Stock prices of Jaymart (JMART) and its subsidiary JMT Network Services (JMT) fell sharply in the morning session on Friday after they announced they were increasing their capital.
As of 11.01am, JMART’s stock had dropped by Bt1.30 or 8.44 per cent to Bt14.10 per share, while JMT fell by Bt2 or 6.20 per cent to Bt30.25.
JMART will offer 362.64 million additional ordinary shares to existing investors and a limited group, as well as issuing up to Bt3 billion in bonds, while JMT will offer 464.31 million ordinary shares, 107 million of which will be offered via warrants to existing investors and a limited group of investors.
An analyst at Capital Nomura Securities said JMART’s move to boost capital will pressure its stock price in the short term.
“JMART’s Interest-Bearing Debt to Equity Ratio (IBD/E) is currently 2.6 times, but we expect the company will be able to generate revenue from a joint venture with Korean partners in J fintech within this year.”
The analyst said their securities company had not adjusted its forecast for JMART’s performance, but it may be changed next week.
Central bank urges market participants to be ready for end of Libor
EconSep 11. 2020Vachira Arromdee, assistant governor of the central bank’s financial markets operations group
By The Nation
The Bank of Thailand (BOT) has said that the Libor cessation process is both fair and transparent, adding that market participants should be ready for the upcoming change.
Libor, or the London Interbank Offered Rate, is a global key benchmark interest rate that indicates borrowing costs between banks.
Vachira Arromdee, assistant governor of the central bank’s financial markets operations group, said the termination of Libor at the end of 2021 will bring major change to global financial markets. For Thailand, the discontinuation of Libor poses a significant concern given that US-dollar Libor is used to calculate the Thai baht interest rate fixing (THBFIX), which is widely used as a reference rate for various financial products in Thailand.
As a result, the BOT will need to cease producing and publishing the THBFIX rates. Libor’s end will also affect the Thai financial market directly through Libor-referenced financial transactions and indirectly through the THBFIX-referenced financial transactions. Though there is a large volume of THBFIX-referenced financial transactions, both cash and derivative products, the impacts of THBFIX’s cessation is expected to be limited. This is because THBFIX-linked loans are proportionately small in comparison to the overall loans, and borrowers are normally capable of adapting to the transition. As for THBFIX-linked derivatives market, the key players are institutional clients which have the capacity to manage the change.
To prepare for THBFIX’s end next year, the BOT will produce the fallback rate for THBFIX (Fallback THBFIX), which it expects to be comparable to THBFIX and used mainly as the fallback rate in THBFIX legacy contracts. At the same time, the BOT has asked all commercial banks to set up a team to manage the transition in a planned and orderly manner. The BOT will closely monitor the progress of Libor-linked and THBFIX-linked contract amendments of all commercial banks. At the same time, the BOT will commence work in various areas to ensure smooth transition.
The central bank has also collaborated with market participants to develop Thai Overnight Repurchase Rate (Thor) as a new reference rate, which reflects local financial market conditions. Recently, Thor has started being used. Going forward, the BOT will put in place a phased development timeline to promote the widespread usage of Thor.
The BOT advises those who have THBFIX-linked loans, bonds or derivatives that will mature after 2021 to study and understand Fallback THBFIX and consult with their banks to amend the reference rate in THBFIX legacy contracts to Fallback THBFIX. It is recommended that contract amendments should be done before the end of 2021. Also, Thor should be studied as it will be the new reference rate of Thai financial market.
The Stock Exchange of Thailand (SET) Index fell by 0.27 points or 0.02 per cent, to 1,290.62 in the morning session today (September 11).
An analyst from Krungsri Securities said he expected the index to fall between 1,280 and 1,285 due to lack of positive sentiment.
“The index is also under pressure from the direction foreign indices are taking, falling price of oil and uncertainty over the political situation as student protesters vow to go ahead with their September 19 rally as planned,” the analyst said.
He recommended that investors buy:
• Stocks whose third-quarter performance will improve, such as TU, Asian, Com7, CHG, PTG, PlanB, Tasco and EPG.
