SET bullish as US jobless numbers decline, Biden plans $6-trillion budget
The Stock Exchange of Thailand (SET) Index rose by 8.93 points, or 0.56 per cent, to 1,591.89 at 10am on Friday. The volume of total transactions was THB9.05 billion with an index high of 1,593.83 and a low of 1,590.07.
Krungsri Securities expected the index on Friday to rise to between 1,595 and 1,600 points as the number of US initial jobless claims continued to decrease, while US President Joe Biden will unveil a $6-trillion budget plan for fiscal year 2022 on Friday.
It added that the index had also gained positive sentiment from the rising oil price.
However, investors should beware of mass sell-offs of shares due to the outflow of foreign funds, Krungsri Securities said.
It recommended that investors buy:
▪︎ BDMS, BCH and CHG, which gained positive sentiment from the mass vaccination.
▪︎ PTT, PTTEP, PTTGC and IVL, which benefit from the rising oil price.
▪︎ EA, GPSC, BPP and ROJNA, which benefit from the Thai government’s move to promote electric cars.
The SET Index closed at 1,582.96 on Thursday, up 14.38 points or 0.92 per cent. Total transactions leapt to THB175.27 billion, from their normal level below THB100 billion, with an index high of 1,587.54 and a low of 1,568.89.
The baht opened at 31.28 to the US dollar on Friday, strengthening from Thursday’s close of 31.31.
The Thai currency is likely to move between 31.25 and 31.35 during the day, Krungthai Bank market strategist Poon Panichpibool said.
He said the baht was still fluctuating between 31.20 and 31.40 to the US dollar, as the dollar’s direction was not clear. Also, the Thai currency was supported by gold trade, the market strategist added.
Poon said that exporters aimed to sell their dollars when the baht moves between 31.40 and 31.50.
Gold stays firm despite sell-offs triggered by higher US bond yield
The price of gold in morning trade on Friday was unchanged from Thursdays close due to higher US bond yield and strong US economic data, triggering mass sell-offs of the precious metal.
The Gold Traders Association report at 9.23am showed buying price of a gold bar at THB27,950 per baht weight and selling price at THB28,050, while gold ornaments were priced at THB27,439.60 and THB28,550, respectively.
Spot gold on Friday was US$1,894 (THB59,338) per ounce compared to Thursday when it had dropped by $5.3 to $1,898.5 per ounce.
Hong Kong gold price on Friday dropped by HK$30 to $17,550 (THB70,861) per tael, the Chinese Gold and Silver Exchange Society reported.
Stocks that stand to benefit the most from an economic rebound rallied after solid data spurred a decline in pandemic darlings such as technology companies. Treasuries retreated.
Industrial, financial and commodity shares led gains in the S&P 500. The Russell 2000 of small caps outperformed major equity benchmarks, while the tech-heavy Nasdaq 100 dropped. A news report that President Joe Biden will unveil a budget that would see federal spending jump to $6 trillion in the coming fiscal year also helped sentiment. The KBW Bank Index posted a back-to-back advance as the chief executive officers of the largest lenders testified before Congress.
Equities headed toward their fourth straight monthly rally as prospects for an economic rebound tempered inflation worries. Treasury Secretary Janet Yellen said she sees the burst in prices as temporary, though likely to last through the end of 2021. Data showed jobless claims dropped to a fresh pandemic low, while orders for business equipment climbed more than forecast. Pending home sales fell, but analysts highlighted underlying buyer interest that could translate into a pickup in contract signings.
“We’re seeing that kind of economic data underscore what we keep calling the recovery trade — a move back into cyclical and defensive stocks, companies that are poised to do better with a reopening of the economy,” said Greg Bassuk, chief executive officer at AXS Investments. “Value has a much stronger path for gains going forward.”
The Russell 2000 has lost ground to the Nasdaq 100 this quarter, but it has valuation on its side. The forward price-earnings spread between the small-cap and tech-heavy gauges has narrowed to below the five-year average. And while the Russell 2000 value/growth ratio has ebbed in the latter half of May, the relative strength of value suggests that small-cap stocks can continue to be big beneficiaries of the reopening recovery.
