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SET rises, but worries over political unrest, overbought stocks cast shadow (nationthailand.com)

SET rises, but worries over political unrest, overbought stocks cast shadow

EconNov 26. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index rose by 8.82 points, or 0.62 per cent, to 1,424.54 in the morning session on Thursday.

An analyst at Krungsri Securities expected the day’s index to fluctuate between 1,405 and 1,425 points amid forecasts of a smooth US presidential transition, progress on Covid-19 vaccines and the rising oil price.

“However, investors should beware of mass selloffs in shares due to uncertainty over Thailand’s political unrest and signs of overbought stocks,” he said.

He recommended investors buy:

> PTTEP, PTTGC, Top, IVL and SPRC, which benefit from the rising oil price.

> Mint, Centel and AOT, which benefit from the development of a Covid-19 vaccine.

> Amata, WHA, SAT and AH, which will benefit from the Asia-Pacific Regional Comprehensive Economic Partnership pact.

The SET Index closed at 1,415.72 on Wednesday, up 14.09 points, or 1.01 per cent. Total transactions amounted to Bt117 billion, with an index high of 1,428.36 points and a low of 1,392.42.

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Back-to-work rotation in stocks falters on data (nationthailand.com)

Back-to-work rotation in stocks falters on data

EconNov 26. 2020Pedestrians reflected in an electronic stock board outside a securities firm in Tokyo on Oct. 29, 2020. MUST CREDIT: Bloomberg photo by Kiyoshi Ota. 

By Syndication Washington Post, Bloomberg · Yakob Peterseil, Vildana Hajric · BUSINESS, US-GLOBAL-MARKETS

The rotation out of tech shares and into cyclicals, sparked by promising vaccine news, reversed Wednesday as investors cast a wary eye on a batch of data that suggest a possible slowdown in economic growth. Treasurys edged higher.

The S&P 500 Index retreated from an all-time high, while the Dow Jones industrial average fell back below 30,000. The tech-heavy Nasdaq indexes edged higher. Volume dwindled into the closing auction as traders headed out for the Thursday holiday that will keep markets closed. A deluge of data brought the first back-to-back rise in weekly U.S. jobless claims since July, an uptick in durable-goods orders and a widening trade deficit.

Minutes from the Federal Reserve’s latest meeting did little to alter views. The central bank discussed providing more guidance on its bond-buying strategy during the Nov. 4-5 policy meeting. Traders are also assessing the pandemic’s effect on the economy as cases continue to rise and more jurisdictions tighten restrictions.

“The market is caught between two powerful impulses — optimism for the post-pandemic world and fear because present reality is that the pandemic is exploding throughout the country,” said Jeff Klingelhofer, co-head of investments and portfolio manager at Thornburg Investment Management, which has $44 billion in total client assets. “Markets could be choppy, but downside is likely limited by the vaccine.”

Small caps slumped. The Russell 2000 is still up 20% in November, headed for the best month in its 41-year history. Gold was little changed, bitcoin pulled back from near a record and the 10-year Treasury yield fell. The dollar weakened.

The mediocre economic data dimmed positive vaccine news and the formal start of President-elect Joe Biden’s transition to power — including the selection of Janet Yellen as treasury secretary — that had fueled optimism about the outlook for risk assets. At the same time, restrictions to curb surging coronavirus cases threaten to slow the world’s economic recovery. An MSCI gauge of global shares stalled on Wednesday after gaining 13% in November, still set for the best month since 1988.

“We remain on fragile footing heading into the winter as cases continue to climb globally,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “And since the markets are forward looking, this data will likely be taken in stride. The markets tend to cheer on certainty so the presidential transition and vaccine developments are two factors it’s latched onto lately.”

In Europe, the Stoxx Europe 600 Index edged lower, as cyclicals such as mining and energy firms fell, offsetting advances in defensives including utility shares. ABN Amro Bank NV and Commerzbank AG dropped more than 3% and led euro-area lenders lower after the European Central Bank said the industry will probably have to set aside more money to soak up losses when government pandemic support ends.

Here are the main moves in markets:

Stocks

– The S&P 500 Index slid 0.2% as of 4 p.m. EST.

– The Nasdaq 100 rose 0.6%.

– The Dow average lost 0.6%

– The Stoxx Europe 600 Index declined 0.1%.

– The MSCI Asia Pacific Index was little changed.

– The MSCI Emerging Market Index fell 0.4%.

Currencies

– The Bloomberg Dollar Spot Index fell 0.1%.

– The euro gained 0.2% to $1.1914.

– The British pound rose 0.1% to $1.3378.

– The onshore yuan strengthened 0.3% to 6.574 per dollar.

– The Japanese yen was little changed at 104.4 per dollar.