• Stocks that benefit from the launch of a new iPhone model on September 15, such as Com7, Synex and SPVI.
SET Index closed at 1,290.89 on Thursday, down 2.51 points or 0.19 per cent. The volume of total transactions stood at Bt42.183 billion with an index high of 1,298.33 and a low of 1,286.15.
SET closed in negative territory yesterday due to uncertainty over the second Covid-19 wave and domestic political situation.
The price of gold was unchanged in morning trade on Friday, the Gold Traders Association reported.
As of 9.26am, the buying price of a gold bar was Bt28,750 per baht weight and selling price Bt28,850, while gold ornaments were priced at Bt28,227.92 and Bt29,350, respectively.
The price of gold rose by Bt200 per baht weight at close on Thursday. The association announced changes in the precious metal’s price seven times.
Hong Kong gold price rose by HK$40, opening at $18,010 (Bt72,716.94) per tael on Friday morning, the Chinese Gold and Silver Exchange Society reported.
Spot gold price moved to US$1,946 (Bt60,888.41) per ounce on Friday morning after the price rose by $9.4 to $1,964.3 per ounce at close on Thursday.
Gold gained positive sentiment from the weakening dollar and the European Central Bank’s resolution to maintain the interest rate and bond purchase limit during the meeting yesterday.
Mortgage rates slide to record-low 2.86% for 30-year loans
EconSep 11. 2020A potential home buyer is reflected in a mirror during an open house in Columbus, Ohio, on Dec. 3, 2017. MUST CREDIT: Bloomberg photo by Ty Wright.
By Syndication Washington Post, Bloomberg · John Gittelsohn · BUSINESS, US-GLOBAL-MARKETS
Mortgage rates in the U.S. dropped to another record low, adding fuel to a housing market that’s been a key source of strength for the pandemic economy.
The average for a 30-year, fixed loan was 2.86%, down from 2.93% last week and the lowest in almost 50 years of data-keeping by Freddie Mac. It was the ninth time since the coronavirus started roiling financial markets that rates fell to a new low. The previous record, 2.88%, was reached in early August.
Cheap mortgages have ignited a housing rebound, driving sales of both new and existing homes and putting money back into the pockets of borrowers who have been able to refinance.
Still, the rally faces challenges from persistent job losses and an inventory shortage that’s pushing up prices, reducing the pool of people who can afford to buy a house.
“Heading into the fall, it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity,” Sam Khater, Freddie Mac’s chief economist, said in a statement Thursday.
Mortgage rates dipped below 3% for the first time in July and have continued sliding as the Federal Reserve keeps its benchmark rate near zero.
Based on the yield for 10-year Treasuries, which typically guides mortgage rates, borrowing costs could continue sliding, according to Tendayi Kapfidze, chief economist at LendingTree.
“If the spread narrows to where it was before Covid, it can go as low as 2.3%,” he said.
The lower borrowing costs have led to a flood of applications for refinancing and new purchase loans, particularly as Americans look for more space for home offices and remote learning.
Nearly 18 million homeowners with good credit and at least 20% equity stand to cut at least 0.75% off their current rate by refinancing, according to a report this week by Black Knight Inc.
There was pent-up demand for housing when the pandemic hit, with millennials aging into homeownership. But with some sellers reluctant to homes on the market, inventory has been tight.
That’s helped prop up homebuilders, which saw their shares hammered when the coronavirus shut down the U.S. economy. An index that tracks the industry has gained nearly 150% since the stock market hit a bottom on March 23 and is trading close to a record high.
The question is if the housing boom can continue amid the economic fallout from the pandemic. Some potential buyers, eager to take advantage of low rates, might not get approved for loans, while higher prices are exacerbating the shortage of affordable housing.
Higher home prices are starting to erode the benefits of cheaper mortgages, according to George Ratiu, senior economist at Realtor.com.
“For many young, first-time buyers, the shift is reducing affordability, just as they are ready to embrace homeownership,” he said.
By Syndication Washington Post, Bloomberg · Claire Ballentine, Katherine Greifeld · BUSINESS A fresh sell-off in megacap technology shares sent stocks to the fourth loss in five days as investors remain worried that valuations stretched too far in a five-month rally. Treasurys rose with the dollar.
