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SET will recover to pre-Covid level next year: Federation of Thai Capital Market Organisations (nationthailand.com)

SET will recover to pre-Covid level next year: Federation of Thai Capital Market Organisations

EconDec 04. 2020Paiboon Narintarangkul, chairman of FETCO/ file photo 

By The Nation

Thai stocks will recover to pre-Covid level next year thanks to capital inflows and economic recovery, the chairman of the Federation of Thai Capital Market

Organisations (FETCO), predicted on Thursday. 

Paiboon Narintarangkul forecast the Thai stock market would rise further next year due to Thailand’s strong economic fundamentals and success in containing coronavirus.

Earnings per share next year are expected to grow at 40 per cent, largely due to the low base this year, he said.

Foreign investors are showing growing interest in Thai stocks as they look for upside opportunities, he added.

Capital inflows will continue from the first quarter next year, he said.

Paiboon was speaking after the Stock Exchange of Thailand (SET) Index jumped 17.9 per cent in November, the highest gain among Asian markets and among the highest in the world. Much of that rise was driven by overseas inflows.

Investors are betting, among other things, on the recovery of Thai tourism once Covid-19 vaccines are rolled out next year.

Paiboon said the impact of current political protests may be short term if there is no major change that leads to a general election.

“Investors are paying more attention to capital inflows and signs of economic recovery,” he explained.

Investor confidence in November surged 161 per cent to 161.41 from the previous month, according to the investment sentiment index. 

“Investors are very bullish for the first time in the past two years,” Paiboon commented.

They are betting on large capital inflows, economic recovery, US Federal Reserve’s accommodative policy and the availability of Covid-19 vaccine, he said.

However, political uncertainty remains a concern.

Economic sectors standing to benefit from the recovery include consumer goods, retail and banking. Forecast to recover more slowly are tourism-related businesses such as hotels and airports.

The energy sector is the most attractive to investors, while there is little interest in insurance and life assurance, according to Paiboon.

“The SET index next year is expected to recover to pre-Covid-19 levels of 1,580 and could rise higher to match markets which have already risen above their pre-pandemic level,” he predicted.

The SET index closed at 1,438.32 on Thursday, up 1.44 per cent and with a large trade volume of Bt82.6 billion.

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Trump keeps hammering China just weeks before Biden takes over (nationthailand.com)

Trump keeps hammering China just weeks before Biden takes over

EconDec 03. 2020President Trump 

By Syndication Washington Post, Bloomberg · Bloomberg News · WORLD, ASIA-PACIFIC 

President Donald Trump isn’t letting his election loss stop him from beating up on China.

On Wednesday alone, his administration restricted travel visas for members of the Chinese Communist Party and banned cotton imports from a military-linked firm it accused of “slave labor.” He’s also expected to soon sign a bill passed by the U.S. House of Representatives that could ultimately lead to Chinese companies getting kicked off American exchanges.

The question now is just how bad things could get in the next seven weeks before President-elect Joe Biden takes over. Trump’s administration faces a mid-December deadline to name banks who do business with officials accused of undermining Hong Kong’s autonomy, and could sanction others — including possibly more senior party members.

“Trump’s measures will box Biden in,” said Shi Yinhong, director of the Center on American Studies at Renmin University of China and an adviser to the Chinese government. “It’s a constant escalation. The starting point for negotiations keeps rising. It’s unlikely for the U.S. side to return to a time before decoupling.”

For Biden, the moves could either be seen as adding leverage against the Chinese or potentially tying his hands. The long-time senator and former vice president told the New York Times this week he would conduct a full review in consultation with U.S. allies before making big moves on China, including whether to rework the “phase-one” trade deal reached between the world’s biggest economies in January.

Trump’s moves this week are likely to further strain a relationship already roiled by a trade war, intensified geopolitical competition, and mutual recriminations about the origins of the covid-19 pandemic. Secretary of State Mike Pompeo said in November that the U.S. was “not finished yet” when it came to getting tough on China, describing the Communist Party as a “Marxist-Leninist monster” whose rule is “authoritarian, brutish and antithetical to human freedom.”

