot advise investors during this time,” she said.
Recently, the Centre for Covid-19 Situation Administration agreed to allow six more groups of tourists to enter Thailand. Separately, an AirAsia flight carrying a group of 150 tourists from China’s city of Guangzhou will land in Phuket on October 8, while a Thai Smile Airways flight carrying another group of 126 flies to Bangkok on October 25.
On November 1, 120 tourists from Scandinavia and other European countries will arrive in Bangkok on a Thai Airways flight. These tourists will spend their first 14 days at alternative state quarantine sites in Chonburi, Buri Ram and Phuket.
Napon Jaisan, an asset analyst at Bualuang Securities, said if Bt23 million dividends from financial assets and Bt86 million net profit from fair value measurement are excluded, DDD would show a Bt44-million loss in the second quarter of this year compared to a Bt23-million profit in the same period of the previous year.
“Although DDD’s sales in the second quarter of this year were affected by the Covid-19 outbreak, Kuron sales were not affected by the said crisis, so it is considered a good decision that DDD acquired Kuron because it helped diversify the company’s risks,” he said.
“We expect DDD’s second-quarter performance to be its worst this year, but we advise investors to wait and watch because it is necessary to see a recovery in cosmetics demand and the tourism sector after reopening the country.”
An analyst at Tisco Securities expected BEAUTY to report Bt68 million in losses this year before rebounding with a Bt122-million net profit next year, adding that more than 28 per cent of the company’s revenue came from foreign countries, especially China.
The Covid-19 outbreak has delivered a triple shock to the developing East Asia and Pacific region (EAP) – the pandemic itself, the economic impact of containment measures and reverberations from the global recession, a World Bank report entitled “From Containment to Recovery: Economic Update for East Asia and the Pacific, October 2020” released on Tuesday said.
The EAP region, where the virus originated, has suffered less from the disease than other parts of the world. Countries that have contained the spread of the disease to date used a combination of stringent lockdown measures, extensive testing-based strategies and information programmes to encourage precautionary behaviour.
However, the pandemic and efforts to contain its spread have led to a significant curtailment of economic activity. Each country’s outcomes were generally related to how efficiently the disease was contained and how exposed they were to external shocks. Output in China, for instance, contracted by 1.8 per cent in the first half of this year, and by 4 per cent on average in the rest of the region.
Containment measures in some countries is leading to the revival of domestic economic activity, though the region’s economy is heavily dependent on the rest of the world. Trade is slowly beginning to revive as global economic activity gradually resumes, but tourism will remain subdued. Though short-term capital has returned to the region, global uncertainty still inhibits domestic and foreign investment. The capacity of financially strained governments to stimulate their economies is also limited.
The region as a whole is expected to grow only by 0.9 per cent this year, the lowest rate since 1967. While China is forecast to grow by 2 per cent in 2020 – boosted by government spending, strong exports and a low rate of new Covid-19 infections. However, checked by slow domestic consumption, the rest of the EAP region is projected to contract by 3.5 per cent.
Prospects for the region, however, will be brighter next year, with growth expected to be 7.9 per cent in China and 5.1 per cent in the rest of the region based on the assumption that of continued recovery and normalisation of activity in major economies, linked to the possible arrival of a vaccine.
However, output is projected to remain well below pre-pandemic projections for the next two years. The outlook is particularly dire for some highly-exposed Pacific island countries where output is projected to remain about 10 per cent below pre-crisis levels through 2021.
The Covid-19 pandemic is not just keeping people in poverty, but is also creating a class of “new poor”. The number of poor people in the region is expected to rise by as much as 38 million in this year, including the 33 million who would have otherwise escaped poverty and another 5 million pushed back into poverty, using a poverty line of US$5.50 a day.
The impact of the pandemic on employment and earning has been large and widespread. Sales in some EAP countries were 38 to 58 per cent lower in April-May this year, compared to the same period last year. Larger firms seem to be recovering faster than small and medium-sized enterprises – with SMEs both more vulnerable to the crisis and less able to adapt by going digital. Both wage employees and those working in family businesses have experienced a significant drop in come.
EAP governments have on average committed nearly 5 per cent of their GDP to improve health systems, help households to smooth consumption and help firms avoid bankruptcy. However, several countries are finding it hard to scale up their narrow social protection programmes, on which they previously spent less than 1 per cent of the GDP. Even with this increased spending, the report found that in some countries, assistance has reached less than one-quarter of households whose incomes fell and only 10-20 per cent of firms reported receiving help since the pandemic began.
School closures due to Covid-19 could result in a loss of 0.7 learning-adjusted years of schooling in EAP countries, and as a result, the average student in the region could face a reduction of 4 per cent in expected earnings every year of their working lives.