The S&P 500 dropped as much as 2%. Volatility has been even more prevalent in the Nasdaq 100, where close-to-close runs have been at least 1% for seven sessions. Energy companies, a small cohort in major averages, plunged as crude dropped back toward $37 a barrel in New York.
Treasurys reversed losses as the equity decline picked up speed. Gold advanced, while copper tumbled. The dollar strengthened versus major peers.
Volatility continued to grip American financial markets after a rally that added $7 trillion to U.S. equity values over five months. Reasons for caution were plenty, though no single factor alone set the tone. Signs mounted that the pandemic continues to upend the global economy. In the U.S., data showed cracks in recent labor-market strength, while Europe re-emerged as a virus hot spot. Congress remained far apart on a fresh relief bill.
“We likely have not seen the full correction play out yet,” said Matt Forester, chief investment officer at BNY Mellon Lockwood Advisors. “It’s difficult to point to a specific catalyst, but currency volatility rose today on concerns about a hard Brexit and we’ve seen some worse news about the virus in Europe.”
In Europe, the pound fell amid renewed Brexit tensions. The euro jumped 0.7% the region’s central bank was said to agree that there’s no reason to overreact to the currency’s strength. BP Plc slipped after making its first venture into offshore wind power with a $1.1 billion purchase of U.S. assets from Norway’s Equinor ASA.
After a volatile few days, technology stocks are still front and center with a fragile rally under threat. Monday,, the S&P 500 rose the most since June overnight and the Nasdaq rebounded following an 11% rout that took the gauge down to its 50-day moving average, a closely-watched technical level.
“It is too early to declare that the growth rally has ended, but this week should be a reminder for investors that while the exuberance remains, the storm is never far away,” Geir Lode, head of international global equities at Federated Hermes, wrote in a note to clients.
These are the main moves in markets:
Stocks
– The S&P 500 Index fell 1.6% as of 2:45 p.m. EDT.
– The Nasdaq 100 lost 2.1%.
– The Stoxx Europe 600 Index declined 0.6%.
– The MSCI Asia Pacific Index advanced 0.7%.
– The MSCI Emerging Market Index increased 0.4%.
Currencies
– The Bloomberg Dollar Spot Index rose 0.2%.
– The euro gained 0.2% to $1.183.
– The British pound fell 1.6% to $1.277.
– The Japanese yen was flat at 106.15 per dollar.
– The offshore yuan was little changed at 6.8315 per dollar.
Bonds
– The yield on 10-year Treasurys fell two basis points to 0.68%.
– The yield on two-year Treasurys fell two basis points to 0.1389%.
– Germany’s 10-year yield jumped two basis points to -0.44%.
– Britain’s 10-year yield gained one basis point to 0.247%.
– Japan’s 10-year yield dipped less than one basis point to 0.028%.
Commodities
– West Texas Intermediate crude declined 0.6% to $37.53 a barrel.
Urgent 2-year Covid recovery plan set for Cabinet approval
EconSep 11. 2020Danucha Pichayanan, deputy secretary-general of the National Economic and Social Development Council (NESDC)
By The Nation
The National Strategy Plan has been redrafted with urgent changes to drive economic recovery after the Covid-19 crisis, the planning agency said on Thursday.
The revised plan for 2021-2022 will be proposed to Cabinet next week, said Danucha Pichayanan, deputy secretary-general of the National Economic and Social Development Council (NESDC).
The so-called Special Strategy Master Plan focuses on foundations to support economic recovery and transformation by ensuring people have jobs to survive, vulnerable groups are cared for, and local communities have employment and opportunities.
The new draft master plan features three frameworks – coping, adapting, and transformation for sustainable growth – in four areas of development: Local economy, future growth, human capital, and enabling factors.
Danucha said the national strategy would be revised again in 2022.
Meanwhile new members have been appointed to posts in the National Strategy Management Committee, which is responsible for writing the strategy.
The security post has been taken by National Security Council secretary-general Gen Somsak Rungsita.
