The Stock Exchange of Thailand (SET) Index rose by 4.76 points, or 0.37 per cent, to 1,289.16 in the morning session on Friday (September 18).
An analyst at Krungsri Securities expected the index to fluctuate between 1,275 and 1,295 despite the oil price that rose over US$40 per barrel.
“The student protesters’ political rally tomorrow [Saturday] and the FTSE’s index rebalancing,which would be effective Friday evening, would cause volatility in the SET,” he said.
He recommended that investors buy:
▪︎ Stocks whose third-quarter performance will improve, such as TU, ASIAN, COM7, CHG, PTG and PLANB.
▪︎ Stocks that will benefit from the rising oil price, such as PTTEP, TOP and PTTGC.
The SET Index closed at 1,284.40 on Thursday (September 17), down 9.08 points or 0.70 per cent. The volume of total transactions was Bt46 billion with an index high of 1,292.42 and a low of 1,280.11.
The index fell in line with foreign stock markets due to uncertainty about the global economic recovery after the US Federal Reserve indicated it would maintain the interest rate at a low level for three years.
By Syndication Washington Post, Bloomberg · Vildana Hajric, and Claire Ballentine · BUSINESS, US-GLOBAL-MARKETS
U.S. stocks fell and Treasurys gained as investors mulled whether the levels of stimulus being provided is enough amid a gradual economic recovery.
U.S. stocks fell and Treasurys gained as investors mulled whether the levels of stimulus being provided is enough amid a gradual economic recovery.
The benchmark S&P 500 dropped for a second day, though it found some support after bouncing off its 50-day moving average. Technology shares were the biggest decliners, with Apple Inc., Facebook Inc. and Microsoft Corp. weighing on the Nasdaq Composite.
Investors snapped up long-term Treasurys, capturing a brief spike higher in yields following the Federal Reserve’s policy decision Wednesday. Although Fed Chair Jerome Powell said the central bank will remain accommodative after relaxing its inflation policy, he didn’t provide clarity as to just how high it can go and for how long. That, along with the lack of fresh details on the Fed’s plans for its bond-buying program, sparked long-end demand.
“It remains to be seen how the long-term projection of near zero interest rates and more free-flying inflation will actually play out for the economy,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial Corp. “The somewhat dour tone from the Fed could weigh on investors.”
Meanwhile, the number of Americans applying for jobless benefits resumed its decline. Continuing claims also fell by almost 1 million in the week ended Sept. 5.
All eyes remain on central bankers and their role in propping up economies still reeling from the coronavirus shock. Bank of England policymakers said they were exploring negative rates to counter ongoing risks to the labor market after voting unanimously to maintain their key interest rate at 0.1%, causing the pound to slide to an intraday low and pushing gilts higher. Earlier the Bank of Japan kept its asset-purchases and bond-yield targets in place.
Recent flare-ups of the virus and a fading post-pandemic recovery have renewed calls for more fiscal support as well. Fed officials have stressed in recent weeks that the U.S. recovery is highly dependent on the nation’s ability to better contain infections, and that further fiscal stimulus is likely needed to support jobs and incomes.
“Consumer sentiment data and the employment picture still reflect a fragile economic recovery,” said Matt Miskin, co-chief investment strategist at John Hancock Investments. “Powell did not bring up the need for further fiscal support multiple times yesterday just for the sake of it. Monetary policy has its limits, the lack of fiscal policy support leaves significant risks to this recovery.”
Elsewhere, crude oil climbed above $40 a barrel. Natural gas prices tumbled the most in almost two years after a bigger than expected increase in stockpiles revived concerns that the glut of the fuel will increase. Gold declined.
These are some of the main moves in markets:
Stocks
The S&P 500 Index declined 0.8% to 3,357.02 as of 4:02 p.m. EDT, the largest drop in a week.
The Dow Jones industrial average fell 0.5% to 27,901.71, the first retreat in a week.
The Nasdaq Composite Index fell 1.3% to 10,910.28, the largest drop in a week.
The Nasdaq 100 Index sank 1.5% to 11,080.95, the lowest in more than a week.
The Stoxx Europe 600 Index decreased 0.5% to 371.23, the first retreat in a week.
Currencies
The Bloomberg Dollar Spot Index sank 0.3% to 1,160.88, its fifth straight decline and the biggest dip in more than a week.
The British pound was little changed at $1.2971, the strongest in more than a week.
The euro increased 0.3% to $1.1847.
The Japanese yen appreciated 0.2% to 104.70 per dollar, the strongest in about six months.
