Baht expected to move sideways as markets await US Fed meeting outcome
The baht opened at 32.76 to the US dollar on Friday, weakening from Thursday’s closing rate of 32.74.
The Thai currency is likely to move between 32.70 and 32.85 during the day, Krungthai Bank market strategist Poon Panichpibool said.
Poon predicted the baht would move sideways as investors were waiting for important factors, such as the US Federal Reserve’s move to reduce quantitative easing (QE).
Poon expected the baht to strengthen in the short term amid hopes of an economic recovery.
The government might ease lockdown measures and foreign investors might invest in Thai stocks because the situation was stable and might be resolved soon.
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He was concerned about the Covid-19 situation in Thailand, as he was not sure if the spread of the virus had been contained because enough proactive testing was not being done. The positive rate in Thailand was higher than 20 per cent, while WHO recommends it should be lower than 5 per cent.
He added that the baht was likely to fluctuate and weaken as the situation was not clearly better.
Three Fed policy hawks push early taper despite risk from delta
Three of the Federal Reserves leading hawks, on the eve of the central banks annual Jackson Hole symposium, urged that policymakers move quickly to slow asset purchases despite the risk from the spreading delta variant.
Federal Reserve Bank of Dallas President Robert Kaplan said he favors an announcement at the central bank’s September meeting to begin tapering bond buying and implementing it in October or shortly after. St. Louis’s James Bullard called for a start in the fall — finishing by the end of the first quarter in 2022, while Kansas City Fed’s Esther George urged an early move begin this year.
The three, speaking in television interviews, highlighted one side of the debate among U.S. central bankers. None of them vote on policy in 2021. Fed Chair Jerome Powell has struck a more patient tone and will give his take on the outlook Friday in a virtual speech to get the day-long forum under way.
“I think it’s important to get started and the conditions of pace, timing of when we end, I’m open minded to listening to the debates around that,” George said in a Bloomberg TV interview with Michael McKee conducted Wednesday evening. “But I am less interested in deferring that decision.”
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Bullard echoed that view in a CNBC interview Thursday, adding that the delta variant’s impact could be reaching a peak.
“Some on Wall Street seem to think that the numbers are rolling over on delta,” Bullard said. “I don’t really know if we can say that yet but it will peak at some point. The main message here is the economy has learned to adapt to the pandemic.”
U.S. stocks declined as investors absorbed their comments. Treasury yields rose along with the dollar.
While George has been a longtime policy hawk and Bullard has changed his views to more hawkish this year in light of a stronger job market, both will gain votes in 2022 on the policy-setting Federal Open Market Committee. Kaplan, also a hawk, will vote next in 2023.
“It would continue to be my view that when we get to the September meeting, we’d be well served to announce a plan for adjusting purchases and begin to execute that plan in October or shortly thereafter,” Kaplan told CNBC.
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That seemed to be a small shift in tone from his most recent comments, when he said he would be open to adjusting calls for a quick tapering of bond buying if delta hurts the economy’s progress.
George suggested she might have more flexibility on when the taper should actually be implemented, saying “I think we should get started this year so that we can begin to pare the amount of accommodation.”
“The economy continues to grow at a strong rate,” George said, adding that in terms of the potential risk of the delta variant, “you can imagine that it might slow down some of the returns to the labor market. But I don’t expect at this point that it will derail the economy.”
Most Federal Reserve officials agreed last month they could start slowing the pace of bond purchases later this year, judging that enough progress had been made toward their inflation goal, while gains had been made toward their employment objective, according to the minutes of the FOMC’s July 27-28 meeting.
Bullard said he favored getting started with tapering in the fall and wrapping up the process by the end of the first quarter, which would give the FOMC the option of raising rates earlier in 2022 if needed.
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“There is some worry that we are doing more damage than helping with the asset purchases because there is an incipient housing bubble in the U.S.,” Bullard said.
With the median house price approaching $400,000, Bullard added, “You are pricing low-income people out of this market. I’m not sure that is what we want to do. We got into a lot of trouble in the mid-2000s by being too complacent about housing prices.”
