SET under short-term pressure as investors keep an eye on US Fed meeting
The Stock Exchange of Thailand (SET) Index rose by 0.09 points, or 0.01 per cent, to 1,559.62 in the morning session on Tuesday. The volume of total transactions was THB11.70 billion with an index high of 1,564.87 and a low of 1,558.75.
AKrungsri Securities analyst forecast the SET Index would fluctuate between 1,550 and 1,570 as investors would delay their investments to follow the US Federal Reserve meeting on April 27-28.
It is expected that the Fed would maintain the interest rate at 0.25 per cent and continue the quantitative easing policy.
He said uncertainty over higher Covid-19 cases in Thailand and volatility in foreign funds flow would pressure the index.
“However, the index would rebound from investors speculating on stocks that gain positive sentiment and whose first-quarter performance is likely to improve,” he said.
He recommended that investors buy:
▪︎ PSL, TTA and RCL, which would benefit from a rise in the freight rate.
▪︎ HANA, KCE, SMT, TU and CPF, which benefit from the weakening baht.
▪︎ PTTGC, IVL, EPG, SCGP, SCC, CPF, BCH, CHG, STGT, GLOBAL, DOHOME, COM7, SYNEX, STARK and TWPC, whose fourth-quarter turnover is expected to improve.
The SET Index closed at 1,559.53 on Monday, up 5.94 points or 0.38 per cent. Total transactions amounted to THB83 billion with an index high of 1,561.52 and a low of 1,544.10.
The price of gold in Thailand dropped by THB50 per baht weight in morning trade on Tuesday as the global market is keeping an eye on the US Federal Reserve meeting on April 27-28 and US first-quarter gross domestic product data.
The Thai Gold Traders Association report at 9.29am showed buying price of a gold bar at THB26,350 per baht weight and selling price at THB26,450, while gold ornaments were priced at THB25,878.12 and THB26,950, respectively.
At close on Monday, the buying price of a gold bar was THB26,400 per baht weight and selling price THB26,500, while gold ornaments were THB25,923.60 and THB27,000, respectively.
Spot gold price on Tuesday was US$1,775 (THB55,853) per ounce compared to Monday when it rose by $2.3 to $1,780.1 per ounce.
Hong Kong gold price on Tuesday rose by HK$10 to $16,490 (THB66,863) per tael, the Chinese Gold and Silver Exchange Society reported.
Struggling hoteliers eye the exit as occupancy plummets
The fresh wave of Covid-19 has severely affected tourism and hospitality businesses in Thailand with occupancy rates at domestic hotels dropping to 5-30 per cent, forcing many operators to sell their businesses to cut losses, said Thammajak Leuangprasert, president of Arjarnnar Asset Management Group.
“Some hotels affected by the outbreak for more than a year have managed to stay afloat with the help of soft loans and the debt moratorium programme, while some have decided to sell their businesses to foreign investment groups,” he said. “Currently there are European and Chinese companies looking to buy 4-5 star hotels in Thailand priced at over Bt2 billion, while 3-star hotels are also desirable provided they are in a prime location.
“Investors are eyeing hotels in Thailand as our country is a prominent tourism destination, while the outbreak has driven the selling price down and makes it an excellent opportunity to buy,” he added.
In addition to hotels, foreign investors are also interested in the hostel business in Thailand and neighbouring countries as well.
Edmund Lowman, CEO of Collective Hospitality Group, said that the company had invested Bt450 million in buying the Bodega Hostel Group, which manages hostels offering over 2,500 beds in Thailand, Indonesia and Cambodia. This move has made the Collective Hospitality Group the biggest hostel operator in Asean and the fourth biggest in the world.
Meanwhile, Marisa Sukosol Nunbhakdi, president of Thai Hotels Association, has said that due to the Covid-19 third wave, hotel operators nationwide are in need of financial aid from the government.
“The government’s soft loan and debt moratorium programme only partly helped the hotel industry,” she said. “What we really need is a co-payment programme that would help pay half of employee wages to keep the business afloat and maintain employment.”
U.S. equities headed for all-time highs amid solid corporate earnings and confidence that the Federal Reserve will remain accommodating even as robust growth takes the worlds largest economy back to pre-pandemic levels.
The S&P 500 rose after notching its first weekly decline since mid-March. Most of the main 11 industry groups gained, with energy shares jumping the most. Small-cap stocks in the Russell 2000 outperformed the broader market. The U.S. 10-year Treasury yield hovered around its 50-day moving average. Copper, seen as a barometer of growth, surged to the highest in a decade.
Investors this week will focus on corporate earnings and U.S. economic data even as the Fed primes them to expect no change to policy at their two-day meeting ending Wednesday. While emerging economies from India to Brazil are grappling with a covid-19 surge or renewed curbs, the developed world is on a firmer recovery path with a faster pace of vaccination.