On Wednesday, the House approved legislation with bipartisan support that would allow U.S. inspectors to review the financial audits of Chinese companies and require them to disclose whether they were under government control. The U.S. Department of Homeland Security also said that customs officers would impound “shipments containing cotton and cotton products originating from” the Xinjiang Production and Construction Corps, a military-affiliated entity that’s one of China’s largest producers.

Under the new visa rules, Communist Party members and their immediate families would be restricted to single-entry visas, which will be limited to one month. Previously, party members could obtain multiple-entry visitor visas as long as 10 years in duration.

“The CCP and its members actively work in the U.S. to influence Americans through propaganda, economic coercion, and other nefarious activities,” a U.S. Embassy spokesperson said in an emailed statement. “For decades we allowed the CCP free and unfettered access to U.S. institutions and businesses while these same privileges were never extended freely to U.S. citizens in China.”

While Foreign Ministry spokeswoman Hua Chunying said she wasn’t aware of the visa actions, she urged the U.S. to reverse course. “China lodges representations with the U.S. side and we hope people in the U.S. will adopt a common rational view toward China and give up their hatred and abnormal mindset toward the CCP,” Hua told a regular news briefing Thursday in Beijing.

The new visa rules fit with the Trump administration’s efforts to create tension between the ruling party and the broader Chinese population. Chinese President Xi Jinping has sought to make the party more central in every day life, echoing Mao Zedong’s edict that the party leads everything — “east, west, south, north and center.” In September, Xi vowed to “never allow any individual or any force to separate the CCP and Chinese people, and to pitch them against each other.”

The Communist Party has around 92 million members, including national and local government leaders. Its ranks also include millions of business people, such as China’s third-richest man, Jack Ma, co-founder of Alibaba Group Holding, and members of the media and academia. It could also impact the children of party members, many of whom study in the U.S.

“We don’t know if Biden would agree with these moves,” said Shi, the adviser to China’s government. “Even if he doesn’t, he is more limited in what he can do after the policies are in place.”

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SET soars up almost 1.5% on hopes of US stimulus, vaccine, rising oil (nationthailand.com)

SET soars up almost 1.5% on hopes of US stimulus, vaccine, rising oil

EconDec 03. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index closed at 1,438.32 on Thursday, up 20.37 points or 1.44 per cent. Total transactions amounted to Bt82 billion with an index high of 1,439.22 and a low of 1,420.69.

In the morning session, an analyst at Krungsri Securities expected the day’s index to fluctuate between 1,410 and 1,430 points amid hope of a US economic stimulus package, the UK’s approval of Pfizer’s Covid-19 vaccine and the rising oil price.

“However, the SET will face volatility due to a tight valuation as the index’s price-to-earnings ratio [P/E] is 28 times,” said the analyst.

He advised investors to follow the Opec+ meeting, which he predicts will extend the cap on oil production of 7.7 million barrels per day by three to six months.

“The extension will help tackle market oversupply and benefit oil prices and shares related to the oil business,” he added.

The 10 stocks with the highest trade value today were PTT, KBANK, IVL, BAM, PTTEP, CPALL, IRPC, ADVANC, SCC and AOT.

As of 4.30pm, the price of oil rose by US$0.12 or 0.27 per cent to $45.40 per barrel, while gold rose by $12.70 or 0.69 per cent, to $1,842.90 per ounce.

Other Asian indices were mixed:

Japan’s Nikkei Index closed at 26,809.37, up 8.39 points or 0.031 per cent.

China’s Shang Hai SE Composite Index closed at 3,442.14, down 7.24 points or 0.21 per cent, while Shenzhen SE Component Index closed at 13,970.68, up 9.11 points or 0.065 per cent.

Hong Kong’s Hang Seng Index closed at 26,728.50, up 195.92 points or 0.74 per cent.

South Korea’s KOSPI Index closed at 2,696.22, up 20.32 points or 0.76 per cent.