The Fed has pledged to buy $80 billion in Treasuries and $40 billion in mortgage securities a month until the economy shows “substantial further progress” on inflation and employment as it recovers from Covid-19.
The Kansas City Fed shifted its annual gathering last Friday in light of elevated health risks outside Jackson, Wyoming. Covid-19 cases have spiked across the country as the delta variant spreads, spurring companies to re-evaluate return-to-work plans and schools to return to virtual education, quarantines and mask requirements.
U.S. stocks fall on Kabul blasts, hawkish Fed view
U.S. equities fell Thursday as markets turned cautious after explosions in Afghanistan and ahead of a Federal Reserve gathering that may provide more clues about its approach to paring stimulus.
The S&P 500 and Nasdaq 100 slid as U.S. and civilian casualties were reported from blasts outside the Kabul airport, escalating tensions as the U.S. evacuates the area. The decline came after nonvoting members of the Federal Open Market Committee also made hawkish monetary comments, urging the Fed to start tapering its asset purchase program. Energy shares led the decline as crude oil fell. Treasuries were little changed and the dollar rose.
Michael O’Rourke, chief market strategist at JonesTrading, said the quick drop in shares was likely a culmination of the morning news, including the uncertainty created by the explosions and the Fed commentary ahead of Chairman Jerome Powell’s speech at the Jackson Hole symposium.
Views are split on whether the address Friday will provide a clearer guide on tapering emergency Fed support. While the ongoing economic rebound and elevated inflation add to the case for starting policy normalization, the fast-spreading delta virus strain threatens a slower pace of recovery than some had expected.
“While news of bombings at the Kabul airport has resulted in some volatility this morning, it has become consensus that Jackson Hole will be more or less a nonevent as investors are moving expectations for any major Fed taper announcement to later this year,” said Christopher Murphy, Susquehanna International Group co-head of derivatives strategy.
If Powell fails to hint at when a taper announcement will happen, all eyes will next be on the August jobs report, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. The latest jobless claims and annualized gross domestic product data Thursday slightly missed estimates.
“A strong jobs report on Sept. 3 will lead to increased speculation that the Fed will announce their taper plans at the September FOMC meeting,” he said. “However, any weakness or disappointment in that report will push consensus back to the next Fed meeting.”
The Stoxx Europe 600 Index fell, dragged lower by basic resources and travel, while MSCI Inc.’s Asia-Pacific gauge snapped a three-day rally. WTI crude oil fell, paring back its weekly gain to about 9%. Bitcoin slid to about $47,000. Gold was slightly higher.
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Some of the main moves in markets:
Stocks
– The S&P 500 fell 0.6% as of 4 p.m. EDT
– The Nasdaq 100 fell 0.6%
– The Dow Jones industrial average fell 0.5%
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– The MSCI World index fell 0.5%
Currencies
– The Bloomberg Dollar Spot Index rose 0.3%
– The euro fell 0.2% to $1.1754
– The British pound fell 0.5% to $1.3698
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– The Japanese yen was little changed at 110.03 per dollar
Bonds
– The yield on 10-year Treasurys was little changed at 1.34%
– Germany’s 10-year yield advanced one basis point to -0.41%
– Britain’s 10-year yield was little changed at 0.60%
Commodities
– West Texas Intermediate crude fell 0.8% to $67.84 a barrel
The Stock Exchange of Thailand (SET) Index closed at 1,601.91 on Thursday, up 1.42 points or 0.09 per cent. Transactions totalled THB81.23 billion with an index high of 1,603.99 and a low of 1,595.69. The SET rose for a fifth straight day after surging past the 1,600 mark on Wednesday.
In Thursday’s morning session, Krungsri Securities expected the index to rise to between 1,608 and 1,615 points, buoyed by recently announced plans to ease lockdown measures and administer 100 million doses of Covid-19 vaccine.
It added that the index also gained positive sentiment from foreign inflows for the third straight day in response to the SET’s “Thailand Focus 2021” virtual conference, which is being held until Friday.