These are some of the main moves in markets:
Stocks
– The S&P 500 rose 0.1% as of 4 p.m. EDT
– The Nasdaq 100 fell 0.3%
– The Dow Jones industrial average rose 0.4%
– The Russell 2000 Index rose 1.1%
Currencies
– The Bloomberg Dollar Spot Index was little changed
– The euro was little changed at $1.2198
– The British pound rose 0.6% to $1.4203
– The Japanese yen fell 0.6% to 109.79 per dollar
Bonds
– The yield on 10-year Treasuries rose three basis points to 1.60%
– Germany’s 10-year yield advanced three basis points to -0.17%
– Britain’s 10-year yield advanced six basis points to 0.81%
Commodities
– West Texas Intermediate crude rose 0.9% to $67 a barrel
– Gold futures fell 0.2% to $1,901 an ounce
Published : May 28, 2021
By : Syndication Washington Post, Bloomberg · Rita Nazareth, Claire Ballentine
U.S., China trade chiefs hold candid talks in first call
U.S. Trade Representative Katherine Tai and Chinas Vice Premier Liu He had a “candid” first conversation as the two sides try to resolve some of their differences on trade.
The trade chiefs spoke Thursday morning in Beijing, China’s Ministry of Commerce said in a statement, and “conducted candid, pragmatic and constructive exchanges in an attitude of equality and mutual respect.”
In a separate statement, the USTR said “Ambassador Tai discussed the guiding principles of the Biden-Harris administration’s worker-centered trade policy and her ongoing review of the U.S.-China trade relationship, while also raising issues of concern.”
The phone call is one of the few top-level meetings between the two sides since President Joe Biden took office in January and comes after top diplomats had an acrimonious meeting in Alaska in March. While both nations agreed on a partial trade deal in 2020, China and the U.S. still have tariffs on billions of dollars in trade in place, and China has never met the purchase commitments it made in that deal.
The U.S. administration is reviewing its stance toward China and hasn’t made any major changes to the policies it inherited from former President Donald Trump, although there are increasing signs of the direction it will take. The White House’s top official for Asia said this week that the U.S. is entering a period of intense competition with China as its government becomes ever more tightly controlled by President Xi Jinping.
“The period that was broadly described as engagement has come to an end,” Kurt Campbell, the U.S. coordinator for Indo-Pacific affairs on the National Security Council, said Wednesday. U.S. policy toward China will now operate under a “new set of strategic parameters,” Campbell said, adding that “the dominant paradigm is going to be competition.”
In contrast with much of the rest of the bilateral relationship, trade has been one of the less contentious issues recently. Ties have deteriorated over the past year or more on almost every other topic, with clashes over human-rights concerns including allegations of forced labor in China’s western Xinjiang region; Taiwan; the crackdown in Hong Kong; Beijing’s purchases of oil from sanctioned Iran; and the long-running disputes over the South China and East China Seas.
The trade deal should be seen in the context of “the overall U.S.-China trade, and economic relationship which is very, very challenging,” Tai told Reuters in an interview Wednesday. “The overall challenges that we have with China are also still there and they are very large.”
A blog affiliated with Chinese state media said that “there are still many differences between China and the United States and a breakthrough from the current situation requires more in-depth communication.” Still, the “stabilizing role of economic and trade cooperation in Sino-U.S. relations remains important,” according to Taoran Notes, which is a blog linked to the Economic Daily and was seen as an authoritative commentator on the trade talks in 2019.
The Liu-Tai call followed a staff-level phone discussion that took place Tuesday night Washington time, according to a person familiar with the planning for the meeting. During the call, the Chinese stressed the importance of tariff rollbacks as a necessary component of next steps in the relationship, the person said.
The Biden administration so far has left in place tariffs affecting billions of dollars in trade that were imposed under Trump. Tai has pledged to build on the January 2020 trade pact, saying on May 5 that she respects the continuity of U.S. policy.