“The Fed is going to likely reiterate their patient stance here,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “I’m anticipating that they acknowledge the recent strength we’ve seen in economic data but they will continue to highlight we are a ways away from achieving their goal of full employment. I think they’ll continue to assure markets that Fed policy is going to remain firmly dovish for some time.”
Data on Thursday may show U.S. gross domestic product increased at a 6.9% annualized pace from January through March after a more moderate 4.3% rate in the previous quarter. Other reports this week may show a pickup in consumer confidence and robust personal spending. Recent indicators cemented economic optimism, with durable-goods orders rebounding in March and output at manufacturers and service providers reaching a record high in April.
More than three-quarters of the S&P 500 companies that have reported results so far have beaten analysts’ estimates, according to data compiled by Bloomberg. A slew of earnings from megacaps including Tesla Inc., Facebook Inc. and Apple Inc. will be parsed this week as investors look for more clues on how companies are faring in the recovery.
“We’re gearing up for a busy week on all fronts, said Chris Larkin, managing director of trading and investing product at E*Trade Financial. “Big tech earnings, a look into Q1 GDP, and the Fed meeting could create catalysts for market moves. Though despite the strong earnings reports we’ve seen thus far, the market is really taking beats in stride amid already high valuations.”
European stocks advanced Monday, as gains for banks and travel companies offset losses for food companies and utilities. The dollar was little changed after initially falling to a two-month low. It was still on course for the biggest monthly drop this year.
Oil retreated amid concern demand from India may fall after the nation reported a million new coronavirus cases in three days.
These are some of the main moves in markets:
Stocks
The S&P 500 rose 0.2% to a record high as of 4 p.m. EDT
The Dow Jones industrial average slipped 0.2%
The Russell 2000 Index rose 1.2%
The Stoxx Europe 600 rose 0.3%
The MSCI Emerging Markets Index rose 0.6%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.2089
The British pound rose 0.2% to $1.3905
The Japanese yen fell 0.2% to 108.13 per dollar
Bonds
The yield on 10-year Treasurys advanced one basis point to 1.57%
Germany’s 10-year yield was little changed at -0.25%
Britain’s 10-year yield advanced one basis point to 0.76%
Commodities
West Texas Intermediate crude fell 0.3% to $62 a barrel
Gold futures rose 0.2% to $1,781 an ounce
Published : April 27, 2021
By : Syndication Washington Post, Bloomberg · Claire Ballentine, Vildana Hajric
The Japan Credit Rating (JCR) Agency has maintained Thailand’s credit-rating ceiling at “A-” with a “stable” outlook, the Finance Ministry reported on Monday.
Patricia Mongkhonvanit, director-general of the ministry’s Public Debt Management Office (PDMO), said the rating remained stable despite the serious impact of Covid-19 on the Thai economy – especially exports and tourism. The rating for Thailand stayed level because the government had launched a THB1.9-trillion rescue package, boosting economic recovery since the second quarter of 2020, said Patricia.
JCR projects Thai GDP will recover from a 6-per-cent drop last year to grow 3 per cent this year.
The government has also resolved to run a budget deficit to support fiscal measures to boost recovery, resulting in a higher debt to GDP ratio. JCR said it remained confident that the government would be able to maintain fiscal stability and manage public debt at an appropriate level.
Meanwhile, JCR said Thailand’s banking sector remained stable while trade is strong with a current account surplus and high international reserves. As a result, Thailand still has capacity to take further measures to cope with any unexpected future situations, said the Japanese agency.
However, JCR said it was closely monitoring Thailand’s political uncertainty along with policy reform related to development of the high-tech manufacturing industry.
The Stock Exchange of Thailand (SET) Index closed at 1,559.53 on Monday, up 5.94 points or 0.38 per cent. Total transactions amounted to THB83 billion with an index high of 1,561.52 and a low of 1,544.10.
In the morning session, Krungsri Securities forecast Monday’s SET Index would fall to between 1,530 and 1,540 amid the rising number of Covid-19 cases in Thailand and outflow of foreign funds.
It added that foreign investors had made net sales for five days in a row worth a total THB8.7 billion.
“However, the index will rebound as investors speculate on stocks with positive sentiment and on companies whose first-quarter performance is likely to show improvement,” said Krungsri Securities.
It advised investors to follow the US Federal Reserve meeting on April 27-28, when the Fed is expected to maintain the interest rate at 0.25 per cent and retain quantitative easing.
The 10 stocks with the highest trade value today were KBANK, BFIT, BCH, SAWAD, BDMS, SCC, CPALL, SCB, PTTGC and PTT.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 29,126.23, up 105.60 points or 0.36 per cent.
