Stocks notched their biggest rally in five weeks as speculation the Federal Reserve will tighten policy at a gradual pace outweighed concern about the central banks hawkish pivot.
Arelative sense of calm returned to markets, with risk assets rebounding after last week’s sell-off. Energy, financial and industrial stocks drove gains in the S&P 500, while highflying tech companies underperformed. A gauge of small caps climbed more than 2%. Amazon.com Inc. fell as the online retail giant kicked off its Prime Day sale, with merchants curbing discounts amid rising shipping costs. Treasuries and the dollar retreated. Bitcoin sank as China intensified its cryptocurrency crackdown.
A number of influential voices said Monday the central bank’s outlook needs to be more attuned to inflation risks. Dallas Fed President Robert Kaplan said he favors starting the process of reducing bond purchases “sooner rather than later,” while his counterpart from St. Louis James Bullard called it “appropriate” that policymakers opened the taper debate. Former Treasury Secretary Lawrence Summers and billionaire investor Ray Dalio said the U.S. is headed for a period of overheating and inflation that could threaten the economic recovery.
Despite the more hawkish rhetoric from central bank officials, Fed tightening should happen at a much slower pace when compared to the rush to loose policy at the start of the pandemic, according to Charles Schwab & Co.’s Jeffrey Kleintop.
“The way back up in terms of rate hikes may be much more gradual, and that might allow economically sensitive stocks to perform well,” said Kleintop, chief global investment strategist at the firm.
These are some of the main moves in financial markets:
Stocks
– The S&P 500 rose 1.4% as of 4 p.m. EDT
– The Nasdaq 100 rose 0.6%
– The Dow Jones industrial average rose 1.8%
– The MSCI World index rose 0.8%
Currencies
– The Bloomberg Dollar Spot Index fell 0.4%
– The euro rose 0.5% to $1.1918
– The British pound rose 0.9% to $1.3932
– The Japanese yen was little changed at 110.28 per dollar
Bonds
– The yield on 10-year Treasurys advanced five basis points to 1.49%
– Germany’s 10-year yield advanced three basis points to -0.17%
– Britain’s 10-year yield advanced two basis points to 0.77%
Commodities
– West Texas Intermediate crude rose 2.8% to $73.62 a barrel
– Gold futures rose 0.8% to $1,783.20 an ounce
Published : June 22, 2021
By : Syndication Washington Post, Bloomberg · Rita Nazareth, Claire Ballentine
Oil may hit $100 a barrel next year on demand rebound, BofA says
Oil may surge to $100 a barrel next year as travel demand rebounds, Bank of America said, the strongest call yet among major forecasters for a return to triple digits.
Global oil consumption will continue to outstrip supply in 2022 as the economic recovery from the pandemic boosts fuel consumption, while investment in new production is crimped by environmental concerns, the bank said in a report.
“There is plenty of pent-up oil demand ready to be unleashed,” said Francisco Blanch, the bank’s New York-based head of commodities research. Brent futures traded near $74 a barrel on Monday.
While other market-watchers, from trading house Trafigura Group to Goldman Sachs Group, have already said that oil could reach $100 again in the right conditions, the prediction from Bank of America is the firmest to date.
If crude does return to triple digits, it will be the first time since 2014, before a flood of North American shale oil sent the market into a slump from which it has never fully recovered.
The increasingly bullish outlook for oil is adding to pressure on the OPEC+ coalition led by Saudi Arabia and Russia, which meets next week to consider reviving some more of the production it cut during the pandemic.
While Riyadh has signaled it prefers to move cautiously, an ever-tighter world market could compel the alliance to open the taps a little. Prices have been stoked this month as fellow OPEC member Iran fails to clinch an agreement to relieve U.S. sanctions on its petroleum exports.
According to Bank of America, the immediate prospects for the OPEC+ alliance are bright.
Oil consumption will be bolstered next year as mass transit struggles to keep pace with extra travel demand, prompting passengers to make greater use of private cars.
Even the ongoing popularity of remote working won’t dent fuel consumption as much as expected, as home-workers use cars during the day to run personal errands, the bank said.
“Work-from-home means ‘work-from-car’ in many cases,” Blanch said.
