Kulit Sombatsiri, the ministry’s permanent secretary
By The Nation
The Energy Ministry has kicked off the process of drawing up what it calls Thailand’s integrated energy blueprint on Monday by holding a workshop on the plan with relevant parties.
Kulit Sombatsiri, the ministry’s permanent secretary, said the plan is divided into a five-year short-term plan (2022-2027), a five to 10 year mid-term plan and a 20-year long-term plan.
The Cabinet had in October asked the ministry to put together five energy plans issued in 2018, namely power development, alternative energy development, energy conservation, gas management and oil plan.
The ministry will hold a public hearing on the combined plan after next March and started drawing up a preliminary strategy in April.
He added that the integrated plan will not raise the ratio of coal-fired power plants and will retire old gas and coal-power plants early.
Thailand will also set a target for net-zero carbon emissions, he added.
The Labour Ministry will ask the Cabinet on Tuesday to approve a reduction in workers’ and companies’ social security contributions from 5 per cent to 3 per cent of wages from January to March.
The reduction will cost Bt21 billion.
Social security contributions were cut to 2 per cent from September-November this year in a move to mitigate the impact of the Covid-19 pandemic.
Minister Suchart Chomklin described the latest proposal as a “New Year gift” to Thais.
Easy to tell if ‘coronation’ banknotes are genuine, says BOT
EconDec 14. 2020A sample of the Bt1,000 and Bt100 commemorative banknotes.
By The Nation
The Bank of Thailand (BOT) has responded to criticism of its recently issued commemorative Bt1,000 and Bt100 banknotes, insisting they have high standard anti-counterfeiting features and are easy to tell apart.
BOT deputy governor Paiboon Kittisrikangwan said the special banknotes issued to commemorate King Rama X’s coronation are safe thanks to advanced techniques used in their design.
The central bank issued the statement after netizens on social media complained of the similarity between the commemorative banknotes.
People could easily prove whether the notes were genuine, for example, by touching the raised figure indicating the note’s value at the corner, he said.
Meanwhile, the notes were easy to tell apart since the Bt1,000 version is 1.2 centimetres longer than the Bt100 bill. The number indicating their value is also prominently displayed, he added.
A total of 10 million Bt1,000 and 20 million Bt100 commemorative banknotes went into circulation on December 12.
The Stock Exchange of Thailand (SET) Index closed at 1,476.13 on Monday, down 6.54 points or 0.44 per cent. Total transactions amounted to Bt107.3 billion with an index high of 1,495.18 and a low of 1,471.56.
In the morning session, an analyst at Krungsri Securities expected the day’s index to fluctuate between 1,470 and 1,500 amid an influx of foreign funds in response to positive news of Covid-19 vaccines.
“However, the SET will face volatility due to the tight valuation at a price-to-earnings ratio of 29 times and a resistance line at 1,500 points,” he said.
The 10 stocks with the highest trade value today were CPALL, KBANK, ADVANC, AOT, PTT, BAM, DELTA, IRPC, STGT and PTTGC.
As of 4.30pm, the price of oil rose by US$0.47 or 1.01 per cent to $47.04 per barrel, while gold dropped by $14.90 or 0.81 per cent, to $1,828.70 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 26,732.44, up 79.92 points or 0.30 per cent.
China’s Shang Hai SE Composite Index closed at 3,369.12, up 21.93 points or 0.66 per cent, while Shenzhen SE Component Index closed at 13,692.13, up 136.99 points or 1.01 per cent.
Hong Kong’s Hang Seng Index closed at 26,389.52, down 116.35 points or 0.44 per cent.
South Korea’s KOSPI Index closed at 2,762.20, down 7.86 points or 0.28 per cent.
Taiwan’s TAIEX Index closed at 14,211.05, down 50.64 points or 0.36 per cent.
The Stock Exchange of Thailand (SET) Index rose by 6.77 points, or 0.46 per cent, to 1,489.44 in the morning session on Monday.