Tasked with building competitiveness is former Industry Minister Atchaka Sibunruang.
Human resources goes to Kritsanapong Keeratikorn, chairman of the Research Fund Policy Committee.
Opportunity creation and social equality is the responsibility of Enu Susuwan, from the board of Learning Institute For Everyone (LIFE).
The panel’s Environment chair goes to Thanawat Jarupongsakul, a geology academic, while government management systems goes to Pongpayom Wasa-puti, a former Interior Ministry permanent secretary.
Sakchai Peechapat, a Thai Bankers Association executive, said Thursday’s National Strategy Committee meeting focused on ways to boost recovery of the grass-roots economy.
The government will spend Bt1.9 billion from the 2021 budget to boost organic farming in Thailand. The money will fund development of 209 agricultural projects, government deputy spokesperson Ratchada Thanadirek announced on Thursday.
The committee tasked with promoting organic agriculture also endorsed an organic action plan for 2017-2022, she added.
The plan calls for collaboration between seven ministries to achieve three goals for the organic sector: R&D for agriculture, creation of new products and services, and developing markets for the products.
Ratchada said the global market for organic produce is worth more than US$100 billion (Bt3.1 trillion) and is growing at a rate of 20 per cent per year.
The key organic markets are Europe, North America, China, Australia and Southeast Asia. The organic market in Thailand is worth about Bt3 billion annually.
SRT Electrified Train Co Ltd (SRTET), operator of the Airport Rail Link, is seeking approval from the State Railway of Thailand (SRT) to reduce fares from Phya Thai to Suvarnabhumi Airport for three months from October onwards.
The first low-fare promotion expired in June this year.
SRTET president Suthep Pangpeng said the aim was to ease the cost of living for people in line with Transport Minister Saksayam Chidchob’s policy.
SRT board is expected to consider the proposal this month.
The proposal is to cut fares from between Bt15-Bt45 to Bt15-Bt25 for Smart Pass holders (adults) during the off-peak hours of 5.30am to 7am, 10am to 5pm and 8pm to midnight on weekdays.
Passengers travelling to one station will be charged Bt15, two stations Bt20, while a flat rate of Bt25 will be applied to travel beyond three stations.
Transport Ministry accelerates study on South land bridge project
EconSep 11. 2020Transport Minister Saksayam Chidchob
By The Nation
Transport Minister Saksayam Chidchob is calling on the Office of Transport and Traffic Policy and Planning to complete the feasibility study on the “southern land bridge” project linking the Gulf of Thailand and Andaman Sea within a year.
The project also includes the development of a deep-sea ports in Chumphon and Songkhla provinces, a double-track railway between Chumpon and Ranong as well as a motorway.
Saksayam said his ministry will study investment options for the project, which should be on a public-private partnership basis.
He said bids will be called for the project in its entirety, not separately, adding that the combined value of the project is estimated at Bt100 billion.
Prime Minister Prayut Chan-o-cha had said that he wants this land-bridge project to be another new economic engine like the much-touted Eastern Economic Corridor.
Meanwhile, National Economic and Social Development Council secretary-general Thosaporn Sirisamphand said this project is part of the government’s master plan for the economic development of the South.
Danucha Pichayanan, NESDC deputy secretary-general, said the project development will be based on existing facilities, including the deep-sea port in Ranong. A similar port will be developed in Chumphon and linked to the one in Ranong with a double-track railway.
The railway, which is expected to cost Bt45.84 billion, will be 108 kilometres long and feature nine stations.
Danucha said the council will visit the areas between Chumphon and Ranong to hear people’s opinions about the project.
Vachira Arromdee, assistant governor of the central bank’s financial markets operations group 
A potential home buyer is reflected in a mirror during an open house in Columbus, Ohio, on Dec. 3, 2017. MUST CREDIT: Bloomberg photo by Ty Wright. 
Danucha Pichayanan, deputy secretary-general of the National Economic and Social Development Council (NESDC) 
Government deputy spokesperson Ratchada Thanadirek 
Transport Minister Saksayam Chidchob 
SootinClaimon.Com 