“However, sell-offs of stocks to prevent risk before the US Federal Reserve’s annual meeting will pressure the index,” Krungsri Securities said.
The 10 stocks with the highest trade value today were 7UP, KBANK, GUNKUL, PTTGC, GPSC, ADVANC, INTUCH, PTT, KCE and JMART.
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Other Asian indices were mixed:
Japan’s Nikkei Index closed at 27,742.29, up 17.49 points or 0.063 per cent.
China’s Shanghai SE Composite Index closed at 3,501.66, down 38.72 points or 1.09 per cent, while the Shenzhen SE Component Index closed at 14,415.46, down 282.04 points or 1.92 per cent.
Hong Kong’s Hang Seng Index closed at 25,415.69, down 278.26 points or 1.08 per cent.
South Korea’s KOSPI closed at 3,128.53, down 18.28 points or 0.58 per cent.
Taiwan’s TAIEX closed at 17,066.96, up 21.10 points or 0.12 per cent.
Exports of fresh and processed fruits in the first seven months (January to July) generated 131.16 billion baht, up 48.31 per cent year on year, the Commerce Ministry said on Thursday.
The ministry is targeting at least 180 billion baht in revenue from fresh and processed fruit exports this year, up 30 per cent year on year, said Commerce Minister Jurin Laksanawisit.
The minister credited the rise in fruit exports to four promotional activities – online business matching, a department store promotion campaign, Thai Fruit Golden Month, and sales via foreign platforms such as India’s BigBasket and China’s Tmall.
“In China alone, Thai Fruit Golden Month in eight cities generated up to 15 billion baht,” said Jurin, who expects the same promotion in five more cities to yield another 5 billion baht.
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Fruit exports up almost 50% in first 7 months
He added that provincial commerce offices have been instructed to oversee negotiations between buyers and sellers in each province to clear remaining fruit in stock, especially longan and langsat.
“Meanwhile, we have asked commerce ambassadors to seek fruit markets overseas and prepare export plans for next year,” he added.
Krungsri enters Vietnam through the acquisition of SHB Finance
The acquisition of SHB Finance marks another milestone achievement in Krungsri’s strategic directions of ASEAN expansion, paving the way to aspiration to “Be the Preferred Thai Bank Connecting Customers’ Needs across ASEAN.”
Krungsri (Bank of Ayudhya PCL) announced that it has reached an agreement with Saigon-Hanoi Commercial Joint Stock Bank (“SHB”), the top 5 largest joint-stock commercial banks in Vietnam, to purchase and receive the transfer of 100% of charter capital in SHBank Finance Company Limited (“SHB Finance”), the top 10 consumer finance company in Vietnam. Under this agreement, SHB will transfer 50% of SHB Finance’s charter capital to Krungsri and the remaining 50% after 3 years when the two parties fulfil the certain conditions and meet the relevant regulatory requirements. The acquisition of SHB Finance marks another milestone achievement in Krungsri’s strategic directions of ASEAN expansion, paving the way to aspiration to “Be the Preferred Thai Bank Connecting Customers’ Needs across ASEAN.”
Krungsri President & CEO Mr. Seiichiro Akita said, “We are very pleased to announce that we have signed agreements with SHB to acquire a 100% stake in SHB Finance, SHB’s consumer finance subsidiary, upon closing of the transaction after all regulatory approvals are obtained. SHB’s local expertise and an extensive network in Vietnam complemented by Krungsri’s strength in consumer finance will enhance SHB Finance’s business competitiveness. Together, we will develop and deliver quality consumer finance products to customers in Vietnam. This milestone also underscores our commitment to ASEAN expansion strategy following our current medium-term business plan covering 2021-2023 .”
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Currently, Krungsri has secured its foothold in the ASEAN Market including a branch and a consumer finance business in Lao PDR, a commercial bank in Cambodia, a consumer finance business in the Philippines, and a representative office in Myanmar. The acquisition of SHB Finance in Vietnam further strengthens Krungsri’s leading position in connecting customers’ needs across ASEAN.