At the same time, the bank expects that new oil supplies will remain constrained. Shareholders will pressure major companies to invest in renewable energy, or push shale drillers to return cash rather than spend on new drilling.
Still, expectations for a tight market in 2022 are far from unanimous. A report from the International Energy Agency earlier this month showed that half of the projected increase in demand can be met by recovering output outside OPEC, predominantly from the U.S.
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That would leave the Organization of Petroleum Exporting Countries and its partners with significant quantities of idle output — and even more if Iran can strike a nuclear accord with the U.S. by then.
Published : June 22, 2021
By : Syndication Washington Post, Bloomberg · Grant Smith
Asean-Canada FTA expected to boost Thai GDP by 255bn baht
Thailand’s Trade Negotiations Department on Monday revealed progress in talks over an Asean-Canada free trade agreement (FTA) that is expected to boost Thai GDP by 255 billion baht.
Thai trade negotiators met virtually with their US and Canadian counterparts on June 14-15 to discuss the framework of the Asean-US Trade and Investment Agreement and the scope of the Asean-Canada FTA.
Progress was made in extending the Asean-Canada FTA to areas such as labour, the environment and state enterprises, department deputy director-general Sunart Nithi-Uthai reported.
Results from the talks will be presented to the Asean-Canada Economic Ministers Meeting in September so that FTA negotiations can begin this year, he added.
The Asean Secretariat’s study of the Canada FTA estimates it would boost Thailand’s GDP by 1.97 per cent or US$7.967 billion (about 254.944 billion baht). Meanwhile, Asean GDP would rise by an estimated 1.6 per cent or $39.361 billion (1.26 trillion baht), while Canada’s GDP would increase by 0.3 per cent or $5.104 billion (163.328 billion baht).
Business leaders push Prayut to lower credit bar for struggling SMEs
Prime Minister Prayut Chan-o-cha will hold talks with the Thai Chamber of Commerce on Wednesday (June 23) in a bid to boost liquidity for SMEs struggling to stay afloat during the pandemic.
The chamber will press the PM to inject financial institutions’ spare liquidity into small and medium enterprises (SMEs), including retail operators, at an acceptable risk level, revealed Sanan Angubolkul, chairman of the chamber’s board.
He said the government should have a central policy that encourages financial institutions to release more loans.
The chamber is also in talks with three commercial banks – Kasikorn, Siam Commercial and Bangkok Bank – for further SME debt-relief measures and will discuss the same with Thai Military Bank, Krung Thai Bank, and Kiatnakin Phatra Bank. It said the banks need to help debtors, but there are still restrictions that must be addressed.
Meanwhile the Finance Ministry’s asset warehousing project has received few applicants because its tight conditions caused worry among both commercial banks and debtors themselves, the chamber said. Debtors were worried about possible obstacles when it comes to retrieving their assets, while banks were worried that debtors who deposited assets with them might not return. The chamber also said the bar against credit bureau data being included in criteria for credit approval should be lifted, as it was preventing SMEs from accessing funding sources.
It also urged the government to accelerate its co-payment scheme subsidising 50 per cent of employee salaries as payments had lapsed for more than a year.
It urged the government to apply additional assistance measures, pointing out that incomes continue to decline in the face of Thailand’s ongoing third and biggest wave of Covid-19.
Thai Wah pursues corporate success with Sustainable Development Goals
In an era when people are adjusting themselves to cope with rapid changes in philosophy and technologies, the environment and sustainable development have now become important aspects to drive business growth apart from generating profits for shareholders.
The United Nations also has placed focus on these key aspects in the global interest.
Nation Thailand recently spoke to the chief executive officer of Thai Wah Public Company Limited, Ho Ren Hua, one of the new generation executives who prioritizes sustainable development.
As Thai Wah’s business is related to food and agricultural products, he is mindful that its policies could affect our stakeholders, such as several farmers and consumers, both domestic and overseas. Excerpts from the interview:
Q: Could you tell me briefly about Thai Wah.
