SET up on hopeful Covid situation but index won’t be in for a smooth ride
The Stock Exchange of Thailand (SET) Index rose by 11.06 points or 0.70 per cent to 1,593.13 on Tuesday morning.
Krungsri Securities expected the index would move to between 1,590 and 1,600 points on Tuesday on hopes that the lockdown would be eased as domestic Covid-19 cases were seen to be declining.
It added that the index also gained positive sentiment from expectation that the US Federal Reserve would delay tapering of its quantitative easing programme due to a decline in the Purchasing Managers’ Index, as well as the rising oil price.
“However, the index would be under pressure due to mass sell-offs of shares to prevent risks before the Fed’s annual meeting,” Krungsri Securities said.
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It recommended selective buying of the following companies’ shares as an investment strategy:
▪︎ AOT, CPN, CRC, HMPro, AAV, BA, Mint, Centel, Amata and WHA, which would benefit from the country reopening.
▪︎ PSL, TTA and RCL, which would gain from a rise in the freight rate.
▪︎ Hana, KCE, TU, CPF, GFPT, Asian, EPG and NER, which benefit from a weakening baht.
The SET Index closed at 1,582.07 on Monday, up 28.89 points or 1.86 per cent. Transactions totalled THB114.58 billion with an index high of 1,583.13 and a low of 1,565.93.
Baht likely to fluctuate until Covid situation becomes lucid: market strategist
The baht opened at 33.25 to the US dollar on Tuesday, strengthening from Monday’s closing rate of 33.35.
The Thai currency is likely to move between 33.20 and 33.35 during the day, Krungthai Bank market strategist Poon Panichpibool said.
Poon explained that investors have changed their view of the Covid-19 situation, which led to the weakening of the dollar.
The baht may strengthen in the short term on hopes that the situation in Thailand was likely past its worst point, he said.
However, Poon believed the baht was likely to fluctuate and weaken as the situation was not clearly better. The baht has of course also been affected by the strengthening dollar.
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The Thai currency might slow down when it comes close to its support level of 33.00-33.10 to the US currency, the price range importers are waiting for to exchange their dollars, he said.
The baht will not strengthen much below 33 to the dollar as investors are buying up the US currency as the month draws to a close.
If the situation worldwide does not improve with the US Federal Reserve’s move to reduce quantitative easing (QE), stock prices might be affected, Poon noted.
Foreign investors will temporarily decrease investments in Asian emerging markets as they might be worried about the effects of a reduction in QE, much like the QE “taper tantrum” in 2013, he added.
U.S. equities rose Monday as the covid-19 immunization drive was bolstered by U.S. regulators granting full approval for the vaccine made by Pfizer Inc. and BioNTech SE.
The S&P 500 and Nasdaq 100 rebounded from lows last week as the approval could lead to more vaccine mandates amid a surge in delta variant cases that has threatened the momentum of the global economic recovery. Mixed U.S. data Monday showed July home sales coming in higher than expected while growth at U.S. services and factories slowed to an eight-month low.
Energy shares led the gains as oil rose above $65 a barrel in New York on improving sentiment. Treasuries were little changed and the dollar was weaker as investors also looked ahead to the Jackson Hole symposium Thursday, which may offer insights into how and when the Federal Reserve plans to taper bond purchases.
“Amid another record high last Monday it’s remarkable that we’re looking to start the week yet again on the upside,” said Chris Larkin, managing director of trading at E*Trade Financial. “The gains last week couldn’t make up for the losses following the Fed confirming its intentions to taper its purchasing program. All eyes will remain on the Fed as investors will be looking for more guidance on the taper from Powell’s speech at Jackson Hole.”
Dallas Fed President Robert Kaplan said he’s open to adjusting his view that the Fed should start tapering its asset-purchase program sooner rather than later, if the delta strain persists. Meanwhile, Treasury Secretary Janet Yellen endorsed Jerome Powell for a second term as Fed chair, a move that could reduce uncertainty about the path for monetary policy.
“Solid economic and corporate profit growth, in conjunction with a still-accommodative Fed, means that the environment for stocks remains favorable,” said David Lefkowitz, head of equities Americas at UBS Global Wealth Management. “As a result of our higher EPS estimates, we raise our targets for the S&P 500 for December 2021 by 100 points to 4,600 and June 2022 by 150 points to 4,800. We initiate our December 2022 target of 5,000, representing about 13% price appreciation from current levels.”