China’s Shang Hai SE Composite Index closed at 3,441.17, down 33.00 points or 0.95 per cent, while Shenzhen SE Component Index closed at 14,224.45, down 127.41 points or 0.89 per cent.
Hong Kong’s Hang Seng Index closed at 28,952.83, down 125.92 points or 0.43 per cent.
South Korea’s KOSPI closed at 3,217.53, up 31.43 points or 0.99 per cent.
Taiwan’s TAIEX Index closed at 17,572.29, up 272.02 points or 1.57 per cent.
Gold shines brighter for Thai investors as global prices drop, baht strengthens
Gold trading in Thailand has been livelier when compared to global markets, YLG Bullion and Futures (YLG) said on Monday.
Tipa Nawawattanasub, YLGs’ chief executive officer, said Thai investors had started buying back gold as it gained positive sentiment from a drop in global market prices and the strengthening of the baht, which brought the price of gold in Thailand to its lowest in a year at THB24,400 per baht weight.
She said the number of gold saving accounts in the first three months of this year had risen by 851 per cent compared to the same period last year and by 200 per cent compared to the fourth quarter last year.
“We believe more investors will open gold saving account in line with the direction of precious metal’s price,” she said.
“We have also found that investment in gold bars is still the most popular compared to other types of precious metal investment.”
She said investors turned from risk assets to safe-haven assets as they were worried about the impact of the Covid-19 outbreak on the economic recovery.
“Meanwhile, the price of gold in Thailand had fallen below the global market price. As of April 21, the price of gold in Thailand dropped by THB400 per baht weight or 1.49 per cent compared to the US$112 per ounce or 5.94 per cent drop in global market,” she said.
She expects the price of gold in the middle term to move sideways down with a support line of between THB24,400 and THB24,800 per baht weight and resistance line at THB29,050 per baht weight.
“The price may fall to its lowest at THB22,650 per baht weight or rise to the historic high in August last year at THB30,750 per baht weight,” she added.
Worsening Covid-19 crisis, foreign funds outflow to pressure SET downwards
The Stock Exchange of Thailand (SET) Index rose by 1.71 points, or 0.11 per cent, to 1,555.30 in the morning session on Friday. The volume of total transactions was THB15.07 billion with an index high of 1,555.97 and a low of 1,544.10.
AKrungsri Securities analyst forecast that the SET Index would fall to between 1,530 and 1,540 due to uncertainty over the rising number of Covid-19 cases in Thailand and outflow of foreign funds.
He added that foreign investors had made net sales of shares for five consecutive days worth approximately THB8.7 billion.
“However, the index would rebound from investors’ move to speculate on stocks with positive sentiment and whose first-quarter performance is likely to show improvement,” he said.
He advised investors to follow the US Federal Reserve meeting on April 27-28, as the Fed was likely to maintain the interest rate at 0.25 per cent and continue using quantitative easing.
He recommended that investors buy:
▪︎ PSL, TTA and RCL, which would benefit from a rise in the freight rate.
▪︎ HANA, KCE, TU, CPF and EPG, which benefit from the weakening baht.
▪︎ PTTGC, IVL, EPG, SCGP, SCC, CPF, BCH, CHG, STGT, GLOBAL, DOHOME, COM7, SYNEX, STARK and TWPC, whose fourth-quarter turnover is expected to improve.
The SET Index closed at 1,553.59 on Friday, down 14.62 points or 0.93 per cent. The volume of total transactions was THB86.15 billion with an index high of 1,564.62 and a low of 1,550.62.
Baht opens firm, but likely to weaken in the short term
The baht opened at 31.40 to the US dollar on Monday, unchanged from its close on Friday. The Thai currency is likely to move between 31.35 and 31.45 during the day and between 31.25 and 31.60 this week, Krungthai Bank market strategist Poon Panichpibool said.
He said the baht may weaken in the short term due to the intensified Covid-19 crisis in Thailand.
The baht could weaken slightly, as exporters aimed to sell the dollar when it touched 31.50 to the US dollar.
Another country where the currency could fluctuate was India, where the Covid-19 crisis was severe, he added.
Gold opens firm despite strong US economic data, higher bond yield
The price of gold in Thailand in morning trade on Monday was unchanged from Saturdays close amid strong US economic data and rising US bond yield.
The Gold Traders Association report at 9.26am showed buying price of a gold bar at THB26,350 per baht weight and selling price at THB26,450, while gold ornaments were priced at THB25,878.12 and THB26,950, respectively.
Gold price had risen by THB250 per baht weight last week.
Spot gold price on Monday was US$1,788 (THB56,161) per ounce compared to Friday when it fell by $4.2 to $1,777.8 per ounce.
Hong Kong gold price on Friday fell by HK$70 to $16,500 (THB66,789) per tael, the Chinese Gold and Silver Exchange Society reported.
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