CPF raises Bt30 billion as investors lap up debentures #SootinClaimon.Com

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CPF raises Bt30 billion as investors lap up debentures

Jan 22. 2021

By The Nation

Charoen Pokphand Foods Pcl (CPF) successfully offered five series of debentures with a tenor of two years to 12 years and coupon rates from 1.75 per cent to 3.80 per cent to retail investors and institutional and/or high net worth investors during the period from January 18-21.

The joint lead arrangers revealed that investors were still looking for debentures with attractive returns, especially those issued and offered by stable and sustainable companies, and CPF debentures tick all the right boxes.

Paisan Chirakitcharern, chief financial officer, said that CPF would like to thank all investors, both retail and institutional and/or high net worth investors, for trusting and showing interest in the debenture issue.

Seeing the response, CPF decided to exercise the greenshoe option — selling more debentures than initially planned — and raised a total of Bt30 billion.

Krungsri posts 2020 net profit of Bt23.04bn, building strong provision buffer #SootinClaimon.Com

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Krungsri posts 2020 net profit of Bt23.04bn, building strong provision buffer

CorporateJan 22. 2021Krungsri president and CEO Seiichiro Akita Krungsri president and CEO Seiichiro Akita

By The Nation

Krungsri (Bank of Ayudhya and its business units) has announced net profits of Bt23.04 billion for 2020, representing a 14.5 per cent drop from its net profit in 2019. The bank attributed the sharp drop to provisioning for future uncertainties given the Covid-19 outbreak in mid-December and the fragile outlook for economic recovery.

Krungsi said its asset quality remains strong with a non-performing loan (NPL) ratio of 2 per cent and the coverage ratio at a record high of 175.12 per cent.

The bank cited achievements including the status conversion of its Cambodia subsidiary, Hattha Kaksekar Ltd, from a microfinance firm to a commercial bank named Hattha Bank; its Asean expansion by acquiring a 50 per cent stake in SB Finance Company, a subsidiary of Security Bank Corp (SBC) in the Philippines; investment in and strategic alliance with Grab; and the successful launch of Kept – an online savings management platform it said has been well-received by target groups. 

Key highlights of Krungsri’s consolidated 2020 results:

· Net profit: Recorded at Bt23.04 billion, down 14.5 per cent from normalised net profit in 2019.

· Loan growth: Up 0.8 per cent or Bt15.058 billion from December 2019, driven by retail and SME loans which grew by 2.2 and 2 per cent, respectively. Corporate loans contracted by 1.5 per cent, mainly due to loan repayments made by Thai corporates.

· Deposit growth: Totalled Bt1.834,505 trillion, an increase of 17.1 per cent, or Bt267.62 billion, from December 2019, attributed to an increase in savings deposits.

· Net interest margin (NIM): Recorded a 3.47 per cent, from 3.60 per cent in 2019, driven by interest rate reductions following assistance measures for customers impacted by the pandemic.

· Non-interest income: Dropped Bt3.877 billion or 10.6 per cent from normalised non-interest income in 2019, resulting from lower fee and service income following the economic slowdown.

· Cost to income ratio: Improved to 42.52 per cent from 45.1 per cent in 2019.

· Non-performing loans (NPL) ratio: Recorded at 2 per cent, compared to 1.98 per cent in December 2019.

· Coverage ratio: New high of 175.12 per cent, from 163.82 per cent in December 2019.

· Capital adequacy ratio: At 17.92 per cent, compared to 16.56 per cent in December 2019.

Krungsri president and CEO Seiichiro Akita said the Thai economy would take at least two years before returning to its pre-pandemic level. Krungsri Research forecasts the Thai economy will grow by 2.5 per cent in 2021, from its low base of 6.4 per cent contraction in 2020 – barring heightened risk from the domestic outbreak.

As of December 31, 2020, Krungsri, Thailand’s fifth largest bank in terms of assets, loans and deposits, reported Bt1.83 trillion in loans, 1.83 trillion in deposits, and Bt2.61 trillion in total assets. The bank’s said its capital was strong at Bt276.26 billion, equivalent to 17.92 per cent of risk-weighted assets, with 12.85 per cent in common equity tier 1 capital.