An analyst at Krungsri Securities expected the day’s index to fluctuate between 1,470 and 1,500 amid the influx of foreign funds in response to positive news of a Covid-19 vaccine.
“However, the SET would face volatility due to tight valuation at price to earnings of 29 times and the resistance line at 1,500 points,” he said.
He recommended that investors buy:
▪︎ PTTEP, PTTGC, TOP, IVL and SPRC that benefit from rising oil price.
▪︎ MINT, CENTEL and AOT that benefit from positive news of a Covid-19 vaccine.
▪︎ Laggard shares in the SET 50 Index, such as EGCO, DTAC, KTB, TMB and SCB.
The SET Index closed at 1,482.67 on Wednesday, up 3.75 points or 0.25 per cent. Total transactions amounted to Bt123.39 billion with an index high of 1,503.89 and a low of 1,474.83.
The SET was closed on Thursday and Friday for Constitution Day.
The price of gold dropped by Bt50 per baht weight in the morning trade on Monday after rising Bt100 per baht weight at closing on Saturday, the Gold Traders Association reported.
As of 9.28am, the buying price of a gold bar was Bt26,100 per baht weight and selling price Bt26,200, while gold ornaments cost Bt25,635.56 and Bt26,700, respectively.
On Saturday’s close, the buying price of a gold bar was Bt26,150 per baht weight and selling price Bt26,250, while gold ornaments cost Bt25,681.04 and Bt26,750, respectively. The price dropped slightly by Bt50 per baht weight last week.
The spot gold price moved to US$1,836 (Bt55,233) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February next year rose by $6.2 to $1,843.6 per ounce on Friday. All thanks to mass buy-ups of the precious metal amid uncertainty over the US rollout of economic stimulus package, no-deal Brexit and signs of dollar inflation.
In Hong Kong, gold rose by HK$30 to HK$16,970 (Bt65,862) per tael, the Chinese Gold and Silver Exchange Society reported.
The government co-payment scheme covering the salaries of new graduates is falling short of its target to generate 260,000 new jobs, said Labour Minister Suchart Chomklin.
The Cabinet has approved a budget of Bt20 billion to spur recruitment of new graduates by paying 50 per cent of their salaries for the first year.
However, only 20,000 new jobs were created under the scheme as of October, said Suchart.
The minister said he would evaluate the effectiveness of the scheme until April, when a fresh batch of new graduates will be seeking jobs. Depending on that evaluation, the scheme’s remaining budget might be transferred to help recruitment in the tourism industry, he added. The tourism sector is currently facing severe impacts from the Covid-19 pandemic.
Suchart suggested the poor response to the scheme was due to major companies preferring to recruit people on long-term contracts during the economic recovery, rather than the year offered under the scheme.
And though the scheme seemed to fit the needs of small and medium-sized enterprises, SMEs were not hiring workers at this time of economic downturn, he added.
Four major Thai banks say they will focus on managing their asset quality instead of dumping non-performing loans under unfavourable market conditions.
Payong Srivanich, president of Krungthai Bank, said KTB’s priority was to maintain asset quality and look after debtors. He expects the bank’s non-performing loans to remain flat at the 4.21 per cent of total loans registered in the third quarter.
He said KTB regularly sells its non-performing asset (NPAs) as part of debt management measures, but the large volume now being sold made the market unfavourable.
“If we can’t get good prices for our NPAs, we will not sell them,” he said.
The bank is also cutting its exposure to concentrated risks. For example, it is reducing the proportion of total industrial loans to the rice sector from 60 per cent, and has cut lending to cooperatives from Bt70 billion to Bt30 billion, all of which must be backed by collateral.
Kasikornbank CEO Kattiya Indaravijaya said it, too, was choosing to manage bad debts rather than sell them on. The bank is supporting customers by restructuring their loan conditions to manage bad debt.
“We are confident that we can manage bad debts better than in the past when we usually chose to sell them on,” said Kattiya.