Bonds
The yield on 10-year Treasurys fell one basis point to 0.69%, the biggest drop in a week.
The yield on 30-year Treasurys declined three basis points to 1.43%, the largest drop in a week.
Germany’s 10-year yield fell one basis point to -0.49%, the lowest in more than a week.
Britain’s 10-year yield dipped three basis points to 0.185%.
Commodities
West Texas Intermediate crude climbed 2.3% to $41.08 a barrel, the highest in two weeks.
Gold weakened 0.6% to $1,948.03 an ounce, the largest decrease in two weeks.
Natural gas fell 12.1% to $1.99 per mmBtu, the lowest in almost seven weeks.
Krungsri Asset Management believes technology shares will not hit the lowest point despite the mass sell offs when the Nasdaq Index rose sharply recently.
Nasdaq, which is mainly made up of technology shares, rose by 35.31 per cent on September 2, the highest since the beginning of the year.
The index then suffered mass sell-offs for three consecutive days, causing it to fall by approximately 10.34 per cent, led mainly by FANGMAN (+T) stocks, namely Facebook, Apple, Netflix, Google, Microsoft, Amazon, Nvidia and Tesla. The index on Thursday (September 17) remained in the negative territory.
Jaturan Sornvai, Krungsri Asset Management’s director of global investments, said technology shares will not enter a critical stage like the dotcom bubble crisis in 2001, because technology shares have good fundamentals and sustainable growth.
“Technology stocks were also able to escape the impact of Covid-19 because people needed to rely on technology in the ‘new normal’,” he said.
“Since growth in technology shares was higher than in other industries, and several investors bought these shares via Exchange Traded Funds or other mutual funds, the price of technology shares will rise further in the long term.”
Hence, he said, this is the right time to buy technology shares cheaply for long-term investment.
He added that there may be two reasons why investors decided to sell off their tech shares:
• Investors’ hope for a Covid-19 vaccine to be ready by September;
• Nasdaq Index went into correction mode to cope with volatility ahead of the US presidential election in November. Based on statistics, the US stock index is expected to fall for three months before the US elections.
In the short term, he said, the company believes the Nasdaq Index may opt for “risk-off” mode due to three factors:
• The price of gold and Nasdaq began moving in different directions, unlike before when the price of gold used to fall in line with the index;
• The Volatility Index (VIX) rose significantly from 26.57 on September 2 to 31.46 on September 8;
• The Dollar Index (DXY) fell continuously since March after the US Federal Reserve injected liquidity into the system via quantitative easing. The DYX rose recently from 92.73 on September 3 to 93.44 on September 8, proving that investors have returned to buying the dollar as a safe-haven asset, thereby strengthening the currency.
“Hence, the company believes these factors will cause cash to flow into safe-haven assets, while technology shares will suffer more volatility than before,” he added.
U.S. jobless claims resume drop in sign of gradual improvement
EconSep 17. 2020Pedestrians pass in front of customers sitting outside at a restaurant in in the Queens borough of New York on June 27, 2020. MUST CREDIT: Bloomberg photo by Amir Hamja. Photo by: Amir Hamja — Bloomberg Location: New York, United States
By Syndication The Washington Post, Bloomberg · Katia Dmitrieva
The number of Americans applying for jobless benefits resumed its decline, signaling a gradual improvement in the battered labor market.
Jobless claims in regular state programs decreased by 33,000 to 860,000 in the week ended Sept. 12, which coincides with the reference period for the government’s monthly jobs report, according to Labor Department figures released Thursday. Continuing claims, the total number of Americans on state benefit rolls, fell by almost 1 million, to 12.6 million, in the week ended Sept. 5.
Economists expected initial claims of 850,000 and continuing claims of 13 million, according to median estimates in a Bloomberg survey.
The decline in the number of Americans seeking financial help after losing work is a welcome sign that the economic rebound is still grinding forward despite a struggle to contain the coronavirus. At the same time, overall claims remain historically high, and the continuing stalemate over a new round of federal stimulus is squeezing millions of people after supplemental benefits expired in July and another temporary program started to run out of funds.
U.S. stock futures remained lower following the data, while 10-year Treasurys and the dollar maintained gains.
Federal Reserve Chairman Jerome Powell said Wednesday that while the central bank welcomes the drop in unemployment over the last four months, the jobless rate remains elevated at 8.4% and “we will not lose sight of the millions of Americans who remain out of work.” He spoke after the central bank signaled it would keep interest rates near zero for at least three more years.