Kasikornbank announces Bt29.48-billion net profit for 2020 #SootinClaimon.Com

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Kasikornbank announces Bt29.48-billion net profit for 2020

CorporateJan 21. 2021KBank Chief Executive Officer Kattiya IndaravijayaKBank Chief Executive Officer Kattiya Indaravijaya

By The Nation

Kasikornbank and its subsidiaries reported a net operating profit of Bt29.48 billion for 2020, with fourth-quarter net profit being Bt13.25 billion, the bank said in a press release.

KBank Chief Executive Officer Kattiya Indaravijaya said the overall economy contracted in 2020 amid the domestic and global impact by Covid-19. The crisis negatively impacted domestic spending, exports and tourism. 

“The economy faces additional downside risks in 2021, particularly with the new wave of Covid-19. Therefore, economic recovery remains highly uncertain, while government expenditure and investment will remain key supportive factors,” she said.

“Since January 1, 2020, the bank and its subsidiaries have adopted TFRS related to financial instruments. Some items are not comparable with the financial statements and key financial ratios of previous years,” the press release said.

It added that KBank and its subsidiaries reported a 2020 net profit of Bt29.48 billion, a decrease of Bt9.24 billion, or 23.86 per cent compared to the previous year, mainly due to the fact that the bank and its subsidiaries complied with the prudent approach of setting aside a higher-than-expected credit loss from the preceding year of Bt9.53 billion, or 28.04 per cent, with reserves of Bt32.06 billion since the first half of 2020 due to high uncertainty from the Covid-19 pandemic.

With relief measures gradually ending in the second half of 2020, customers were still able to repay debts better than expected, and with the new wave of Covid-19 in late fourth quarter, the bank had revisited and assessed the adequacy of its reserves and found they were sufficient. 

The bank expected a credit loss amounting to Bt43.54 billion for 2020 – a level that could cover potential damages occurring in line with the situation, the statement said, adding that net interest income increased by Bt6.33 billion, or 6.17 per cent, mainly due to a decrease in interest expenses as a result of a drop in the average interest rate and a decrease in contributions to the Financial Institutions Development Fund, resulting in NIM that stood at 3.27 per cent. 

Meanwhile, non-interest income was down by Bt11.93 billion, or 20.65 per cent, mainly due to a decrease in revenue from securities sales and fees income related to loans, which changed to reflect interest income, it said. 

In addition, other operating expenses dropped by Bt2.73 billion, or 3.76 per cent, mainly due to a decrease in estimated employee and marketing expenses, while those for debt management increased. 

“In the quarter, other operating expenses increased by Bt3.82 billion, or 23.26 per cent, due mainly to the increase in IT-related expenses in order to support customers’ needs, marketing expenses due to seasonality and activities with business partners, resulting in a cost-to-income ratio that stood at 45.19 per cent,” the release said.

“As of December 31, 2020, the total assets of KBank and its subsidiaries were Bt3,658,798 million, an increase of Bt364,909 million, or 11.08 per cent, compared to the end of 2019. The majority came from loans, while NPL gross-to-total loans stood at 3.93 per cent,” it said. “The bank has provided support and assured customers impacted by Covid-19 of credit quality, while at the end of 2019 this stood at 3.65 per cent.” 

The coverage ratio as of December 31 stood at 149.19 per cent, while at the end of 2019 this stood at 148.60 per cent, the statement said. 

In addition, as of December 31, Kasikornbank Financial Conglomorate’s capital adequacy ratio, according to the Basel III Accord, was 18.80 per cent, with a Tier-1 Capital ratio of 16.13 per cent, the bank added.

Delta among seven stocks likely to be impacted by new SET regulations #SootinClaimon.Com

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Delta among seven stocks likely to be impacted by new SET regulations

EconJan 22. 2021

By The Nation

Seven low free-float stocks are at risk of being delisted from the SET50 and SET100 indices after the Stock Exchange of Thailand (SET) implemented free float adjusted market capitalisation regulations.

