The Stock Exchange of Thailand (SET) Index rose by 7.86 points, or 0.60 per cent, to 1,324.97 in the morning session today (August 25).
A stock analyst at Krungsri Securities expected the index to rise between 1,325 and 1,330 points after the US Food and Drug Administration approved the use of blood plasma to treat Covid-19 patients, adding that this treatment would reduce the death rate by as much as 35 per cent.
“Also, the market gained positive sentiment from a rising oil price after two storms moved through the Gulf of Mexico, resulting in a suspension of oil production,” the analyst said.
He recommended investors buy:
> Stocks that benefit from a weakening baht, such as CPF, GFPT, TU, Asian, KCE, Hana and Delta.
> Domestic play stocks, such as HMPro, Global, DoHome, Com7, CRC, JMT, CHG, BCH, PTG, PlanB and CBG.
The SET Index closed at 1,317.11 points yesterday, up 17.85 points, or 1.37 per cent. Total transactions amounted to Bt57.07 billion, with an index high of 1,318.20 and a low of 1,299.05.
Revenue Dept braces for huge hole in annual tax revenue
EconAug 25. 2020Ekniti Nitithanprapas, director general of the Revenue Department
By The Nation
Worried about a potentially sharp drop in tax income as the economy shrinks, the Revenue Department has urged people to file their tax returns before the August 31 deadline.
The department will fall short of its Bt2 trillion tax-collection target for the 2021 fiscal year (October 2020 to September 2021), said Ekniti Nitithanprapas, director general of the Revenue Department.
The announcement comes amid hot public debate over whether Thailand should spend Bt22.5 billion to buy two more submarines – a deal approved on Friday by a House subcommittee vetting the budget bill.
Ekniti said that this year’s revenue from personal and corporate income tax and corporate would be in line with the economic contraction. The targeted revenue of Bt2 trillion is based on a previous projection of 3.5 per cent economic growth this year.
“Every 1 per cent of economic contraction will reduce tax revenue by 1.1 per cent, and the economic outlook is on a downward trend with a new projection of 8-per-cent contraction,” said Ekniti.
Those figures would leave total tax revenue about Bt176 billion short of the target this year.
“Against this backdrop, we cannot meet the target, so the Finance Ministry’s Fiscal Policy Office must revise its tax revenue target for the 2021 fiscal year while we wait for the figure at the end of this month,” he said.
So far this year, 10 million of Thailand’s 11 million taxpayers have filed their tax returns, with 3 million people receiving total refunds of Bt33 billion. Meanwhile 200,000 out of 500,000 corporate taxpayers have submitted their returns and been refunded Bt30 billion.
“Both individuals and corporates must file tax returns within the deadline at the end of this month, with a penalty of 1.5 per cent of their bill if they fail to do so,” he said.
Those unable to meet their tax obligations will be allowed to pay in three instalments, he added.
The 2021 budget has been set at Bt3.3 trillion, against projected net revenue of Bt2.777 trillion, resulting in a deficit of Bt523 billion, or 2.8 per cent of GDP. The budget bill must now pass scrutiny and a vote in Parliament. A larger than expected revenue shortfall will lead to a larger budget deficit.
Investors are uncertain over the price of shares in energy producers after some launched moves to raise their capital, experts said.
The price of the six big power producers with market capitalisation over Bt50 billion – Gulf Energy Development (GULF), Global Power Synergy (GPSC), Energy Absolute (EA) Electricity Generating (EGCO), B Grimm Power (BGRIM) and Ratch Group (RATCH) – fell by an average 7.3 per cent last week before rebounding today (August 24).
Since the beginning of the year, share prices in the six firms have dropped an average of 16 per cent.
Sornchai Pitthayaprug, an analyst at Capital Nomura Securities, said the prices are dropping as investors question whether they are too high, especially after GULF announced moves to raise capital.
“In the previous year, the price of shares in power developers increased because investors believed they can generate consistent profit – until GULF announced it was increasing its capital,” he said.
“This caused uncertainty among investors over whether other power plant companies will move to increase capital.”
Investors are also worried about a possible decline in GPSCs’ third-quarter performance after it closed one power plant, as well as Thai Oil’s move to sell GPSC shares to PTT, Sornchai added.
“The market is concerned over whether Thai Oil sold GPSC shares at a reasonable price at Bt67 book value per share,” he said.
There is also uncertainty over the weakening baht, which the securities company predicts will fall to Bt32 per dollar within two weeks.
“However, we believe that investors won’t mind this factor, although the baht will weaken in the third quarter of this year,” he said.