Chairman of the Board of Directors of SHB Mr. Do Quang Hien said, “The consumer finance market in Vietnam has great potential and room for growth. SHB Finance is a “beautiful girl” with healthy financial health. After a period of selection and negotiation, we have found a suitable partner to contribute to bringing synergistic value in many aspects such as management experience, technology, improve financial capacity, network expansion, and new product development, international cooperation, enhancement of SHB’s reputation and brandname in the region and in the world.”
Both Krungsri and SHB will work together to promote the growth of Vietnam’s consumer finance market, bringing greater value to customers, shareholders, and partners.
PTG tapping strong growth in household LPG sector to expand market penetration
PTG saw the business opportunities in this growth and prioritised studying customers’ needs. To gain customers’ loyalty and desire to use PTG’s services, it knew it had to respond to their requirements.
PTG is moving forward to penetrate the LPG business, launching products to suit the needs of customers’ lifestyles.
“We launched the household gas business in 2020 with a goal of meeting consumers’ needs. We began by conducting a consumer survey about existing household gas services. Survey respondents expressed concern about old gas cylinders and also said they were sometimes not comfortable with the gas delivery staff. So, we designed our business plan to provide what customers needed,” said Suwatchai Pitakwongsaporn, managing director of Atlas Energy Company Limited, a subsidiary of the PTG Energy Public Company Limited.
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PTG tapping strong growth in household LPG sector to expand market penetration
Meanwhile PTG’s liquefied petroleum gas business (LPG) in the automotive, industrial and household sectors is still in the “uptrend” phase, says the company. This is especially true for the household gas sector, which is growing against the trend. Although consumer behaviour is shifting to electrical appliances, gaps remain in the market that offer PTG opportunities to penetrate this sector.
Suwatchai explained that the household gas sector is showing the highest average LPG consumption rate at 2 million tons per year. This compares to 600,000 tons in the industrial sector and 600,000 tons in the automotive sector.
PTG saw the business opportunities in this growth and prioritised studying customers’ needs. To gain customers’ loyalty and desire to use PTG’s services, it knew it had to respond to their requirements.
A year and a half later, the feedback from household gas consumers has been impressive.
In 2020, only 7 per cent of PTG’s gas business revenue came from household use, with the rest from the auto sector. In 2021, income from household use surged to 30 per cent, with automotive gas at 70 per cent. The company has set a goal of boosting the household gas proportion to 50 per cent in the near future.
PTG tapping strong growth in household LPG sector to expand market penetration
To strengthen its household gas business for market penetration, as well as the consumer survey, PTG has also created a members’ platform with the “Max Card”. The platform, which has so far attracted 16 million members and is ranked second in the country, enables household gas customers to collect points on their Max Card from all PTG services and redeem them for privileges.
“Max Card is our strong selling point, as the customers can collect points when they refuel or buy gas. We aim to expand the membership to 18 million. We are the only company where customers can buy household gas to collect points for privileges and receive discounts at more than 1,000 participating stores.
PTG tapping strong growth in household LPG sector to expand market penetration
The Max Card also allows the company to study consumer behaviour and leads to more responsive service offerings,” said Suwatchai.
PTG has two major strengths in the cooking gas business:
1. The confidence in differentiation and service, with the “new gas cylinder” as a prominent service, according to the customer survey. PTG’s gas cylinders are newer than the cylinders of other services currently available in the market. The “Safe Locked Valve” system was developed to prevent gas from leaking, and the “QR Code” allows the cylinder’s usage history to be monitored and recorded from the filling station to the customer’s delivery location.
2. The company’s constant service care and overall quality control, as PTG’s business covers upstream to downstream operations, whether gas transportation, filling plants or gas sales outlets.
There are currently 116 Gas Shop branches in PT gas stations across Bangkok and its perimeter, expanded from 90 branches in 2020. The company aims to have 140 branches operating by the end of 2021 but is likely to expand beyond that target to 160 by year-end.