An analyst at Asia Plus Securities said DELTA, GPSC, AWC, VGI, BPP, CKP and ACE would be delisted from SET50 and SET100 indices due to SET’s new regulations.

He added that passive funds would reduce investment in MAKRO by 84 per cent, DELTA by 49 per cent, SCC by 31 per cent, GULF by 39 per cent, BAY by 47 per cent and GPSC and AWC by 43 per cent.

Somchai Amornthum, executive vice president at Krung Thai Asset Management, said SET’s free float adjusted market capitalisation regulations would help investors to manage investments in line with real market conditions.

“However, we advise investors to monitor how many low free float stocks will have reduced investment and be delisted from SET50 and SET100 indices before adjusting investment portfolio because domestic funds would not have many low free-float shares,” he said.

Thidasiri Srisamith, executive vice president at Kasikorn Asset Management, said apart from passive funds’ move to reduce investment in low free-float stocks, investors should monitor other factors, such as listed companies’ liquidity and growth potential, stocks’ fair price and funds’ overview.

Gold sheds some gains as investors sell precious metal #SootinClaimon.Com

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Gold sheds some gains as investors sell precious metal

EconJan 22. 2021

By The Nation

The price of gold dropped by Bt50 per baht weight in morning trade on Friday, the Gold Traders Association reported.

As of 9.24am, the buying price of a gold bar was Bt26,350 per baht weight and selling price Bt26,450, while gold ornaments were priced at Bt25,878.12 and Bt26,950, respectively.

At close on Thursday, the buying price of a gold bar was Bt26,400 per baht weight and selling price Bt26,500, while gold ornaments were Bt25,923.60 and Bt27,000, respectively.

Spot gold price moved to US$1,864 (Bt55,835) per ounce in the morning, while Comex (Commodity Exchange) gold to be delivered in February dropped by 60 cents to $1,865.9 per ounce on Thursday due to mass sell-offs of the precious metal after its price had hit the highest level in two weeks.

Hong Kong gold price dropped by HK$30 to $17,260 (Bt66,694) per tael, the Chinese Gold and Silver Exchange Society reported.

Oil falls below $53 with demand jitters from China to the U.S. #SootinClaimon.Com

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Oil falls below $53 with demand jitters from China to the U.S.

EconJan 22. 2021

By Syndication Washington Post, Bloomberg · Elizabeth Low, Alex Longley

Oil dipped below $53 a barrel in New York as the demand outlook in some of the world’s largest economies remained fragile.

Futures slipped 0.6% after JPMorgan Chase & Co. cut demand estimates for China as lockdowns spread ahead of the Lunar New Year travel rush. Meanwhile the U.K. suffered its worst day of the pandemic on Wednesday, with more than 1,800 deaths recorded in 24 hours.

On the supply side, the American Petroleum Institute said U.S. crude inventories swelled by 2.56 million barrels last week and gasoline and distillates stockpiles also increased, according to people familiar with the data.

Despite a more uncertain short-term consumption outlook, crude is still trading near the highest level in almost a year. There’s been a boost to energy use from cold weather, while Saudi Arabia’s unilateral output cuts and a weak dollar have also buoyed the market. There are hopes that the new Biden presidency will add fresh stimulus measures to boost demand.

“The recent price support is based on economic support packages,” said Hans Van Cleef, senior energy economist at ABN Amro Bank. Nonetheless, “the British variant of the virus spreading fast is keeping a lid on the upside potential.”

Though the API data largely pointed to stockpile increases, there was a big draw at the storage hub of Cushing, Oklahoma, which is the main pricing point for U.S. crude futures.

Declines there have helped to boost WTI’s nearest timespread to its strongest level since May — an indication of market tightness. The move was also aided by the expiry of the February contract this week, which had been in a bearish contango structure.

Tech shares lead U.S. stocks to all-time highs #SootinClaimon.Com

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Tech shares lead U.S. stocks to all-time highs

EconJan 22. 2021

By Syndication Washington Post, Bloomberg · Cecile Gutscher

The advance in U.S. stocks stalled with major indexes at or near records, though tech shares continued to march higher on anticipation that more fiscal spending will revive economic growth and bolster corporate earnings. The dollar weakened.