Bonds

– The yield on 10-year Treasurys declined one basis point to 0.87%.

– The yield on two-year Treasurys was little changed at 0.16%.

– Germany’s 10-year yield fell one basis point to -0.58%.

– Britain’s 10-year yield declined to 0.318%.

– Japan’s 10-year yield dipped less than one basis point to 0.021%.

Commodities

– West Texas Intermediate crude gained 3.6% to $45.62 a barrel.

– Brent crude gained 1.5% to $48.59 a barrel.

– Gold futures were flat at $1,810.70 an ounce.

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U.S. jobless claims post first back-to-back increase since July (nationthailand.com)

U.S. jobless claims post first back-to-back increase since July

EconNov 25. 2020A restaurant in the Old Town neighborhood of San Diego on Nov. 19, 2020. MUST CREDIT: Bloomberg photo by Bing Guan. 

By Syndication Washington Post, Bloomberg · Henry Ren · BUSINESS, US-GLOBAL-MARKETS

Applications for U.S. state unemployment benefits unexpectedly rose for a second straight week in the first back-to-back increase since July.

The data indicate that soaring coronavirus cases and fresh lockdowns are spurring a new wave of layoffs.

Initial jobless claims in regular state programs increased by 30,000 to 778,000 in the week ended Nov. 21, according to Labor Department data Wednesday. Without adjustments for seasonal fluctuations, the figure rose by about 78,000 during the week.

Follow reaction in real time here on Bloomberg’s TOPLive blog

Continuing claims — the total pool of Americans on ongoing state unemployment benefits — fell by 299,000 to 6.07 million in the week ended Nov. 14. But the number of Americans on an extended assistance program continued to increase, a sign that more people have exhausted regular state benefits.

The main figures compared with economists’ projections for 730,000 initial claims and 6 million continuing claims, based on the median estimates in Bloomberg surveys.

The consecutive increase in claims offer evidence that the coronavirus threatens to stall an economic rebound that was already moderating from a breakneck pace in the third quarter, with some economists predicting a contraction for the first quarter.

The job market faces additional hurdles as states and cities restrict business activity and hospitalizations spike.

“The continued weakness of the labor market is something that is going to drive the whole economy down,” Catherine Mann, global chief economist at Citigroup, said on Bloomberg Television. At the same time, solid sectors like manufacturing are “going to keep us from being in official recession, but it’s going to be very grim,” she said.

Several states recorded significant increases in initial claims, led by Illinois, where Chicago issued a stay-at-home advisory starting last week. Michigan, Washington, New Mexico, California and Minnesota also reported higher filings.

U.S. stocks edged lower at the open with 10-year Treasury yields, while the dollar fluctuated.

Continuing claims for Pandemic Unemployment Assistance, which provides benefits to self-employed and gig workers, increased by about 466,000 to 9.15 million. The Pandemic Emergency Unemployment Compensation, which provides payments to the long-term unemployed, was used by 4.51 million Americans. Those two programs will expire at year-end, leaving many without government aid.

In other economic data released Wednesday:

– U.S. durable goods orders increased at a faster-than-expected clip in October, supported by demand for computers and metals, underscoring a manufacturing sector that continues to support the economy.

– The economy expanded at a record 33.1% annualized pace in the third quarter, unrevised from the initial reading.

– The U.S. merchandise-trade deficit widened in October as imports reached the highest in more than a year, outpacing a gain in the value of exports.

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Prayut urges US businesses to boost EEC investment (nationthailand.com)

Prayut urges US businesses to boost EEC investment

EconNov 25. 2020(Photo credit: Government House) 

By The Nation

Prime Minister Prayut Chan-o-cha on Wednesday invited the US private sector to invest more in Thailand’s Eastern Economic Corridor (EEC).

The premier met with representatives of 28 companies under the US-Asean Business Council (USABC) at the Foreign Affairs Ministry. He also also spoke to another 11 USABC members via video, said government spokesman Anucha Burapachaisri.

Prayut hailed the EEC as a key engine driving the Thai economy.

He also told US company representatives that the government was focusing on boosting public health security and economic recovery from the impact of Covid-19.

The council’s president, Alexander C Feldman, praised the government for its effective control of the outbreak, which he said was helping to support a favourable investment climate.

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SET rallies on news of vaccine, US transition (nationthailand.com)

SET rallies on news of vaccine, US transition

EconNov 25. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index closed at 1,415.72 on Wednesday, up 14.09 points or 1.01 per cent. Total transactions amounted to Bt117 billion with an index high of 1,428.36 and a low of 1,392.42.

In the morning session, an analyst at Krungsri Securities expected the day’s index to fluctuate between 1,390 and 1,415 points amid forecasts of a smooth US presidential transition, progress on Covid-19 vaccines and the rising oil price.