A: Thai Wah is an agri-food company based in Bangkok. We’ve been around for almost 75 years. Currently we have 15 operations around the Asia Pacific region, including Thailand, China, Vietnam, Cambodia and Indonesia. Our core business is starch and starch-related food products. We run the largest vermicelli noodle operation in Thailand and Vietnam. Our brands, Double Dragon, Double Kirin and Phoenix, have close to 1 million consumers around the world. We are also one of the largest in the tapioca starch and food ingredients business in the region. People are used to starch ingredients, such as bubble tea, bakery mix, instant noodle, and processed food. Our third business is a new strategy, dealing in disposable and compostable plastic. These are the core businesses of Thai Wah. Our vision is Creating Innovation and Sustainability from Farm to Shelf.
Q: Let’s talk about the food company. In the past couple of years, a lot of food companies and FMCG [Fast Moving Consumer Goods] food and beverage firms are really serious about sustainability and the environment. They are using innovation for products and production. What is Thai Wah’s strategy for sustainable growth?
A: First of all, during Covid-19, I think, food safety and food hygiene are definitely very important. In fact, even before Covid-19, over the last few years, we have upgraded a lot of our facilities to make sure we have the highest quality of food safety and food hygiene to serve our customers. Over the last two years, we have innovated almost 10 to 15 new products every year, for example the vermicelli noodle, new products like “Pad Thai”, small rice noodle and large rice noodle, and we have more than seven different sub-brands in our rice noodle business. Last year, we also launched ready- to-eat products. The Thai Wah instant vermicelli noodle can be seen now in every 7-Eleven stores across Thailand. So, we have made efforts over the last two years, even before Covid-19, to continue to launch new innovative products to serve our customers.
Q: Recently Thai Wah became a member of UN Global Compact. How important is this step for Thai Wah?
A: It’s very important because I’ve always said that sustainability has to be part of our vision and part of our core strategy. Thai Wah’s long-term vision is Creating Innovation and Sustainability from Farm to Shelf. We have over 15 operations in the Asia Pacific. We have more than 3,000 associates in our work force. So, really making sure we can provide a sustainable meeting for everyone is very important to us. We have also stated that any strategy we follow will be in line with UN SDG [sustainable development goals]. And we take care of F4 in Thai Wah‘s sustainable strategies — Farm, Factory, Family and Food — where we basically look at different initiatives and different projects to tie in with our long-term sustainability strategy.
Thai Wah pursues corporate success with Sustainable Development Goals
Q: So what was Thai Wah’s role at the UN Global Compact Leaders Summit.
A: We were a part of the opening panel. I spoke at one of the keynote panels for the UN Global Compact and it was very good to share with all the other delegates from different countries on how companies can do more to drive sustainability. I spoke a bit about Thai Wah’s efforts in technology innovation. For example, we are now launching a new type of tech innovation for farmers in Thailand, and we are looking at different types of digital services for farmers, focusing how to improve their productivity. So, Thai Wah is seeking for new innovative Agri-Technology and smart farming solutions models for farmers. At the same time, I also spoke during the panel at the UN Global Compact. It’s very important for companies to take care of their people. Right now, we’re still in the middle of the Covid-19 crisis. So, it’s very important to make sure that all associates are safe and healthy and healthy hygiene is maintained. One of the key things for any company is to vaccinate its workforce as quickly as possible.
Q: We have heard about Thai Wah’s focus on sustainability to save the planet and the environment, and your focus on sustainable packaging, plant-based food, and use of applications for Thai Wah’s farmer network. Could you tell us about these three projects.
A: Recently, THAI WAH has innovated “ROSECO”, which is a unique type of thermoplastic starch resin derived from Tapioca starch and 100% disposable. It can be used in various applications such as shopping bags, plastic packaging, or plastic bottles and utensils. It can helps increase the sustainability of plastic products with our ROSECO functional thermoplastic biopolymers made from tapioca based, which can replace 30-50% of petroleum-based or compostable polymer resins without reducing the strength of the products or adding manufacturing steps. Reduce costs, improve quality, and reduce the carbon footprint. It can be used in various applications such as shopping bags, plastic packaging, or plastic bottles and utensils.
And finally, sustainable packaging that will be the first tapioca-based bioplastics. It will be launched by the end of this year, around November or December. This will be the first and pioneering tapioca-based bioplastic in Thailand. It’s mainly for the export market. We already have customers in China, Europe and in the US. In next 3-5 years, we target Thermoplastic Starch (TPS) line will generate sales around 10% of our total sales.