The company also expected to open another 12 gas filling plants franchises this year, making a total of 16 including the four existing ones. But that expectation has been exceeded after more than 20 entrepreneurs applied for franchise rights. There are currently more than 300 kiosk services located at PT gas stations, and the goal is to expand to 450 branches in 2021.
The goal of the PTG household gas business over the next 3-5 years is to grow its market share to become the No 3 provider by 2024. It expects to boost its market share by 2 per cent in 2021. PTG household gas sales in 2021 are estimated at 80,000 tons, with 15,000 tons sold in the first six months of the year (January to June). The growth rate is more than 100 per cent from the 5,300 tons of household gas sold in 2020.
Suwatchai also revealed plans to expand the LPG business in the automotive sector amid the drop in vehicle usage during the Covid-19 pandemic. The company will add another 50 gas stations, totalling 206 branches by the end of 2021. The company expects to retain its second-highest market share if the Covid situation remains bad. However, if the situation improves, it expects to move up to No 1 with sales forecast to rise by 15 to 20 per cent.
“Taxis are the main customer group in the auto gas market. Some may reckon that gas-powered cars are being replaced by alternative-energy vehicles, but the data shows that there are over 80,000 registered taxis. Hence, there is potential to impel these taxis to switch from NGV to LPG. Our gas tank-swapping service will be free of charge, and taxis will receive continuous services including Covid-19 sterilising spray, free lunches and the Taxi Reward campaign.”
PTG also sees an opportunity to expand in the LPG business due to a shift in consumer behaviour to using cooking equipment that is convenient and safe. The company will launch a “canned gas” product to meet consumers’ demand and need for convenience. Meanwhile, it is experiencing significant growth in the grill restaurant group.
For its canned gas product, PTG has emphasised the approach to customer groups. Thanks to its online ordering and delivery services, including the nationwide network of Gas Shops, the company is confident that this product will receive a good response. It added that while there are other big brands in the market, there is no widespread promotion of sales. And although this type of product is available in convenience stores, the company believes that the PT brand has the advantage of being trusted by consumers.
Suwatchai concluded that strong growth of the LPG sector had opened opportunities to expand the business. The company will be listed on the Stock Exchange of Thailand (SET) to raise additional funds for business expansion, with a goal to invest in a warehouse system. The goal has been set to be swiftly achieved by the end of 2021, or at the latest in the first quarter of 2022.
“In my opinion, the challenge of this business is the logistics system. A good logistics system can reduce costs and we are certain that we can do it because we already have our own transportation system operated by a company in our group,” said Suwatchai.
WHA Group Acquires Shares in Storage Asia to Expand its Integrated Logistics Portfolio
The acquisition of 29.40 % marks a strategic partnership to expand its logistics portfolio and offer tech-driven services to support the fast-growing sector.
WHA Corporation Pcl. (“WHA Group”), Thailand’s leader in fully-integrated logistics and industrial facilities solutions, today announced it has acquired a 29.40% stake in Storage Asia Co., Ltd. (“Storage Asia”), a leading premium self-storage solution, under the brand “i-Store Self Storage”. The new acquisition is in line with WHA Group’s strategy to embrace new market opportunities through meaningful investments and create new value for its customers and industry as a whole.
As a leading developer of logistics solutions, commercial properties and industrial estates, WHA Group aims to constantly expand its business footprint, under its long-term strategy to create a value-added, innovation and one-stop service solution that supports customers’ needs as well as moves forward and grows sustainably in Thailand and across the region. As urbanization trend is on the rise, WHA Group has realized a great opportunity in the self-storage industry. The business has proven to be in high demand and continues to grow in the new era. People who are living and working in smaller spaces often have trouble managing their storage space. WHA Group has seen a great potential in the premium self-storage business, resulting to making its decision to invest in Storage Asia, a top player in the business.