“Normally, power plant stocks have an unrealised loss from currency exchange but this does not affect the companies’ cash flow. For example, companies faced currency exchange loss during the first quarter of this year, but they gained profit from currency exchange in the second quarter as the baht strengthened.”
He expected the performance of power plant companies to improve in the second half of 2020 on the first half and on the equivalent period last year.
“GULF, EGCO, BGRIM and RATCH will gain positive sentiment from new power plants, reduced closures for maintenance, and high gross profit,” he added.
“Considering the share value, we recommend investors buy RATCH and EGCO shares.”
Meanwhile, Jaroonpan Wattanawong, an analyst at Maybank Kim Eng Securities (Thailand), said the price of power generation shares dropped significantly last week from mass sell-offs by institutional investors, as well as moves by GULF and BCPG to increase capital.
“BGPG will raise capital by granting a discount of 25 per cent and warrants to raise funds for investment in a wind power plant in Laos,” he said.
“Experts said power plant companies are increasing their capital now because the economy is expected to worsen next year, resulting in negative sentiment on the stock market and difficulties in raising funds.”
He added that if the situation worsens, institutional investors with large stockholdings in energy generators would sell these stocks first.
“Given energy generators’ price to earnings ratios, the price of power plant shares is very high,” he added.
The Stock Exchange of Thailand (SET) Index closed at 1,317.11 today (August 24), up 17.85 points or 1.37 per cent. Total transactions amounted to Bt57.078 billion with an index high of 1,318.20 and a low of 1,299.05.
In the morning session, a stock analyst at Krungsri Securities expected the index to fluctuate between 1,290 and 1,310 due to lack of positive sentiments.
“Also, investors would delay trading to follow the US Federal Reserve’s forecast on economic and monetary policy direction, while the index will be under pressure from the domestic political situation,” he said.
The 10 stocks with the highest trade value today were MINT, AOT, STGT, KBANK, PTT, JMART, KCE, CPALL, BAM and CRC.
As of 4.30pm, the price of oil rose by US$0.33 or 0.78 per cent to $42.67 per barrel, while gold rose by $8.30 or 0.43 per cent, to $1,955.30 per ounce.
Other Asian indices were on the rise:
Japan’s Nikkei Index closed at 22,985.51, up 65.21 points or 0.28 per cent.
China’s Shang Hai SE Composite Index closed at 3,385.64, up 4.96 points or 0.15 per cent, while the Shenzhen SE Component Index closed at 13,666.69, up 188.69 points or 1.40 per cent.
Hong Kong’s Hang Seng Index closed at 25,551.58, up 437.74 points or 1.74 per cent.
South Korea’s KOSPI Index closed at 2,329.83, up 25.24 points or 1.10 per cent.
Taiwan’s TAIEX Index closed at 12,647.13, up 39.29 points or 0.31 per cent.
The Office of Small and Medium Enterprise Promotion along with the Small and Medium Enterprise Development Bank of Thailand jointly launched the second round of “SMEs One” loans for small enterprises today (August 24).
A fund of Bt4.89 billion had been earmarked for loans for small enterprises in June, and so far, Bt3.7 billion has been approved for eligible applicants in the first round.
The remaining Bt1.2 billion will be used in the second round.
Loans in the first and second phase will be granted to applicants next month and at the end of the year, respectively.
The SMEs One loan carries a 1 per cent per year interest rate with a maximum of Bt500,000 allocated per person. The instalment period is seven years with a maximum of one year grace period for principle repayment.
Automaker Nissan has closed its factory in Indonesia and plans to make Thailand its lone manufacturing base in Asean with a long-term business plan, Suriya Juangroongruangkit, Minister of Industry, revealed.
The minister was speaking after discussions with Ramesh Narasimha, president of Nissan Motor (Thailand) Co, about Nissan closing its factory in Indonesia to consolidate the production base for export in Thailand, its only base in the Asean region.
Recently, the company launched Nissan Kicks, a 100 per cent electric car without charging which brings the new e-Powers technology to the cars manufactured in Thailand.
In addition, the company has announced a long-term business plan in Thailand for both hybrid car manufacturing and electric cars, which has been approved by the Board of Investment. This shows investor confidence in the direction and policy of the government’s automotive industry development, Suriya said. This will benefit employment and the economy of Thailand further, he added.
As for measures to support the production of electric cars in Thailand, the Ministry of Industry has reassured on car procurement for executives in government agencies and state enterprises. The ministry has assigned relevant agencies to discuss with the Budget Office to further define the characteristics of electric vehicles which will allow government agencies to purchase electric cars for use.