Aside from Fed commentary, traders will be looking for the latest U.S. data on manufacturing, gross domestic product and jobs this week. The U.S. House of Representatives will also be holding key votes related to President Joe Biden’s $4.1 trillion economic agenda.
In Europe, the Stoxx Europe 600 index increased for a second day. In Asia, equities in China and Japan also gained. China has once again brought local covid-19 cases down to zero.
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Some of the main moves in markets:
Stocks
– The S&P 500 rose 0.9% as of 4:01 p.m. EDT
– The Nasdaq 100 rose 1.5%
– The Dow Jones industrial average rose 0.6%
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– The MSCI World index rose 1.1%
Currencies
– The Bloomberg Dollar Spot Index fell 0.5%
– The euro rose 0.4% to $1.1748
– The British pound rose 0.8% to $1.3731
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– The Japanese yen rose 0.1% to 109.67 per dollar
Bonds
– The yield on 10-year Treasurys was little changed at 1.25%
– Germany’s 10-year yield advanced one basis point to -0.48%
– Britain’s 10-year yield advanced one basis point to 0.53%
Commodities
– West Texas Intermediate crude rose 5.3% to $65.44 a barrel
– Gold futures rose 1.3% to $1,807.40 an ounce
Published : August 24, 2021
By : Syndication Washington Post, Bloomberg · Jennifer Bissell-Linsk, Vildana Hajric
Thai exports in July grew for the fifth consecutive month, rising 20.27 per cent to US$22.65 billion, the Commerce Ministry reported on Monday.
The rise was due to accelerated clearance of export obstacles, implementation of the ministry’s export promotion plan, and continuing recovery in the US and other key markets, said the ministry.
The easing of EU lockdown measures helped Europe’s economy to grow faster, and global manufacturing to maintain strong expansion, with Global Manufacturing PMI at 50 per cent for the 13th consecutive month, it added.
Meanwhile, depreciation of the baht was helping to support the Thai export sector, said the ministry. Exports for the first seven months of 2021 grew by 16.20 per cent.
Thai exports expanded to almost every country, continuing at a high rate in major markets such as the United States, the European Union, China, Japan, South Korea, and Taiwan. Asean, especially the CLMV (Cambodia, Laos, Myanmar and Vietnam), showed satisfactory export-growth potential, said the ministry. Thai exports to Myanmar were particularly impressive showing expansion for the fourth consecutive month. Meanwhile, the Middle East, Latin America, Africa, and Russia and CIS markets have almost all grown at high rates, it said.
Exports for the first seven months of 2021 rose 16.20 per cent to $154.98 billion compared to last year. Imports were valued at $152.36 billion, a rise of 28.73 per cent. Thailand registered a trade surplus in the first seven months of $2.623 billion.
The Stock Exchange of Thailand (SET) Index closed at 1,582.07 on Monday, up 28.89 points or 1.86 per cent. Transactions totalled THB114.58 billion with an index high of 1,583.13 and a low of 1,565.93.
In the morning session, Krungsri Securities expected the day’s index to move between 1,560 and 1,565 points on hopes that lockdown measures would be eased in response to falling domestic Covid-19 cases and the improving vaccination rate.
However, it predicted the index would be pressured by the US Federal Reserve’s signal that it would taper quantitative easing, investment fund outflows and the ongoing anti-government protests in Thailand.
The 10 stocks with the highest trade value today were KBANK, BBL, CPALL, SCB, PTT, GUNKUL, AOT, GPSC, KTC and HANA.
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Other Asian indices were on the rise:
Japan’s Nikkei Index closed at 27,494.24, up 480.99 points or 1.78 per cent.
China’s Shanghai SE Composite Index closed at 3,477.13, up 49.80 points or 1.45 per cent, while the Shenzhen SE Component Index closed at 14,535.88, up 282.34 points or 1.98 per cent.
Hong Kong’s Hang Seng Index closed at 25,109.59, up 259.87 points or 1.05 per cent.
South Korea’s KOSPI closed at 3,090.21, up 29.70 points or 0.97 per cent.
Taiwan’s TAIEX closed at 16,741.84, up 399.90 points or 2.45 per cent.
สำนักงานคณะกรรมการส่งเสริมการลงทุน (บีโอไอ) ได้จัดทำวารสารภาษาอังกฤษได้จัดทำวารสารภาษาอังกฤษ Thailand Investment Review (TIR) เรื่อง “Thailand’s Bio-Circular and Green Economy: Living up to Global Challenges”วันที่ 18 ส.ค. 2564 เวลา 13:58 น. | ข่าวเศรษฐกิจ-ธุรกิจ
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