The new Covid-19 outbreak will have not affect the Thai bond market, the Thai Bond Market Association (ThaiBMA) said on Wednesday.
ThaiBMA president Tada Phutthitada said the pandemic would not trigger debt-payment defaults since debtors can request loan or debt moratoriums.
Meanwhile he did not expect foreign funds to flow into the bond market, explaining that the US 10-year bond yield has risen to 1.12 per cent compared to the Thai bond yield of 1.34 per cent, while foreign investors were focusing on risk assets whose value was increasing, such as Bitcoin and tech shares.
“From January 1 to January 13, foreign investors made net sales in bonds worth Bt8.26 billion, compared to net sales of Bt6.4 billion at the end of 2020,” he said.
The total value of Thai bonds issued this year will rise to Bt750 billion from Bt680 billion last year, he added.
“Meanwhile, the bond market’s total outstanding value this year will be Bt14.13 trillion, up 4.5 per cent from Bt13.52 trillion last year thanks to the increase in government bonds,” he said.
Tada added that the number of corporate bond issuances would decline as companies turned to loans from financial institutions at attractive interest rates.
“However, we expect private companies will still want to issue long-term bonds to deal with uncertainty,” he added.
The Stock Exchange of Thailand (SET) Index closed at 1,547.31 on Wednesday, up 7.46 points or 0.48 per cent. Total transactions amounted to Bt106.7 billion with an index high of 1,561.66 and a low of 1,542.42.
In the morning session, an analyst at Krungsri Securities forecast the day’s index would fluctuate between 1,530 and 1,550 points amid signs US President-elect Joe Biden would launch stimulus measures, and a rising oil price after Saudi Arabia cut production capacity by 1 million barrels per day.
However, the index would be pressured by its tight valuation at a price-to-earnings ratio of 30 times, the analyst said.
The 10 stocks with the highest trade value today were PTT, EA, GPSC, PTTEP, KBANK, AEONTS, PTTGC, SCGP, SCB and AOT.
As of 4.30pm, the price of oil rose by US$0.17 or 0.32 per cent to $53.38 per barrel, while gold rose by $6.90 or 0.37 per cent, to $1,851.10 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 28,456.59, up 292.25 points or 1.04 per cent.
China’s Shang Hai SE Composite Index closed at 3,598.65, down 9.69 points or 0.27 per cent, while Shenzhen SE Component Index closed at 15,365.43, down 94.60 points or 0.61 per cent.
Hong Kong’s Hang Seng Index closed at 28,235.60, down 41.15 points or 0.15 per cent.
South Korea’s KOSPI Index closed at 3,148.29, up 22.34 points or 0.71 per cent.
The share price of Krungthai Card (KTC) is skyrocketing on investors’ hopes that the company will grow in line with consumption.
KTBST Securities assistant manager for investment strategy Mongkol Puangpetra said the finance sector will be able to maintain its growth this year and the following years as its debtors are still paying interest regularly.
However, he advised investors who have KTC shares to continue holding them, while advising those who do not to wait for a price drop because the price is higher than the target value of Bt60 per share.
He also said that the securities company expected KTC net profit this year to increase by 6 per cent to Bt5.96 billion as the firm’s loans are expected to grow by 6 per cent, in line with the recovery in card spending.
“Meanwhile, the cost-to-income ratio is expected to be 39 per cent, according to the decline in marketing expenses and synergy with Krungthai Bank,” he added.
Blackstone buying Lucasfilm facility in Singapore for $132 million
CorporateJan 13. 2021Lucasfilm’s facility in Singapore is modeled after the Sandcrawler, a fictional vehicle in the “Star Wars” films. MUST CREDIT: Bloomberg photo by Nicky Loh
By Syndication Washington Post, Bloomberg · Faris Mokhtar
Blackstone Group Inc. is looking to purchase Lucasfilm’s building in Singapore for about $132 million (S$175 million), according to people familiar with the matter.
The company has started the process of buying the building known as The Sandcrawler, pending regulatory approval, the people said, requesting not to be named because the matter is private.