Other measures to support electric vehicles, such as additional benefits for people who buy electric vehicles, etc will be discussed and pushed under the National Electric Vehicle Policy Committee to enable Thailand to achieve its goal of becoming the world’s major electric vehicle production base, Suriya said.
The Stock Exchange of Thailand (SET) Index rose by 3.67 points, or 0.28 per cent, to 1,302.93 in the morning session on Monday (August 24).
A stock analyst at Krungsri Securities expected the index to fluctuate between 1,290 and 1,310 due to lack of positive sentiments.
“Besides, investors would delay trading to follow the US Federal Reserve’s forecast on economic and monetary policy direction, while the index would be under pressure from the domestic political situation,” he said.
He recommended that investors buy:
▪︎Stocks that benefit from the weakening baht, such as CPF, GFPT, TU, KCE, HANA and DELTA.
▪︎Domestic and defensive play stocks, such as ADVANC, INTUCH, HMPRO, GLOBAL, DOHOME, COM7, CRC, JMT and CHG.
The SET Index closed at 1,299.26 on Friday, up 2.47 points or 0.19 per cent. Total transactions amounted to Bt42.295 billion with an index high of 1,307.64 and a low of 1,296.68.
The price of gold dropped by Bt50 per baht weight in morning trade on Monday (August 24), the Gold Traders Association reported.
As of 9.29am, the buying price of a gold bar was Bt28,800 per baht weight and selling price Bt 28,900, while gold ornaments cost Bt28,288.56 and Bt29,400.00, respectively.
At close on Saturday, 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 Comex (Commodity Exchange) gold price for delivery in December rose by US$0.5, or 0.1 per cent, to $1,947 (Bt61,502.40) per ounce at Friday’s close (August 21).
Gold price rose slightly after falling for two consecutive days from mass buy-ups amid uncertainty over the US presidential election and the Covid-19 pandemic.
Thai mattress manufacturers are among exporters suspected by the US of dumping practices.
The Thai Foreign Trade Department revealed that the US has opened anti-dumping (AD) investigation against suppliers from seven countries, including Thailand. The action was initiated after US manufacturers called for an inquiry as they found additional imports were damaging their business.
Meanwhile, as part of the investigation into tyres imported from four countries, including Thailand, the manufacturers have to answer a questionnaire and return it before September 4.
The Thai Foreign Trade Department’s director-general, Keerati Rushchano, said the US Department of Commerce had recently announced the opening of an investigation into mattress products originating from seven countries: Thailand, Vietnam, Indonesia, Malaysia, Cambodia, Serbia and Turkey. The investigation follows a complaint by US mattress makers that the volume of imports from all seven countries had increased, likely due to dumping in the US market, affecting product price. US manufacturers have complained about declining market share, declining sales, declining profits, etc. In addition, an inquiry for countervailing duty (CVD) measures for mattresses from China has also been opened.
“The US Department of Commerce will send a questionnaire to the Thai mattress manufacturers. After discussions with Thai mattress manufacturers, it was found that if US were to take AD measures, it would be unfair since Thai mattresses exported to the US have many purposes, such as health mattresses, mattress for preventing back pain, etc which US manufacturers may not be making, or whose production is not enough to meet rising consumer needs,” said Keerati.
In 2018, Thailand exported 75,000 pieces worth Bt40 million, but in 2019 the volume increased sharply to 830,000 pieces, valued at Bt1.9 billion.
The US Department of Commerce opened an investigation into antidumping and countervailing duties (AD/CVD) on tyre products originating from four countries — Thailand, South Korea, Vietnam and Taiwan — as of May 2020. According to the US steel trade union’s complaint, imports rose 20 per cent between 2017 and 2019, or 85.3 million tyres, worth $4.4 billion, possibly as a result of dumping. The US authorities have selected two manufacturers from each of the four countries to answer a questionnaire about production data, exports, sales, profits, etc, which must be completed by September 4.
The private sector will propose four measures to boost the eastern region’s economy to the mobile Cabinet meeting in Rayong on August 24-25.
The proposals will be put forward by the Thai Chamber of Commerce, East Region, as ministers meet in Rayong, the heart of the government’s flagship Eastern Economic Corridor infrastructure project.
The first measure covers improvement of regional tourism and linking roads along the coast, while the second is for development of infrastructure, said Pratya Samalapa, who chairs the chamber’s committee on eastern region economic development.
The third is for new water resources, while the fourth aims to boost quality of life by upgrading hospitals in Rayong and Chonburi.
Ekniti Nitithanprapas, director general of the Revenue Department
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