Taiwan’s TAIEX Index closed at 13,977.09, down 12.05 points or 0.086 per cent.

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Central bank revises rules to meet international standards, aiming to strengthen bank capital and brace for uncertain future (nationthailand.com)

Central bank revises rules to meet international standards, aiming to strengthen bank capital and brace for uncertain future

EconDec 03. 2020Nawaron Dejsuvan, assistant governor for BOT’s Financial Institutions Policy Group 

By The Nation

The Bank of Thailand (BOT) has amended regulations on eligibility criteria for regulatory capital, so it is in line with international standards.

Nawaron Dejsuvan, assistant governor for BOT’s Financial Institutions Policy Group, said that the central bank has amended regulations on eligibility criteria for financial instruments qualified as banking capital. Though the capital level of the domestic banking system is high, with a BIS Ratio in September standing at 19.43 per cent, commercial banks will need to build up their capital cushion to withstand unanticipated events in the future. 

The eligibility criteria of financial instruments are revised in line with international standard as follows:

•    Additional Tier1 (AT1) capital instrument is a financial instrument with no maturity date. Issuing banks are allowed to pay interest or other returns to holders without prior approval from the BOT, provided the banks’ BIS Ratio is higher than the ratio prescribed by the BOT.

•    Tier 2 capital instrument is subordinated debt that can be redeemed after a minimum of five years from the date of issuance. The BOT has revoked the clause giving banks the right to postpone the schedule for the payment of interest. 

The purpose of the amendments is to assuage investors’ concerns regarding the payment of interest. As a result, banks can raise capital more easily which in turn will boost their capital levels and liquidity. Banks should, therefore, be able to provide additional loans to businesses and households to support economic recovery. 

Call the Regulatory Policy Department at (02) 283 5874, (02) 283 5878 or (02) 283 5312 for more information. 

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SET extends gains after falling at previous close (nationthailand.com)

SET extends gains after falling at previous close

EconDec 03. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index rose by 6.29 points, or 0.44 per cent, to 1,424.24 in the morning session on Thursday.

An analyst at Krungsri Securities expected the day’s index to fluctuate between 1,410 and 1,430 points amid hopes for a US economic stimulus package, UK approval of Pfizer’s Covid-19 vaccine and a rising oil price.

“However, the SET would face volatility due to tight valuation as the index’s price-to-earnings ratio [P/E] was 28 times,” he predicted.

He advised investors to follow the Opec+ meeting as he expected the organisation to extend by three to six months the period of capping oil production at 7.7 million barrels.

“The extension will help tackle market oversupply and benefit oil prices and shares related to the oil business,” he added.

He recommended investors buy:

> PTTEP, PTTGC, TOP, IVL and SPRC that benefit from a rising oil price.

> Ichi, TKN, CBG and TNP that benefit from the “Khon La Khrueng” (Let’s Go Halves) scheme.

> MINT, CENTEL and AOT that benefit from positive news of a Covid-19 vaccine.

The SET Index closed at 1,417.95 on Wednesday, down 2.92 points, or 0.21 per cent. Total transactions amounted to Bt78 billion, with an index high of 1,430.49 points and a low of 1,415.10.

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Gold price flat amid weakening dollar, hopes of US economic stimulus package (nationthailand.com)

Gold price flat amid weakening dollar, hopes of US economic stimulus package

EconDec 03. 2020

By The Nation

The price of gold was unchanged in morning trade on Thursday after rising by Bt450 per baht weight at close on Wednesday, the Gold Traders Association reported.

As of 9.25am, the buying price of a gold bar was Bt26,050 per baht weight and selling price Bt26,150, while gold ornaments cost Bt25,574.92 and Bt26,650, respectively.

The spot gold price moved to US$1,828 (Bt55,213) per ounce in the morning, while the Comex (Commodity Exchange) gold price to be delivered in February rose by $11.30 to $1,830.20 per ounce on Wednesday on hopes of an upcoming US economic stimulus package and the weakening dollar.