Covid-19 will have a lasting impact on inclusive longer-term growth by hurting investment, human capital and productivity. Public and private indebtedness, along with worsening bank balance sheets and increased uncertainty, are likely to inhibit investment and pose a risk to economic stability. Sickness, unemployment and school closures could lead to the erosion of human capital and earning losses that may last a lifetime. Firm closures and disruption in employer-employee relationships could hurt productivity by leading to a loss of valuable intangible assets. The disruption of trade and global value chains could hurt productivity by leading to a less efficient allocation of resources across sectors and firms and dampening the diffusion of technology.
Left unremedied, these consequences of the pandemic could reduce regional growth over the next decade by 1 percentage point per year. The poor will be disproportionately disempowered because of worsening access to healthcare, education, jobs and finance.
The Stock Exchange of Thailand (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.
In the morning session, an analyst at Krungsri Securities said he expected the index to rise to between 1,270 and 1,275 points, as investors were ready to take more risks for larger returns leading to a rise in global stock markets.
However, Therdsak Thaveeteeratham, Asia Plus Securities vice president for research, said the index has limited room to rise due to the Covid-19 outbreak and the domestic political situation, as student-led protesters are set to hold a rally in October.
This is despite the fact that US lawmakers have finally come to an agreement on economic stimulus measures.
The top 10 stocks with the highest trade value today were DELTA, PTT, CPALL, KBANK, AOT, BBL, STGT, MINT, ADVANC and CPF.
As of 4.30pm, the price of oil dropped by US$0.31 or 0.76 per cent to $40.29 per barrel, while gold rose by $6.90 or 0.37 per cent, to $1,889.20 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 23,539.10, up 27.48 points or 0.12 per cent.
China’s Shanghai SE Composite Index closed at 3,224.36, up 6.82 points or 0.21 per cent, while Shenzhen SE Component Index closed at 12,900.70, up 139.76 points or 1.10 per cent.
Hong Kong’s Hang Seng Index closed at 23,275.53, down 200.52 points or 0.85 per cent.
South Korea’s KOSPI Index closed at 2,327.89, up 19.81 points or 0.86 per cent.
Taiwan’s TAIEX Index closed at 12,467.73, up 4.97 points or 0.040 per cent.
The Stock Exchange of Thailand (SET) Index should rebound in the short term as there is limited room for it to rise, experts say.
The SET Index rose sharply on Monday after the market underwent correction for six consecutive days by 18.08 points or 1.45 per cent, closing at 1,263.02. Total transactions stood at Bt41.29 billion, most of which were mass buy-ups in energy and power plant shares.
As of 12am today, SET Index stood at 1,263.38, up 0.36 points or 0.03 per cent.
Koraphat Vorachet, director of research and investment at Capital Nomura Securities said the index rebounded after the US government decided to launch new economic relief measures, resulting in investors’ confidence on volatile asset investment.
He also said that investors began buying energy and power plant shares because their prices had dropped drastically. However, he believes SET has limited room to rise and that it will move sideways down between 1,245 and 1,275 due to lack of positive sentiment.
Therdsak Thaveeteeratham, Asia Plus Securities vice president of research, said SET rebounded technically because the political situation last week was not severe, while the index gained positive sentiment from the rise in Dow Jones Futures and strengthening the dollar, causing the cash to flow into volatile assets.
Like Koraphat, he too said the index has limited room to rise due to the Covid-19 outbreak and the domestic political situation, as student-led protesters are set to hold a rally in October. The index’s support line will stand at 1,250 and resistance line between 1,275 and 1,280.
Wikij Tirawannarat, director of individual customer research, expects the SET to rise by 10 per cent to 1,350 in line with foreign stock markets as it gained positive sentiment from hopes over US economic stimulus measures.
The Commerce Ministry is getting ready to issue a certificate for exporting 24,883 tonnes of rice to the European Union under zero tariff in October.
Kirati Ratchano, deputy director-general of the Department of Foreign Trade, revealed on Tuesday that on September 22, the European Commission issued a notification on the remaining quota for white rice (white rice, Thai jasmine rice, Thai fragrant rice and parboiled rice) for October without limitations of import duty. EU importers are required to apply for an import licence within the first 10 business days of October.
Thai rice exporters who want to exercise their right and benefit from the said quota have until October 14 to apply for an EU export certificate.
The Stock Exchange of Thailand (SET) Index dropped by 0.65 points, or 0.05 per cent, to 1,262.37 in the morning session on Tuesday.
An analyst at Krungsri Securities expected the index to rise to between 1,270 and 1,275 points as investors were ready to take more risks to gain increased returns, leading to a rise in the global stock market.
“Meanwhile, bank shares have shown signs of recovery for the first time amid the Covid-19 crisis,” he pointed out.