The move signals Singapore’s property assets continue to be attractive to foreign investors, who see the city’s political, financial and legal stability as an advantage. Other American companies including Amazon.com Inc. and Facebook Inc. are also expanding their presence, while China’s tech behemoths like Tencent Holdings Ltd. and ByteDance Ltd. are looking to make Singapore a beachhead for Southeast Asia.
The facility, located in central Singapore, has eight floors of office space. It also includes a retail shopping area, a 100-seat theater and lush gardens which accent its modern exterior. The building opened to much fanfare in September 2013, with Lucasfilm founder George Lucas and the city-state’s Prime Minister Lee Hsien Loong attending the launch.
Modeled after the Sandcrawler, a fictional vehicle featured in the “Star Wars” films, the building was used as the regional headquarters for the digital animation studio and also served as the base for The Walt Disney Company (Southeast Asia).
Singapore’s home prices are also seeing a recovery, rising to the highest in more than two years last quarter. The country forecasts a recovery from its worst recession since independence as covid vaccinations are rolled out and restrictions eased.
Export-Import Bank of Thailand (Exim Bank) on Tuesday launched a debt moratorium measure to help customers living in red-, orange- and yellow-coded provinces in order to mitigate the Covid-19 impact.
This measure will enable customers in all industries to request for up to six months moratorium on principal debt, while customers in industries related to food processing, frozen seafood, fruits and vegetables can request for up to three months moratorium on interest debt.
“Customers can request for a moratorium via the website www.exim.go.th or contact bank officials until March 31 this year,” Exim Bank President Pisit Serewiwattana said.
Pisit said the bank is closely monitoring the Covid-19 situation, adding the bank had granted debt moratorium to over 1,400 customers, totalling Bt36.85 million last year.
“This measure aims to relieve customers’ sufferings due to the Covid-19 outbreak, such as material and labour shortage, increasing import and export costs and buyers’ rejection of products,” he added.
The Stock Exchange of Thailand (SET) Index rose by 5.64 points, or 0.37 per cent, to 1,545.49 in the morning session on Wednesday.
An analyst at Krungsri Securities predicted the day’s index would fluctuate between 1,530 and 1,550 points amid signs US President-elect Joe Biden would launch economic stimulus measures and a rising oil price after Saudi Arabia cut its oil production capacity by 1 million barrels per day.
However, the index would be under pressure due to its tight valuation at a price-to-earnings ratio of 30 times, the analyst said.
He recommended investors buy:
> PTTEP, PTTGC, Top and IVL, which benefit from the rising oil price and improved fourth-quarter performance.
> PSL, TTA and RCL, which would benefit from a rise in the freight rate.
> KBank, SCB, BBL, KTB and BLA, which benefit from a rising US bond yield.
The SET Index closed at 1,539.85 on Tuesday, up 3.36 points, or 0.22 per cent. The volume of total transactions was Bt90.16 billion, with an index high of 1,542.65 points and a low of 1,528.50.
The price of gold dropped by Bt100 per baht weight in morning trade on Wednesday, the Gold Traders Association reported.
As of 9.26am, the buying price of a gold bar was Bt26,350 per baht weight and selling price Bt26,450 while gold ornaments cost Bt25,878.12 and Bt26,950, respectively.
At close on Tuesday, the buying price of a gold bar was Bt26,450 per baht weight and selling price Bt26,550 while gold ornaments cost Bt25,969.08 and Bt27,050, respectively.
The spot gold price moved to US$1,862 (Bt55,929) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February dropped by $6.60 to $1,844.20 per ounce on Tuesday due to an increase in the US bond yield.
The Hong Kong gold price rose by HK$10 to $17,180 (Bt66,550) per tael, the Chinese Gold and Silver Exchange Society reported.
By Syndication Washington Post, Bloomberg · Claire Ballentine, Kamaron Leach
U.S. stocks edged higher and benchmark Treasury note yields lingered at 10-month highs as investors mulled the prospects of the economic recovery and vaccine rollout.
The S&P 500 was little changed, with energy and consumer discretionary shares leading gainers. The Dow Jones Industrial and Nasdaq Composite were up more than the benchmark index. Crude oil approached a 11-month high as the dollar weakened following a three-day rally. Corn futures surged by the exchange limit to the highest level for a most-active contract since May 2014.