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WHA Group Acquires Shares in Storage Asia to Expand its Integrated Logistics Portfolio
Established in 2015, Storage Asia is a leading private storage service business under the brand “i-Store Self Storage”, offering a wide range of high-quality and reliable private storage solutions. Its customers are both individuals and businesses who are looking for a secure space for their valuable belongings. Clients can enjoy a customized storage size that can fit their possession with the best self-storage service and highest quality. The company currently operates 2 branches in the heart of the cities; two in Bangkok (Silom branch and Sukhumvit Soi 24 branch) and will be opening two more branches in Sukhumvit 71 and Pattaya City in 1st quarter 2022, with a plan to expand its operations nationwide.
With the acquisition, WHA Group and Storage Asia will jointly create value-added services and solutions for their customers, offering a tailor-made solution package with the aim to support the business and its client requirements. The win-win alliance will streamline business operations.
“We are very excited about this new collaboration with Storage Asia. Branching out into new business territories to establish a sustainable and steady growth is part of our Corporate DNA,”
said Ms Jareeporn Jarukornsakul, Chairman and Group CEO, WHA Corporation Pcl. “Together, we will leverage on our expertise and know-how in logistics business to create enhanced self-storage services, using advanced technologies and innovation. The demand for smart, integrated solutions is here to stay. We are committed to driving business success with our partners, growing together sustainably and ready to support our customers’ needs including coping with suddenly disruption change. This collaboration is to fulfill and expand its logistics business as well as create synergy each other to have the value-added products and provide innovative services. Over the next few years, WHA Group will continue to seek new investment opportunities with the right partners to diversify its portfolio and contribute to sustainable economic growth for the country and the region,” she said.
“The acquisition definitely opens new business doors for Storage Asia,” said Mr. Pakdee Anivat, Chief Executive Officer of Storage Asia Co., Ltd. and Founder of i-Store Self Storage. “Through WHA Group’s regionwide network and strong relationship with key strategic partner, we can expand our client base to more sectors. We firmly believe we are in good hands with WHA Group. We are looking forward to creating innovative one-stop services with them, to tackle today’s space and logistics-related challenges,” he further commented.
Property firm AssetWise builds strong strategy to tackle Covid-19
AssetWise has procured Covid-19 vaccines through Chulabhorn Royal Academy for its staff, business partners and workers at its construction sites.
In response to the Covid-19 crisis, property company AssetWise has launched a “We Build Happiness” strategy, which provides health security to not just its staff and partners, but also homebuyers.
Strict safety measures
AssetWise has readied rapid antigen test kits for its business partners, homeowners and even potential buyers who have shown interest in its properties. The company has partnered up with some hospitals to tend to members of staff or partners who contract Covid-19 and also created guidelines for those needing to isolate at home or go into quarantine.
Facilitating vaccines
AssetWise has procured Covid-19 vaccines through Chulabhorn Royal Academy for its staff, business partners and workers at its construction sites. Before that, the company urged its staff members to register for a jab via the government system. Now, it can proudly claim that all its employees are fully vaccinated.
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Property firm AssetWise builds strong strategy to tackle Covid-19
The company has also bought Covid-19 insurance policies for its staff and is providing meals for those required to work in the office.
Workers’ welfare
When Bangkok authorities ordered the closure of all construction sites across the capital, AssetWise sent meals and fresh products to workers at its 12 construction sites.
Motivating medics
AssetWise collaborated with producers of the MasterChef Thailand TV show to provide special meals to medics at hospitals overwhelmed by Covid-19 patients, such as Bhumibol Adulyadej, Thammasat University, Siriraj and King Chulalongkorn Memorial. It has also made a large donation to the KMC Hospital.
Looking after society
The company continues donating food, sanitising gel and other necessities to communities, government units and the Ramintra Sports Park field hospital in Bangkok.
Property firm AssetWise builds strong strategy to tackle Covid-19
Fruit exports up almost 50% in first 7 months
PTG tapping strong growth in household LPG sector to expand market penetration
PTG tapping strong growth in household LPG sector to expand market penetration
PTG tapping strong growth in household LPG sector to expand market penetration
WHA Group Acquires Shares in Storage Asia to Expand its Integrated Logistics Portfolio
Property firm AssetWise builds strong strategy to tackle Covid-19
Property firm AssetWise builds strong strategy to tackle Covid-19
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