“Therefore, we expect the share price in the laggard group, such as bank and energy shares, to rise, while share prices in the leading group of electronics and agriculture are expected to slow down.”
He recommended investors buy:
> Bank stocks that have shown signs of recovery, such as KBank, SCB and BBL.
> Stocks that were involved in block trade, such as CBG, KTC and TKN.
> Stocks that benefit from a Covid-19 vaccine development, such as AOT, Centel, Mint and ERW.
The SET Index closed at 1,263.02 on Monday, up 18.08 points, or 1.45 per cent. Total transactions amounted to Bt41.29 billion, with an index high of 1,264.50 points and a low of 1,251.12.
The price of gold rose by Bt450 per baht weight in morning trade on Tuesday, the Gold Traders Association reported.
As of 9.24am, the buying price of a gold bar was Bt28,200 per baht weight and selling price Bt28,300, while gold ornaments cost Bt27,697.32 and Bt28,800, respectively.
At close yesterday, the buying price of a gold bar was Bt27,750 per baht weight and selling price Bt27,850, while gold ornaments cost Bt27,257.68 and Bt28,350, respectively.
The spot gold price moved to US$1,886 (Bt59,817.96) per ounce this morning after the price rose by $16 to $1,882.30 at close yesterday.
The gold price closed in positive territory from a weakening dollar and uncertainty over the Covid-19 pandemic, helping the precious metal as a safe-haven asset to become more attractive to investors.
Meanwhile, the Hong Kong gold price rose by HK$280, opening at $17,420 (Bt71,288.99) per tael this morning, the Chinese Gold and Silver Exchange Society reported.
The Asean-Canada free-trade agreement is expected to boost Thailand’s economic growth by 1.97 per cent, the Department of Trade Negotiations’ deputy director-general Duangathid Nithiutai said.
He was citing a region-based feasibility study conducted by the Economic Research Institute for Asean and East Asia.
Bilateral trade between Thailand and Canada last year stood at US$2.55 billion, of which $1.6 billion accounted for Thai exports. Key products exported to Canada include canned seafood, rice, computers and computer components.
By Syndication Washington Post, Bloomberg · Vildana Hajric, Claire Ballentine · BUSINESS U.S. stocks jumped after four weeks of declines and European shares added the most in three months amid broad gains for equities. The dollar weakened.
Banks led the S&P 500 Index to its biggest gain in two weeks as investors found buying opportunities after the gauge fell to its lowest since July last week. More than 10 stocks were higher on the benchmark for every one that fell. HSBC Holdings Plc added almost 9% after its biggest shareholder raised its stake, while an index of lenders rose the most a month. Shares also advanced in Asia.
Signs that U.S. politicians are moving toward new fiscal stimulus has been a boon to stocks in recent days, while the Federal Reserve continues to provide liquidity. Stronger economic reports from China also lifted investor sentiment, with data over the weekend showing profits at Chinese industrial companies grew for a fourth consecutive month in August.
“The Fed is making it almost impossible for you to get too bearish,” said John Porter, head of equities at Mellon Investments. “The market is getting more comfortable with the realization that Covid is going to be with us for a while now.”
The advance in global stocks was broad, instead of tech-focused, a sign that optimism about global growth and the end of pandemic lockdowns is returning. Still, equities remain on course for the first month of losses since March after investors sold overheated stocks and fears about a resurgence in the virus weighed on airlines and retailers.
“September certainly continued to challenge the intestinal fortitude of the bulls, but charting the S&P 500 from March shows the bull market remains very much intact,” said Chris Larkin, managing director of trading and investment product at E*Trade Financial Corp.
In emerging markets, the Turkish lira and Russian ruble weakened as fighting between Armenia and Azerbaijan curbed appetite for the currencies of their bigger neighbors.
Traders Get Fresh Reason to Sell Lira, Ruble as Neighbors Fight
These are the main moves in markets:
Stocks
– The S&P 500 Index gained 1.6% as of 4 p.m. EDT.
– The Stoxx Europe 600 Index climbed 2.2%.
– The MSCI Asia Pacific Index increased 1.3%.
– The MSCI Emerging Market Index climbed 1.1%.
Currencies
– The Bloomberg Dollar Spot Index fell 0.3%.
– The euro gained 0.3% to $1.1667.
– The British pound jumped 0.7% to $1.2834.
– The Japanese yen rose 0.1% to 105.49 per dollar.
Bonds
– The yield on 10-year Treasurys rose less than 1 basis point to 0.66%.
– Germany’s 10-year yield rose less than one basis point to -0.53%.
– Britain’s 10-year yield rose one basis point to 0.20%.
Commodities
– West Texas Intermediate crude rose 0.8% to $40.59 a barrel.
Deputy government spokesperson Ratchada Thanadirek 
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