Thai Wah pursues corporate success with Sustainable Development Goals
Thai Wah pursues corporate success with Sustainable Development Goals
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For plant-based food, we are launching a new product this year, based on a plant-based protein. In Thailand, there are many different crops in many parts of the country, such as tapioca, rice, sugar cane, mung bean, for plant-based protein. We are looking at different raw materials to produce different protein for food applications for global needs. We’ve been doing a lot of R&D. And it’s essentially looking at how we can use protein from plant food from Thailand to serve the rest of the world. In terms of farm technology, we are starting to launch an application for farmers. We are dealing with a few thousand farmers around Thailand, including areas such as Udon Thani, Kalasin, Korat, Rayong, and Mae Sot, to promoting long-term community development through innovation that supports the building of sustainable communities, improve overall global supply chain and increase farmer livelihoods.
Thai Wah pursues corporate success with Sustainable Development Goals
Q: So, what are Thai Wah’s sustainable development goals?
A: As I mentioned, I think our goals about sustainability would tie in with the UN SDG. So, we thought of Farm, Factory, Family and Food. Currently, we’re starting to identify goals and carbon footprint reduction approaches in the organization through the entire value chain. We are now working through different audit and certifications, and plan to disclose and certify in the GHG emission verification within the second half of this year and expand the calculation to all starch plants in Thailand in 2022 and Vietnam in 2023. I understand the total Thai Wah value eco-system and how we can reduce our carbon footprint in the long term. Thai Wah pursues corporate success with Sustainable Development Goals
Q: Could you explain about the collaborative model for corporate action towards sustainable development goals?
A: I think it’s very important that companies work together, and companies work with the private sector and public sector to develop new types of innovation. No company can work alone, so it’s very important for Thai Wah to collaborate with many key universities in Thailand, strategic partners, other institutions, and startups, such as startups in the US and Vietnam for new solutions and new prototypes. Only through collaboration, you can bring in new ideas, because one company cannot do everything by itself.
Morocco becomes first Arab and African country to get SEAMEO associate member status
Morocco was granted the status of an associate member of the Southeast Asian Ministers of Education Organization (SEAMEO) during the 51st council conference, held on Thursday via videoconference.
Morocco’s ambassador to Thailand, Cambodia, Laos, and Myanmar, Abdelilah El Housni, took part in the conference.
Morocco is the first Arab and African country to obtain this status, reinforcing its position as a key partner in the region for the countries of Southeast Asia, Morocco’s embassy in Bangkok said in a statement.
This status, which confirms the strategic position of Morocco as a crossroads of cultures between the East, Africa and Europe, shows the trust placed in the Moroccan education system, the statement noted.
The embassy said it was an acknowledgement of King Mohammed VI’s role in promoting the education sector and a recognition of the actions undertaken by the Kingdom to build a modern Morocco.
The status supports the strategic guidelines of the Morocco’s New Development Model, particularly in the section devoted to positioning the country as a regional hub for higher education, research, and innovation.
It gives privileged access to Morocco for the promotion of cooperation with all countries of the Southeast Asian region in the fields of education, scientific research, and culture and paves the way for active participation in the programmes and projects of SEAMEO, the statement said.
SET slides towards 1,600 as foreign funds flow out
The Stock Exchange of Thailand (SET) Index closed at 1,601.13 on Monday, down 11.85 points or 0.73 per cent. Transactions totalled THB83.15 billion with an index high of 1,602.66 and a low of 1,590.55.
In the morning session, Krungsri Securities forecast Monday’s index would fall to between 1,600 and 1,605 points after the US Federal Reserve signalled an interest rate hike, triggering a stronger dollar and outflow of foreign funds.
However, it said the index would be buoyed by mass buy-ups of shares gaining positive sentiment from Thailand’s reopening, and stock to be listed on the FTSE, SET50, and SET100.
The 10 stocks with the highest trade value today were GUNKUL, PTT, KBANK, AOT, PTTGC, HANA, CPALL, KCE, SCB and SIRI.
Other Asian indices were mixed:
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Japan’s Nikkei Index closed at 28,010.93, down 953.15 points or 3.29 per cent.