Another positive sign in Thursday’s report: reported filings in a federal program called Pandemic Unemployment Assistance decreased for the first time in five weeks, to about 659,000 from 868,000, according to unadjusted figures. This program is available for those not usually covered in regular state programs, including the self-employed and gig workers.
The Stock Exchange of Thailand (SET) Index closed at 1,284.40 today (September 17), down 9.08 points or 0.70 per cent. The volume of total transactions was Bt46 billion with an index high of 1,292.42 and a low of 1,280.11.
During the morning session, an analyst at Krungsri Securities said he expected the index to fluctuate between 1,285 and 1,300 points.
The index gained positive sentiment from the US Federal Reserve’s move to maintain the interest rate at 0-0.25 per cent until 2023 and boost its gross domestic product forecast from minus 6.5 per cent to minus 3.7 per cent.
The price of oil rose more than 4 per cent as US oil stocks dropped by 4.4 million barrels, far more than the 1.8 million barrels expected by the market, while Hurricane Sally brought US oil production in the Gulf of Mexico down by as much as 27.5 per cent.
However, the analyst said the US Fed’s gloomy long-term economic forecast and the student-led political rally scheduled for Saturday (September 19) in Thailand will pressure the index.
The top 10 stocks with the highest trade value today were TASCO, KBANK, AOT, KCE, PTT, STGT, ADVANC, BBL, DELTA and MINT.
As of 4.30pm, the price of oil had dropped by US$0.25 or 0.62 per cent to $39.91 per barrel, while gold dropped by $25.20 or 1.28 per cent, to $1,945.30 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 23,319.37, down 156.16 points or 0.67 per cent.
China’s Shanghai SE Composite Index closed at 3,270.44, down 13.49 points or 0.41 per cent, while Shenzhen SE Component Index closed at 13,015.19, up 3.91 points or 0.030 per cent.
Hong Kong’s Hang Seng Index closed at 24,340.85, down 384.78 points or 1.56 per cent.
South Korea’s KOSPI Index closed at 2,406.17, down 29.75 points or 1.22 per cent.
Taiwan’s TAIEX Index closed at 12,872.74, down 104.02 points or 0.80 per cent.
People who lack regular income and access to financial services will be able to get digital personal loans of up to Bt20,000 under new Bank of Thailand (BOT) rules announced on Thursday.
BOT governor Veerathai Santiprabhob said that digital lenders will use records of utility bill payment, income or online shopping patterns to evaluate borrowers’ debt-payment capacity.
The loan providers must also apply technology for lending and debt collection, and disclose details such as interest rates, penalty rates, service fees and debt obligations.
Each customer can borrow up to Bt20,000 in total but the debt must be repaid within six months. Borrowers can use the loan for any purpose. The combined interest rate, fine and service fee must not exceed 25 per cent annually.
Digital personal loans would give people who lack regular income and collateral access to financial services, according to the central bank.
Digital lenders could propose their services to the BOT, said the bank.
The loans should help soften the economic impact of Covid-19 on the poorest section of the population.
The smartphone market was buzzing again after Apple announced it was launching new products, including Apple Watch Series 6, iPad Air 4 and iPhone 12 later this year.
The sale of smartphones had dropped after many countries went into lockdown due to Covid-19 and China, the main supplier, decided to hold off on smartphone production and delivery.
In the first quarter of this year, large smartphone distributors suffered as sales dropped. Sale of Samsung phones dropped by 22.7 per cent, Huawei by 27.3 per cent and Apple by 8.2 per cent. Things began picking up in the second quarter after countries began easing lockdown measures and Apple’s performance rose by 25 per cent.
Meanwhile in China, smartphone sales rose and demand for iPhone SE2020 and Apple One, which integrates all of Apple’s services in one app, increased, which had a positive effect on the shares of IT product distributors and IT electronic parts manufacturers.
In Thailand, Apple distributor Com7’s second-quarter profits stood at Bt275 million, down 6.7 per cent year on year due to lockdown, though demand for IT products rose as more people began working from home and schools started teaching online.
Smartphone and equipment distributor Jaymart made a profit of Bt265 million in the second quarter, the highest this year. Another IT products distributor, Synnex, made Bt166 million in the second quarter, marking a 40 per cent increase year on year.
An analyst at Finansia Syrus Securities said Hana Microelectronics had also benefited from the increase in smartphone sales as it is part of the smartphone and consumer product supply chain.
“Meanwhile, we expect Synnex’s profits this year and next year to rise by 6 per cent and 17 per cent year on year respectively thanks to the rise in demand for IT products and the launch of iPhone 12. Investors are advised to buy at a target price of Bt16 per share,” the analyst said.