The S&P 500 Index was little changed at noon in New York, after closing at an all-time high. Risk appetite has gotten a boost from President Joe Biden’s push for nearly $2 trillion in additional spending and plans to jump-start a federal response to the pandemic. Benchmark Treasury yields remained higher after initial jobless claims posted a small decline.

In Europe, tech firms led gains, with the Stoxx 600 Index touching its highest level in 11 months. The euro held an advance after the European Central Bank left rates unchanged and affirmed the size of its pandemic purchase program at $1.2 trillion (1.85 trillion euros).

The MSCI World Index reached an intraday record on Thursday as investors look forward to increased economic support to battle the pandemic. ECB President Christine Lagarde warned the virus continues to pose a serious risk after policymakers voted to keep pumping unprecedented amounts of stimulus into the economy. In the U.S., Biden is seeking a $1.9 trillion fiscal package that’s already drawn criticism from several Republican senators.

“High valuations could find justification in the strong recovery that we expect, while inflation assets remain in the affordable zone,” according to Florian Ielpo, head of macroeconomic research and multi-asset portfolio manager at Unigestion SA. “We therefore see 2021 as a land of investment opportunities.”

Meanwhile, fresh tensions surfaced between U.S. companies and Beijing. China’s three biggest telecommunications firms said they requested a review of the New York Stock Exchange’s decision to delist their shares. Separately, Twitter Inc. locked the official account of the Chinese embassy to the U.S., citing a violation of its “dehumanization” policy.

On the virus front, global fatalities hit a daily record, with a U.K. official comparing some hospitals there to a “war zone.”

These are the main moves in markets:

Stocks

The S&P 500 rose less than 0.1% as of 4 p.m. EST.

The Nasdaq 100 Index added 0.8%.

The Stoxx Europe 600 Index ended flat.

The MSCI Asia Pacific Index rose 0.7%.

The MSCI Emerging Market Index gained 0.6%.

Currencies

The Bloomberg Dollar Spot Index declined 0.2%.

The euro jumped 0.4% to $1.2158.

The British pound gained 0.5% to $1.372.

The onshore yuan was little changed at 6.461 per dollar.

The Japanese yen was little changed at 103.54 per dollar.

Bonds

The yield on 10-year Treasurys gained three basis points to 1.11%.

The yield on two-year Treasurys fell one basis point to 0.12%.

Germany’s 10-year yield climbed three basis points to -0.496%.

Japan’s 10-year yield dipped one basis point to 0.043%.

Commodities

West Texas Intermediate crude declined 0.3% to $53.13 a barrel.

Brent crude was little changed at $56.11 a barrel.

Gold futures rose 0.1% to $1,871.90 an ounce.

Thailand hopes for 4% growth in US exports this year: DITP #SootinClaimon.Com

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Thailand hopes for 4% growth in US exports this year: DITP

EconJan 22. 2021Department of International Trade Promotion (DITP) director-general Somdet SusomboonDepartment of International Trade Promotion (DITP) director-general Somdet Susomboon

By The Nation

Thailand is targeting a 4 per cent growth in exports to the US this year, Department of International Trade Promotion (DITP) director-general Somdet Susomboon said.

Products with good growth potential include supplementary food, medical products and goods that can be used to work from home.

He added that US President Joe Biden’s trade policy is to not just lower dependence on foreign goods and strengthen domestic industries, but also to lure companies to bring their manufacturing facilities back to the US.

Thailand should closely monitor Biden’s fiscal and monetary policies, which will have an impact on the baht, he said.

Almost 5m workers hit by delayed economic recovery after new Covid wave: BOT #SootinClaimon.Com

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Almost 5m workers hit by delayed economic recovery after new Covid wave: BOT

EconJan 22. 2021Chayawadee Chai-Anant, senior director in the BOT economic and policy department. File photo Chayawadee Chai-Anant, senior director in the BOT economic and policy department. File photo

By The Nation

The new wave of Covid-19 will delay Thailand’s economic recovery and affect 4.7 million workers, a senior official at the Bank of Thailand (BOT) has warned.