The mood across markets wasn’t overly negative as investors assess how the rise in Treasury yields changes the financial landscape. While progress on a vaccine gives reason to be hopeful, there are lingering concerns over the speculative excess and froth that’s driven stock markets to all-time highs in the middle of a pandemic.
“What I think investors are most focused on is the digesting of what is shifting fiscal policy,” said David Bianco, chief investment officer of the Americas at DWS Group. “We’re beginning to lose the anchor on some long-term key benchmark interest rates.”
Yields on Treasury 10-year notes pared an earlier rise after a government auction of $38 billion of the securities was met with solid demand. The spread between the rate on the two- and 10-year notes had risen every single day this year as investors bet on additional U.S. fiscal stimulus, spurring more bond issuance and higher yields on longer-maturity Treasuries.
In Washington, the House was set Tuesday to issue a largely futile ultimatum to Vice President Mike Pence demanding he invoke constitutional authority to remove President Donald Trump from office, as a prelude to an expected vote to impeach the president for the second time in little more than a year.
“I wrap up the market’s concerns into an easy-to-remember acronym – EIEIO – which stands for EPS-Impeachment-Energy Prices-Interest Rates-Overvaluation,” said CFRA Research Chief Investment Strategist Sam Stovall. “The market is vulnerable to a setback as many measures are at extremes, encouraged by the ‘Blue Ripple’s’ push for additional stimulus.”
Elsewhere, Europe’s Stoxx 600 Index traded little changed. After Bitcoin suffered steep declines on Monday, the largest cryptocurrency continued its wide swings.
In Asia, China’s CSI 300 Index rallied to a 13-year high, driven by a surge in financial and securities stocks. The yuan reached the highest since 2018 versus a basket of trading partners’ currencies on upbeat growth prospects.
Malaysia’s stock benchmark slipped as much as 1.6% after the nation’s king declared a state of emergency until August.
These are some of the main moves in markets:
Stocks
The S&P 500 Index was little changed at 3,801.19 as of 4:06 p.m. EST.
The Dow Jones industrial average rose 0.2% to 31,068.69.
The Nasdaq Composite Index climbed 0.3% to 13,072.43.
The Stoxx Europe 600 Index was little changed at 408.61.
The MSCI All-Country World Index jumped 0.3% to 660.66.
Currencies
The Bloomberg Dollar Spot Index sank 0.6% to 1,120.16, the biggest dip in almost six weeks.
The euro increased 0.5% to $1.2205, the largest increase in more than three weeks.
The British pound jumped 1.1% to $1.3667, the strongest in more than a week on the biggest jump in more than two months.
The Japanese yen strengthened 0.5% to 103.73 per dollar, the first advance in a week and the largest climb in more than five weeks.
Bonds
The yield on 10-year Treasurys dipped one basis point to 1.13%, the first retreat in more than a week.
Germany’s 10-year yield gained three basis points to -0.47%, the highest in more than four months.
Britain’s 10-year yield increased four basis points to 0.352%, reaching the highest in almost six weeks on its sixth straight advance and the biggest climb in almost three weeks.
Commodities
West Texas Intermediate crude increased 1.7% to $53.15 a barrel, hitting the highest in almost a year with its sixth consecutive advance.
Silver strengthened 2.7% to $25.57 per ounce, the first advance in a week.
By Syndication Washington Post, Bloomberg · Eric Lam
Bitcoin rebounded after Monday’s steep plunge left investors grasping for clues about what lies ahead for the world’s largest cryptocurrency.
The digital coin rose 4.9% to $35,616 as of 11:30 a.m. in London, following yesterday’s 11% slide. The latest bout of roller-coaster volatility recalls past boom and bust cycles including the 2017 bubble, and has investors debating whether this is a healthy correction or the end of the latest bull run for cryptocurrencies.
“We think a pull back is healthy,” said David Grider, lead digital strategist with Fundstrat Global Advisors, who added he doesn’t think the recent price action indicates that Bitcoin has already topped out.