“However, mass selloffs to reduce risk caused by pro-democracy protesters’ anti-government rally [today] will pressure the index,” he said.

The 10 stocks with the highest trade value today were PTT, KBANK, PTTEP, AOT, SAWAD, ADVANC, MINT, CPALL, PTTGC and CPF.

As of 4.30pm, the price of oil rose by US$0.35 or 0.78 per cent to $45.26 per barrel, while gold rose by $4.60 or 0.25 per cent, to $1,809.20 per ounce.

Other Asian indices were mixed:

Japan’s Nikkei Index closed at 26,296.86, up 131.27 points or 0.50 per cent.

China’s Shang Hai SE Composite Index closed at 3,362.33, down 40.50 points or 1.19 per cent, while the Shenzhen SE Component Index closed at 13,656.10, down 246.44 points or 1.77 per cent.

Hong Kong’s Hang Seng Index closed at 26,669.75, up 81.55 points or 0.31 per cent.

South Korea’s KOSPI Index closed at 2,601.54, down 16.22 points or 0.62 per cent.

Taiwan’s TAIEX Index closed at 13,738.83, down 68.30 points or 0.49 per cent.

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Finance minister orders shake up in Customs Dept after receiving complaints (nationthailand.com)

Finance minister orders shake up in Customs Dept after receiving complaints

EconNov 25. 2020Finance Minister Arkhom Termpittayapaisith 

By The Nation

After visiting the Customs Department on Wednesday, Finance Minister Arkhom Termpittayapaisith said he has instructed officials to use technology to reduce the time spent on inspection so goods can be released quickly as well as to ensure transparency.

“The department’s job has shifted from collecting revenue to making import-export easier for business operators. Recently there have been many complaints about the department taking too long to release cargo. Hence, my policy is to introduce technology, so the process can become faster and more transparent,” Arkhom said.

He also followed up on the National Single Window system, which is meant to connect Thailand with Asean countries but is not working effectively. Arkhom said the licensing system and database should be completed by 2021, so demands from local and foreign businesses can be met.

He has also ordered stricter controls on illegal imports and has instructed officials to ensure cargo is sanitised before release to prevent the spread of Covid-19.

The minister went on to say that in a bid to make Thailand a hub for international shipping, the Map Ta Phut checkpoint in the Eastern Economic Corridor will be used as another shipping centre.

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Krungsri Research raises 2020 growth forecast by almost 4 percentage points (nationthailand.com)

Krungsri Research raises 2020 growth forecast by almost 4 percentage points

EconNov 25. 2020Krungsri Research’s chief economist Somprawin Manprasert 

By The Nation

Exports are driving the gradual recovery of Thailand’s economy, says Krungsri Research, but it warns that foreign tourists will not return in the large numbers of previous years.

The research house has raised its 2020 GDP forecast to contraction of 6.4 per cent from 10.3 per cent. 

It projects 2021 growth at 3.3 per cent, citing both challenges and opportunities ahead.

The upward revision for 2020 reflects better-than-expected third quarter GDP data, accelerating public spending, and stronger merchandise exports, Krungsri Research’s chief economist Somprawin Manprasert said on Wednesday.

Thailand’s economic growth is expected to turn positive from the second quarter of 2021, supported by the low-base effect, government spending and a cyclical rebound of external demand.

“We see challenges ahead with domestic headwinds. Tourism recovery is lagging behind other economic growth drivers, leaving large excess capacity in several services sectors. Job losses will continue to weigh on income and consumer spending,” Somprawin said.

Domestic political unrest could undermine economic growth and trigger concern over continuity of policy. Historically, political disruption reduces growth by 0.6 to 1 percentage point, he said.

However, exports will become an engine of growth, with private investment in export-related sectors expected to improve moderately. Economic opportunities will also arise from growing regionalisation, which could support Thai exports and domestic production in the medium term, he said.

Meanwhile new US policy under Joe Biden’s administration would only slightly benefit Thailand, as the US would maintain trade protectionism, according to Krungsri Research.

Krungsri Research’s key revisions:

• Foreign tourist arrivals to decline to 4 million in 2021 from 6.7 million in 2020.

• 2020 private consumption forecast raised from -4.2 per cent to -1.1 per cent. Growth of 2.5 per cent expected in 2021. 

• 2020 exports forecast raised from -12.5 per cent to -7.5 per cent, and 2021 exports forecast to expand 4.5 per cent..

• 2020 private investment forecast raised to -11 per cent. Forecast of 3.2 per cent growth in 2021. 

• 2020 public investment forecast growth of 12.5 per cent, followed by 10.5 per cent in 2021.