Deja Tulananda, chairman of Bangkok Bank’s board of executive directors, said its priority was to preserve asset quality rather than sell bad debt. By doing so, the bank could cover loans and also benefit borrowers, he assured.
“We remain focused on debt management and, under the central bank’s supporting policy, we are confident that we can take better care of our debtors and prevent bad debt from rising,” he said.
Piti Tantakasem, CEO at TMB Bank, said the bank will maintain its push for provisions against risk assets begun in the third quarter. Currently, NPLs were not high, accounting for just 2.3-2.4 per cent of total loans and should not exceed 3 per cent by the end of this year, he said.
The bank will delay selling NPAs this year in order to avoid flooding the market, he added.
Covid-19 second wave to hit year-end spending by Bt16 billion, economist warns
EconDec 13. 2020A tourist looks out at the Khanom-Sichon Sea in Nakhon Si Thammarat province on December 10.
By The Nation
The second wave of the Covid-19 outbreak will cost local tourism around Bt16 billion during the New Year holidays, says an economist.
Anusorn Tamajai, former dean at Rangsit University’s Faculty of Economics, estimated that the second wave of Covid-19 infections would cost the local tourism industry Bt14.1 to Bt16.9 billion in lost revenue during the New Year festival.
His analysis comes amid rising cases of local infections after some infected patients entered Thailand illegally from Myanmar. While the United States has the most number of cases with over 16.5 million, followed by India — almost 10 million — Thailand ranks 151st among countries with over 4,000 cases.
He was optimistic that the number of new cases in Thailand would be contained as the government had put in place an effective tracing system.
Prime Minister Prayut Chan-o-cha earlier insisted that Thailand had not yet experienced a second wave.
Anusorn, however, said that concerns over the rising number of new cases was expected to discourage many people from travelling and spending during the year-end holiday season.
Revenue from Thai travellers during the last New Year was Bt28 billion. Many research houses have estimated that Thai consumers will cut their spending significantly while those who live in Bangkok are expected to spend about Bt30 billion, but it is below the average spending of the past two decades, he said.
Anusorn, however, added that if Thailand could not contain the second wave the Thai economy next year may grow less than 4 per cent, while the rising number of new cases in Thailand’s trading partner countries would adversely affect Thai exports up to the first quarter of next year.
The National Economic and Social Development Council has forecast that the Thai economy will expand 4 to 5 per cent next year.
Regarding financial markets, Anusorn predicted that gold price would test a barrier at US$2,000 per ounce, as investors are worried about risk assets stemming from the delay in the US stimulus package and the possibility of a no-deal Brexit.
In the short run, gold price next week may move up to $1,845 to 1,850 per ounce, he said, while gold bar in Thailand may rise to Bt26,150 to 26,600 per baht weight.
The Thai baht is expected to appreciate further after it rose almost 4 per cent last month. The baht could rise to Bt29.50 per dollar by the end of this year, strengthening from the Bt30 level, he predicted. Foreign investors had net buys of Thai stocks worth Bt50 billion over one month and bonds worth Bt20 billion. They could sell Thai financial assets to make a profit before Christmas, he warned.
Meanwhile, the rising unemployed benefit claims in the US had put high pressure on the dollar, he said.
The US economy has shown signs of decelerating at the end of this year. The return of the global economy to normal next year would depend on the effectiveness of the Covid-19 vaccines, he said.
He did not expect the US Federal Reserve and Bank of Japan to further loosen monetary policies during their meeting next week.
By The Washington Post · David J. Lynch · NATIONAL, BUSINESS, WORLD, US-GLOBAL-MARKETS
It takes more than mass death and suffering to throw Wall Street off stride.
The coronavirus may be killing 3,000 Americans each day while lawmakers bicker over how to help the wounded U.S. economy. Yet stock prices keep powering higher. By one measure, shares are more expensive relative to earnings than they were on the eve of the 1929 crash.