China’s Shanghai SE Composite Index closed at 3,529.18, up 4.09 points or 0.12 per cent, while the Shenzhen SE Component Index closed at 14,641.29, up 57.62 points or 0.40 per cent.
Hong Kong’s Hang Seng Index closed at 28,489.00, down 312.27 points or 1.08 per cent.
South Korea’s KOSPI closed at 3,240.79, down 27.14 points or 0.83 per cent.
Taiwan’s TAIEX closed at 17,062.98, down 255.56 points or 1.48 per cent.
SET opens low due to uncertainty over US interest hike
The Stock Exchange of Thailand (SET) Index opened the week with an 18.27 points or 1.13 per cent drop to 1,594.71. The volume of total transactions stood at 10.78 billion baht with an index high of 1,601.12 and a low of 1,594.09.
The index closed at 1,612.98 on Friday, down 4.67 points or 0.29 per cent. Transactions totalled 110.18 billion baht with an index high of 1,622.43 and a low of 1,604.44.
Krungsri Securities predicts the SET Index will fall to between 1,600 and 1,605 points due to uncertainty over the US Federal Reserve’s signal on interest rate hike to deal with rising inflation, triggering strong dollar and outflow of foreign funds.
However, the index will be buoyed by mass buy-ups of shares gaining positive sentiment from Thailand’s reopening, and those to be listed on the FTSE, SET50, and SET100 Indices, it said.
Investors are recommended to buy:
▪︎ BCH, CHG, BDMS, MINT, CENTEL, ERW, AOT, CPALL, HMPRO, CPN, CRC, AAV, AMATA, WHA, BEM and BTS, which will benefit from the country reopening.
▪︎ KTC, OR, BEC, DCC, EGCO, JMART, KEX, PTL, PSL, RBF, RCL, SAK, STARK, TTA and TRUE, which will be listed on the FTSE Index from Monday.
▪︎ KCE, IRPC, STA and STGT, which will be listed on the SET50 Index on June 30.
▪︎ AAV, ICHI, NRF, PSL, PTL, SINGER, STGT, SYNEX and TKN, which will be listed on the SET100 Index on June 30.
The baht opened at 31.47 to the US dollar on Monday, weakening from 31.45 at close on Friday.
The Thai currency is likely to move between 31.40 and 31.55 during the day and between 31.20 and 31.60 this week, Krungthai Bank market strategist Poon Panichpibool said.
He said the baht would tend to weaken due to the dollar’s direction, gold trade and wariness of foreign investors.
Poon explained that the dollar would strengthen in the short term. He urged investors to watch out for the US Federal Reserve’s statement.
The market strategist said that the distribution of Covid-19 vaccine in Thailand had still not accelerated, raising concerns among foreign investors about Thailand’s economic recovery. This was prompting them to sell their stocks in the Thai market, pressuring the baht to weaken.
To draw the investors back, the Thai government must distribute at least 500,000 doses of vaccine a day, Poon added.
However, the baht would not weaken sharply, as exporters aim to sell dollars when the baht reaches around 31.50 to 31.60 to the US currency, he said.
The price of gold in Thailand rose by THB100 per baht weight in morning trade on Monday despite the strong dollar, due to the US Federal Reserve signalling interest rate hike earlier than expected.
The Gold Traders Association report at 9.28am showed the buying price of a gold bar at THB26,400 per baht weight and selling price at THB26,500, while gold ornaments were priced at THB25,923.60 and THB27,000, respectively.
At close on Saturday, the buying price of a gold bar was THB26,300 per baht weight and selling price THB26,400, while gold ornaments were priced at THB25,832.64 and THB26,900, respectively.
The price had fallen by THB1,250 per baht weight last week.
Spot gold on Monday was US$1,774 (THB55,935) per ounce after Comex gold on Friday dropped by $5.8 to $1,769 per ounce.
Hong Kong gold price on Monday dropped by HK$190 to $16,410 (THB66,644) per tael, the Chinese Gold and Silver Exchange Society reported.
Thai Wah pursues corporate success with Sustainable Development Goals
Thai Wah pursues corporate success with Sustainable Development Goals
Thai Wah pursues corporate success with Sustainable Development Goals
Thai Wah pursues corporate success with Sustainable Development Goals
Thai Wah pursues corporate success with Sustainable Development Goals
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