Investors who bought the digital coin a year ago are still sitting on gains exceeding 300%. Pinpointing who is mainly responsible for the rally is one of the many crypto mysteries — Bitcoin funds, momentum chasers, billionaires, day traders, companies and even institutional investors have all been cited.
Just as hard is working out what caused the recent two-day drop of as much as 26%. For some, a bounce in the dollar may be among the reasons. The greenback has snapped a prolonged losing streak after rising U.S. government bond yields bolstered its allure.
“There’s signs that retail investors are taking profit,” said Ryan Rabaglia, the global head of trading at OSL. “Heightened volatility is often correlated with an uptick in retail participation.”
At the same time, the world remains awash with monetary and fiscal stimulus, and some of that wall of money could yet gravitate to crypto assets. Bitcoin believers continue to tout the digital currency as a viable hedge for inflation risk and the potential debasement of fiat currencies. Some forecasts for its long-term price range from $146,000 to $400,000.
The Thai automotive industry is likely to expand 3-4 per cent in 2021-23 after a tough 2020, Krungsri Research Centre said.
Last year, businesses were hit hard by the spread of Covid-19, which led to car production falling by 32-33 per cent, or 1.35 million to 1.37 million units. Domestic sales dropped to about 710,000 vehicles, down 30-31 per cent, and vehicle exports fell by 700,000 vehicles, by 34-35 per cent.
The auto industry in 2021-23 will have supporting factors such as domestic sales that are expected to grow at an average of 3-4 per cent in line with the economic conditions that gradually recover, the research centre said.
It is expected that the demand for commercial vehicles would expand well, benefiting from the growth of the construction sector, online retail business, and logistics business.
In addition, auto companies plan to continuously launch new models, including electric cars and combustion engine cars.
However, the sales growth rate is likely to be limited due to fall in purchasing power, but consumers are expected to recover gradually in line with the economic direction, the centre said. Household debt remains high and financial institutions remain strict in approving credit.
The automobile export market is expected to grow on average 4-5 per cent, driven by the gradual global economic recovery. In addition the Asean Free Trade Area support for export in the region, as well as establishing mutual recognition agreements in the Asean region on inspection and certification of automotive and parts safety standards, would help reduce the re-inspection process, the centre said.
Risk factors to be watched include uncertainty over the trade conflict between the US and China, and the Philippines — one of the major export markets — raising tariffs on imported cars from Thailand in response to a trade dispute over pricing of imported cigarettes by Manila, as well as many governments around the world pushing policies to support the use of electric cars, which may affect Thailand’s car exports, almost all of which are combustion engines.
New car dealers expect that in the next three years (2021-2023), business revenue is likely to see limited growth. Revenue from new car sales will expand in line with domestic car sales, with expected average growth of 3-4 per cent per year.
Revenue from maintenance and distribution centres would tend to decline following the decline in the number of registered cars aged less than five years, despite demand for car maintenance based on car age and distance, the centre said. There is still a risk that some car users may switch to general car repair shops.
In addition, the business is also under pressure from the automotive policy, including the policy for dealers to invest in improving showrooms and service centres to meet standards. It will increase the cost burden of operators and the policy to penetrate the online market. This may lead to more intense competition between dealers because buyers have easy access to information.
The second-hand car market will be sluggish in the first nine months of this year. Due to price competition, operators will release stocks due to their need to reduce the interest burden and the cost of maintenance. However, at the end of the year, low used-car prices would motivate purchases, the centre said.
In addition, buyers are concerned about the risk of using public vehicles due to Covid-19, and may decide to buy a used car.
However, the trend of the used-car market in 2021-23 is expected to grow in line with the recovery of purchasing power in the country. The price of used cars will gradually increase due to the slowdown in the supply of old cars in the first car market.
The competition is likely to become more intense as it is expected that more new entrepreneurs will enter the market from the expansion of multinational companies and affiliates of the carmakers which may pressure business performance, most of which are SMEs.
Lucasfilm’s facility in Singapore is modeled after the Sandcrawler, a fictional vehicle in the “Star Wars” films. MUST CREDIT: Bloomberg photo by Nicky Loh
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