Three U.S. stock markets hit all-time highs within the past week, and the value of all global shares for the first time topped $100 trillion as investors bet on a post-pandemic return to normal in 2021. The stock price of rental marketplace Airbnb more than doubled Thursday, even as the Labor Department said nearly 1 million more Americans had applied for unemployment benefits, neatly capturing the tension between a bubbly stock market and grass-roots anguish.
“We’re in a euphoric, frothy kind of market,” said Liz Ann Sonders, chief investment strategist for Charles Schwab & Co. “Is there speculative fever? Absolutely.”
Yet the bull market may just be getting started. With the Federal Reserve planning to hold its benchmark lending rate near zero for at least three years, stocks are likely to remain attractive in comparison with bonds, according to investment strategists.
Soaring stocks would cheer millions of Americans. But rapid financial market gains amid a grinding labor market comeback could make it harder for President-elect Joe Biden to achieve his goal of building an economy that works “for all Americans.”
A rising market would mostly benefit the already affluent; only 14% of individuals in the bottom one-fifth of the income distribution own stocks, either directly or through retirement accounts, according to the Federal Reserve. An uninterrupted bull market also might erode support for government spending to help ailing businesses or the jobless, if some lawmakers interpret higher share prices as a sign of economic health.
“A huge amplifier of the inequality trifecta – of income, wealth and opportunity – the covid shock has pulled the Federal Reserve deeper into policies that are inadvertently worsening wealth disparities,” said Mohamed El-Erian, an economist and president of Queen’s College, Cambridge, in England.
As financially comfortable Americans grow richer, low-income service industry workers – disproportionately people of color – are likely to struggle to reclaim their jobs in hotels and restaurants. Such an uneven recovery threatens to exacerbate a rich-poor divide that Biden has vowed to narrow.
This summer, Biden called for legislation to add to the Fed’s existing twin mandate to provide full employment and stable prices a focus on mitigating “persistent racial gaps in jobs, wages, and wealth.” That proposal, at least at first, is likely to be eclipsed by what many economists say is an urgent need for Congress to approve more aid for small businesses, the unemployed, and state and local governments.
“Relying on easy monetary policy will increase inequality. What we really need is fiscal policy to upgrade our workforce, generate good (high wage, high hour) jobs,” economist Megan Greene, a senior fellow at Harvard University’s Kennedy School of Government said via email. “Central banks have fairly blunt tools, and monetary policy is a poor stand-in for these measures.”
The recent stock market gains also have raised alarms among global central banks and finance officials, who warn of risks to the financial system. From their March lows, the technology-rich Nasdaq index is up more than 80% and the Dow Jones industrial average has gained more than 60%, even as the recovery has sagged.
The stock market rally appears, for some, to be detached from economic reality.
The Bank of International Settlements, a global organization of central banks in Basel, Switzerland, said this month that “a certain amount of daylight” had opened up between companies’ high stock prices and their earnings prospects while the pandemic ravages major economies.
In November, the Fed said financial markets were vulnerable if the economic recovery or efforts to combat the coronavirus proved disappointing, echoing an earlier caution from the International Monetary Fund.
Only during a three-year period at the end of the 1990s technology bubble have stocks been pricier, based on the ratio of 10-year earnings to share prices. But with corporations and individuals sitting on enormous piles of cash, shares could be driven even higher.
Lofty stock values are defying significant health, economic and political risks. Nine months after the pandemic first disrupted American life, the United States is entering the most punishing phase of its encounter with the novel coronavirus.
“Probably for the next 60 to 90 days, we’re going to have more deaths per day than we had at 9/11 or we had at Pearl Harbor,” Robert Redfield, director of the Centers for Disease Control and Prevention, said Thursday during a Council on Foreign Relations event.
After this summer’s faster-than-expected economic rebound, the recovery in recent weeks has sputtered. November’s job growth was the weakest since spring, and lawmakers have not been able to agree on a new relief package.