Chayawadee Chai-Anant, senior director in the BOT economic and policy department, said though the second wave of infections is not as severe as the first, it would still delay economic recovery to pre-crisis levels – possibly till late next year. 

“The recovery will be a K-shaped, not V-shaped, but if government measures are effective, it will be close to a V-shape recovery,” she told a seminar hosted by the World Bank yesterday.

The government has limited lockdowns and restrictions to specific locations after the fresh outbreak in December, while also launching new aid measures that are smaller in scale than in the first virus wave early last year.

The Thai economy showed signs of recovery in the third quarter last year, but the second wave of infections has disrupted that trend.

“Thailand’s economy could return to pre-crisis level in mid-2022, or the recovery may be delayed to late of 2022,” said Chayawadee.

Tourism-related sectors such as restaurants, hotels and transport would feel the brunt of the new outbreak as they have yet to recover from the first wave, she added.

The second wave will hit 4.7 million workers hard, costing either their jobs or reducing their hours along with their income, according to an initial assessment by the central bank and business sectors.

Chayawadee said three key factors needed to be closely monitored.

The first factor is how long the pandemic will last. Second is the effectiveness of government aid measures, and third is how Thailand will open the country to foreign arrivals. Linked with the third factor is the scale of vaccination in the country.

Tourism-related industries are now facing surplus capacity in transport and hotels after tourist arrivals fell to around 7 million, from 40 million before the pandemic. New aid measures must be targeted to reach people in need, she said.

Somprawin Manprasert, chief research economist at Krungsri Bank, said the urban poor are facing the biggest impact from Covid-induced crisis, while high-income groups have been only slightly affected. “The government does not have adequate policy tools to deal with the Covid fallout,” he added.

Pisit Puapan, executive director of the Fiscal Policy Office’s macroeconomic policy bureau, insisted the government has adequate financial resources to deal with economic impact. Thailand’s fiscal position is relatively strong given public debt was only 42 per cent of GDP as recently as 2019, he said. However, he acknowledged that this figure is now climbing, with Thai public debt now close to 60 per cent of GDP.

The government has set sustainable debt-to-GDP at 60 per cent, but that limit could be raised in the future if the country needs to spend more on productive projects, he said.

The World Bank projects the Thai economy will rebound to 4 per cent growth this year and up to 4.7 per cent next year, from an estimated 6.5 per cent contraction last year.

Birgit Hansl, World Bank country manager for Thailand, has called for more women to join the workforce. Thailand should also increase labour productivity, given the country is becoming an ageing society, she said.

Thailand can expect 4-5% growth this year, says Finance Minister #SootinClaimon.Com

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Thailand can expect 4-5% growth this year, says Finance Minister

EconJan 22. 2021Finance Minister Arkhom TermpittayapaisitFinance Minister Arkhom Termpittayapaisit

By The Nation

The Thai economy should expand by 4 to 5 per cent this year, Finance Minister Arkhom Termpittayapaisit said on Thursday at the World Bank’s Thailand Economic Monitor event.

Related storyThai economy to see 4% growth this year, says World Bank, but warns of downside risks

He said the government has launched several economic stimulus measures and hopes the upcoming vaccine will also help revive the economy after the Covid-19 fallout.

Despite this year’s better outlook, the government will continue pushing economic growth by driving digital, eco-friendly as well as health sectors, he said.

The government is also restructuring the taxation system to ensure the country has sustainable revenue, the minister added.

The Cabinet on Tuesday approved the new “RaoChana” (WeWin) cash-handout scheme and another round of “Khon La Khrueng” (Let’s Go Halves) co-payment scheme, aiming to ease the burden on people hit by the new wave of Covid-19 infections.

Arkhom said on Wednesday that the new WeWin scheme and the first two phases of the Let’s Go Halves scheme should boost the economy by 1 per cent.