However, despite the tariffs that the U.S. and China have in place, trade is actually growing, with Chinese imports from the U.S. hitting a record in March. China’s exports to the U.S. have been strong due to the pandemic, U.S. stimulus payments and an economic rebound.
Neither side has any interest in “initiating a trade-off that would end the Trump-era tariffs,” according to Hosuk Lee-Makiyama, director of the European Centre for International Political Economy in Brussels. “China sees the tariffs as illegal and hostile acts, while the Biden administration sees tariffs as a topic where they have nothing to win in terms of approval ratings, but everything to lose.”
Tai has previously said she expects China to live up to the commitments it made in the trade deal reached under the Trump administration and that the Biden government is focused on enforcing existing trade agreements and rules.
Although those purchase targets look out of reach, agricultural goods may still prove a bright spot, with China purchasing corn for delivery later in the season to meet a domestic shortfall and a banner year for U.S. imports still on the cards.
The stock market initially gained on the news of the call but that didn’t last. The benchmark Chinese stock index was steady at the lunchtime break after rising as much as 1.1% in the morning session, while the offshore yuan was little changed at around the strongest level since 2018.
Liu was the senior negotiator for the deal and served as the USTR counterpart during the tenure of former trade chief Robert Lighthizer. Under the agreement’s Trade Framework Group, the USTR and the Chinese counterpart are due to meet every six months to discuss implementation. The last time that happened was August 2020.
Published : May 28, 2021
By : Syndication Washington Post, Bloomberg · No Author
Investment of THB15 billion sweetens Thailand’s growing bioplastics sector
The Board of Investment (BOI) has approved Nature Works Asia Pacific Co’s 15-billion-baht investment to produce Polylactic Acid (PLA), a biodegradable polymer used to make tea bags, coffee capsules and food packaging. PLA is also used to make biodegradable face masks, cleaning cloths and diapers.
BOI chief Duangjai Asawajintajit said the investment is the latest step in Thailand’s bio-circular-green (BCG) economic model, which focuses on cost-effective use of biological resources.
He added that the BOI had approved 31 billion baht of investment in Thailand’s bioplastics business in the six years up to March.
Nature Works Asia Pacific expects to produce 75,000 tonnes of PLA per year, using domestic agricultural raw materials including about 110,000 tons of sugar.
Duangrai said the bioplastics industry will play an increasingly important role in Thailand’s future as economic development goes hand in hand with environmental stewardship.
This trend will be a foundation for Thailand to create a bioplastics cluster industry in line with the BCG concept and the UN’s sustainable development goals (SDGs), he added.
The Stock Exchange of Thailand (SET) Index closed at 1,582.96 on Thursday, up 14.38 points or 0.92 per cent. Total transactions leapt to THB175.27 billion, from their normal level below THB100 billion, with an index high of 1,587.54 and a low of 1,568.89.
In the morning session, Krungsri Securities expected the day’s index to fluctuate between 1,550 and 1,580 points amid hopes of global economic recovery after an improvement in US economic data and the Federal Reserve’s assurance that it was able to deal with rising inflation.
The 10 stocks with the highest trade value today were KBANK, KTC, SCGP, PTT, CPALL, CBG, AOT, OR, BANPU and INTUCH respectively.
Other Asian indices dropped, except in mainland China:
Japan’s Nikkei Index closed at 28,549.01, down 93.18 points or 0.33 per cent.
China’s Shanghai SE Composite Index closed at 3,608.85, up 15.49 points or 0.43 per cent, while the Shenzhen SE Component Index closed at 14,897.19, up 103.51 points or 0.70 per cent.
Hong Kong’s Hang Seng Index closed at 29,113.20, down 52.81 points or 0.18 per cent.
South Korea’s KOSPI closed at 3,165.51, down 2.92 points or 0.092 per cent.
Taiwan’s TAIEX Index closed at 16,601.61, down 42.08 points or 0.25 per cent.
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