The political climate is further complicated by the president’s attempt to overturn his loss in the Nov. 3 election and uncertainty over which party will control the Senate, a question that is to be settled in Georgia’s twin Jan. 5 runoffs.
Yet stock investors remain sanguine. One relative sentiment gauge maintained by the Chicago Board Options Exchange stands at its most bullish level in 23 years.
Over the past three months, more than one-third of the money that individual investors pumped into exchange traded funds went into stocks, making it the most popular single category, according to Arbor Data Science research.
Some individual stocks have done especially well. Shares of the electric-car maker Tesla have jumped more than 50% since the Nov. 17 announcement that it would join the S&P 500 this month. On Wednesday, shares of DoorDash, the meal delivery service, rose 86% in their first day of trading.
New investors have flocked to stock trading during the pandemic, at times overwhelming market infrastructure. Earlier in the week, two popular trading platforms – Interactive Brokers and Robinhood – suffered systems outages, leaving retail investors unable to access their accounts for hours.
On Wednesday, President Donald Trump tweeted an all-caps celebration of the markets’ performance: “STOCK MARKETS AT NEW ALL TIME HIGHS!!!”
Based on standard historical measures, stocks are not inexpensive.
As of Dec. 1, the S&P 500 index – a broad market gauge – was valued at levels it has reached during only three periods in 140 years, according to a measure developed by Robert Shiller, a Yale University economist, which compares stock prices to a 10-year earnings average.
This cyclically adjusted price-to-earnings ratio often reaches a peak before stocks plummet. But a high reading doesn’t signal an imminent price decline, only lower stock returns over the next 10 years.
The tool, which Shiller introduced in 1988, may be outdated. An improved version, which takes account of low interest rates, suggests that stocks remain a better bet than bonds.
“Stock-market valuations may not be as absurd as some people think,” Shiller wrote in a recent article for Project Syndicate, a nonprofit media organization.
The case for a continued stock surge rests on global central bank policies, which have flooded markets with $7.5 trillion to offset the pandemic’s negative effects. In the United States, the Fed acted quickly in March to reduce borrowing costs for corporations and governments by buying large amounts of securities. Financial conditions now are the easiest in at least 30 years, according to a Goldman Sachs index.
As of June 30, U.S. companies held more than $2.5 trillion in cash, up 35% from one year earlier, according to S&P Global Ratings. Some companies, including home builder Toll Brothers and retailer AutoZone, have said they plan to use some of their surplus cash to repurchase their own shares, which typically drives stock prices higher.
Likewise, individual investors have more than $4.3 trillion available in money market accounts, roughly $1 trillion more than they did last summer, according to the Investment Company Institute, an industry group.
“People are still sitting on cash, and global central banks are printing money,” said Michael Lewis, Barclays head of U.S. stock trading.
With interest rates low, alternatives to stocks are unappealing. Nearly $18 trillion in bonds are trading with negative yields – meaning investors who hold them to maturity will receive less money than they put in.
The last time stocks were this expensive, according to Shiller’s calculations, in the late 1990s, 10-year treasuries paid investors annual interest of around 5%. Today, those securities pay less than 1%, providing little competition for stocks.
“There’s no alternative,” said Meghan Shue, head of investment strategy for Wilmington Trust. “Investors are forced to go into stocks to get higher returns.”
High stock prices anticipate a strong recovery in 2021 as a coronavirus vaccine is widely distributed and workers and businesses gradually resume their pre-pandemic lives. Since profits typically rise faster than sales during recoveries, earnings for companies in the S&P 500 will rise 29% next year, Goldman said.
But to achieve that, they will first have to navigate what Biden has called “a very dark winter” of death and disease.
“It’s certainly a bit disconcerting,” Shue said. “But there may be a bit more to go.”
A sample of the Bt1,000 and Bt100 commemorative banknotes. 
Labour Minister Suchart Chomklin 
A tourist looks out at the Khanom-Sichon Sea in Nakhon Si Thammarat province on December 10. 