The Stock Exchange of Thailand (SET) Index fell by 2.89 points, or 0.22 per cent, to 1,290.59 in the morning session today (September 17).
An analyst at Krungsri Securities expected the index to fluctuate between 1,285 and 1,300 points.
The index gained positive sentiment from the US Federal Reserve’s move to maintain the interest rate at 0-0.25 per cent for three years until 2023 and increase its Gross Domestic Product forecast from minus 6.5 per cent to minus 3.7 per cent.
Also, the price of oil rose more than 4 per cent as US oil stocks dropped by 4.4 million barrels, much more than the 1.8 million barrels expected by the market, while Hurricane Sally caused US oil production in the Gulf of Mexico to drop as much as 27.5 per cent.
However, the analyst said the US Fed’s gloomy long term economic forecast and the student political rally scheduled for Saturday (September 19) in Thailand will pressure the index.
He recommended investors buy:
> Stocks whose third-quarter performance would improve, such as TU, Asian, Com7, CHG, PTG and PlanB.
> Stocks that benefit from the rising oil price, such as PTTEP, Top and PTTGC.
The SET Index closed at 1,293.48 yesterday, up 7.30 points, or 0.57 per cent. Total transactions amounted to Bt52.70 billion, with an index high of 1,295.80 points and a low of 1,284.09.
The price of gold dropped by Bt200 per baht weight in morning trade today (September 17), the Gold Traders Association reported.
As of 9.26am, the buying price of a gold bar was Bt28,650 per baht weight and selling price Bt28,750, while gold ornaments cost Bt28,136.96 and Bt29,250, respectively.
At close yesterday, the buying price of a gold bar was Bt28,850 per baht weight and selling price Bt28,950, while gold ornaments cost Bt28,334.04 and Bt29,450, respectively.
The spot gold price moved to US$1,947 (Bt60,731) per ounce this morning after the price rose by $4.30 to $1,970.5 per ounce at yesterday’s close.
The gold price closed in positive territory yesterday from mass buy-ups in the precious metal after the US announced weak economic data.
The Hong Kong gold price dropped by HK$110, opening at $18,080 (Bt72,808) per tael this morning, the Chinese Gold and Silver Exchange Society reported.
By Syndication Washington Post, Bloomberg · Rita Nazareth, Claire Ballentine · BUSINESS Stocks fell amid a sell-off in technology companies and after Federal Reserve Chairman Jerome Powell’s remarks that he’s not sure if the faster-than-expected economic recovery will continue.
Earlier Wednesday, equities jumped to session highs after the Fed left rates near zero and signaled it would hold them there through at least 2023. Stocks wiped out gains amid a slide in giants such Adobe, Apple and Facebook. Treasurys fell after Powell stopped short of offering new specifics on the Fed’s approach to the monthly bond purchases that have buttressed markets, saying the program could be adjusted “to make it smaller, make it larger” or target different ares of the yield curve.
Fed officials have stressed in recent weeks that the U.S. recovery is highly dependent on the nation’s ability to better control the coronavirus, and that further fiscal stimulus is likely needed to support jobs and incomes. “The recovery has progressed more quickly than generally expected,” Powell said, while cautioning that “the path ahead remains highly uncertain.” It was the Federal Open Market Committee’s final scheduled meeting before the U.S. presidential election on Nov. 3.
“Rates are likely to remain at zero through 2023, but this does not alleviate the need for additional fiscal support,” said Adam Phillips, director of portfolio strategy at EP Wealth Advisors. “The ball is now in Washington’s court.”
The White House strongly signaled Wednesday that it is willing to increase its offer in talks with Democrats, and that Senate Republicans should go along to seal a stimulus deal in the next week to 10 days.
These are some of 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 increased 0.6%.
–The MSCI Asia Pacific Index climbed 0.5%.
Currencies
–The Bloomberg Dollar Spot Index fell 0.1%.
–The euro declined 0.4% to $1.18.
–The Japanese yen appreciated 0.4% to 104.99 per dollar.
Bonds
–The yield on 10-year Treasurys gained one basis point to 0.69%.
–Germany’s 10-year yield fell one basis point to -0.48%.
–Britain’s 10-year yield decreased one basis point to 0.211%.
Commodities
–The Bloomberg Commodity Index increased 0.7%.
–West Texas Intermediate crude jumped 5% to $40.18 a barrel.
Pedestrians pass in front of customers sitting outside at a restaurant in in the Queens borough of New York on June 27, 2020. MUST CREDIT: Bloomberg photo by Amir Hamja. Photo by: Amir Hamja — Bloomberg Location: New York, United States
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