The Hong Kong gold price meanwhile rose by HK$50 to $16,910 (Bt65,885) per tael, the Chinese Gold and Silver Exchange Society reported.

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Stocks post another record high; oil halts slide (nationthailand.com)

Stocks post another record high; oil halts slide

EconDec 03. 2020A sign for Wall Street in New York, MUST CREDIT: Bloomberg photo by Michael Nagle. 

By Syndication Washington Post, Bloomberg · Vildana Hajric, Claire Ballentine

U.S. stocks registered a record high for a second consecutive day amid renewed optimism over U.S. stimulus talks and a rebound in crude oil. Treasury yields rose, while the dollar touched a more than two-year low.

The S&P 500 edged up 0.2%, closing at an all-time high, led by gains in energy companies including Exxon Mobil Corp. and Chevron Corp. Salesforce.com Inc. weighted on tech-heavy Nasdaq indexes with analysts calling its purchase of Slack Technologies Inc. expensive. House Speaker Nancy Pelosi and Senate Democratic leader Charles Schumer called for immediate talks and said a bipartisan $908 billion aid proposal should be the foundation for negotiations.

“It’s a push-and-pull of market positioning,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management’s Ascent Private Wealth Group. “It’s just this two step forward, one step back that we’ve watched in the stock market for a number of months now.”

Oil snapped a three-day slide after a surprise decline in U.S. crude inventories and signals that OPEC+ made progress toward a widely anticipated deal on output curbs. Earlier, Pfizer Inc. climbed after its shot was cleared for deployment in the U.K. as soon as next week.

Britain’s pound slumped after the European Union’s chief Brexit negotiator Michel Barnier reportedly told envoys the outcome of any deal is still too close to call.

After vaccine breakthroughs fueled record monthly gains for global stocks, markets appear to have priced in an improved health outlook, and investors are turning some of their attention to bonds. One of the year’s biggest spikes in Treasury yields on Tuesday has spurred speculation about the potential impact of rising rates on stocks and corporate debt.

Federal Reserve Chair Jerome Powell indicated Wednesday that there was no rift between the central bank and Treasury Secretary Steven Mnuchin over the ending of emergency lending programs. Powell emphasized the need for more stimulus before a Congressional committee.

“We’re watching the size of the fiscal stimulus package and the timing of it, which is really important,” said Michael Greenly, a senior portfolio manager at UBS Private Wealth Management. “We’re also watching if there’s going to be longer restrictive social distancing policies, which could affect the economy on some levels. But even with that, the recent data’s suggested that the economic recovery is continuing.”

Elsewhere, the offshore yuan erased gains after President-elect Joe Biden told the New York Times he won’t soon remove tariffs on Chinese goods. Gold rose for a second day.

Bitcoin hovered around $19,000 after nearly reaching $20,000 on Tuesday.

Here are some of the main moves in markets:

Stocks

The S&P 500 Index rose 0.2% to 3,668.99 as of 4:01 p.m. EST, the highest on record.

The Dow Jones industrial average climbed 0.2% to 29,884.78.

The Nasdaq Composite Index was little changed at 12,349.37.

The Stoxx Europe 600 Index declined 0.1% to 391.69.

The MSCI All-Country World Index jumped 0.3% to 626.59, the highest on record.

Currencies

The Bloomberg Dollar Spot Index dipped 0.1% to 1,135.62, the lowest in more than two years.

The euro rose 0.3% to $1.2102, the strongest in more than two years.

The Japanese yen depreciated 0.2% to 104.51 per dollar, the weakest in more than a week.

The British pound fell 0.4% to $1.3366, the largest drop in almost three weeks.

Bonds

The yield on 10-year Treasuries rose two basis points to 0.94%, the highest in three weeks.

Germany’s 10-year yield gained one basis point to -0.52%, the highest in three weeks.

Britain’s 10-year yield increased one basis point to 0.354%, the highest in three weeks.

Commodities

West Texas Intermediate crude gained 1.3% to $45.13 a barrel, the first advance in a week.

Gold strengthened 0.7% to $1,828.75 an ounce, the highest in more than a week.