The Stock Exchange of Thailand (SET) Index rose by 8.15 points, or 0.61 per cent, to 1,349.07 in the morning session today (July 29).
A stock analyst at Krungsri Securities expected the index to fall to between 1,325 and 1,330 points before rebounding due to the conflict between US Republicans and Democrats over $1-trillion (Bt31.45 trillion) in economic stimulus measures.
“Also, uncertainty following the number of new Covid-19 cases in the US, with an increase of 60,000 in just one day, would pressure investment,” he said.
“However, the index will rebound from mass purchases in stocks whose second-quarter performance is expected to improve.”
The analyst advised investors to follow the US Federal Open market Committee meeting today and tomorrow, adding that the committee would maintain the interest rate at 0-0.25 per cent.
He recommended investors buy:
> Food and Electronic stocks that benefit from the weakening baht, such as CPF, GFPT, TU, TFG, Asian, KCE, Delta, Hana and SVI.
> Stocks whose second-quarter performance will improve, such as Top, PTTGC, SPRC, SCC, BGrim, CKP, CPF, TU, Tasco, STA, STGT, SPALI, AP, PRM, PTL, AJ, STark, CBG and TQM.
The SET Index closed at 1,340.92 on Friday, down 18.73 points, or 1.38 per cent. Total transactions amounted to Bt46.529 billion, with an index high of 1,350.93 and a low of 1,337.21.
The price of gold rose by Bt250 per baht weight in morning trade today (July 29), the Gold Traders Association reported.
As of 9.26am, the buying price of a gold bar was Bt28,950 per baht weight and selling price Bt29,050, while gold ornaments cost Bt28,425 and Bt29,550, respectively.
At close yesterday, the buying price of a gold bar was Bt28,700 per baht weight and selling price Bt28,800, while gold ornaments cost Bt28,182.44 and Bt29,300, respectively.
The Comex (commodity exchange) gold price to be delivered in August rose by US$13.6, or 0.7 per cent, to $1,944 (Bt60,004) per ounce at yesterday’s close.
Investors are still purchasing gold as a safe-haven asset amid uncertainty in this Covid-19 crisis and the conflict between US political parties over economic stimulus measures.
By Syndication Washington Post, Bloomberg · Rita Nazareth, Claire Ballentine, Sarah Ponczek · BUSINESS
U.S. stocks fell as traders assessed corporate earnings amid a resurgence in global coronavirus cases. Bonds rose.
The S&P 500 trimmed its monthly gain as worse-than-estimated results from McDonald’s Corp., 3M Co. and Harley-Davidson Inc. sent their shares slumping. Pfizer Inc. climbed after the drugmaker raised its earnings forecast and began a later-stage trial for a coronavirus vaccine with its German partner. Eastman Kodak Co. soared on news that it received a U.S. government loan.
Some of the largest companies report earnings this week, and investors will look for clues on whether a resurgence of covid-19 around the world will derail a recovery of corporate profits and the economy. The Federal Reserve extended most of its emergency lending programs by three months, through the remainder of 2020. A drop in consumer confidence added to evidence that the pace of the rebound is cooling as the virus interrupts reopenings in several states.
“We’ve seen a number of beneficiaries of the lockdowns and a lot of companies really hurt by the lockdowns,” said Bill McMahon, chief investment officer of active strategies for Charles Schwab Investment Management. “There is still a lot of uncertainty about the rest of the year in how they guide.”
The pandemic continues to rage in parts of the U.S., hot spots in Europe and across big emerging economies including India and Brazil. Governments are having to double down on the $11 trillion dollars worth of stimulus and unprecedented central bank support unleashed since the crisis began. The Fed is set to announce its rate decision Wednesday, and the market anticipates a dovish statement.
“There’s enough stimulus and support in the market from a monetary policy perspective, but also from fiscal, and that keeps a nice floor under the market,” said Amanda Agati, chief investment strategist for PNC Financial Services Group. “But we also think it’s going to be very difficult to make a lot of forward progress in this environment.”
Nasdaq’s biggest companies may struggle to surpass a performance milestone from the height of the 1990s dot-com era, according to Julian Emanuel, head of equity and derivatives strategy at BTIG LLC.
The Nasdaq-100 was leading the S&P 500 for a 10th straight month as of Monday, according to data compiled by Bloomberg. If the tech-heavy gauge hangs onto the lead through Friday, it will match a record streak between May 1999 and February 2000 — the final months before both indexes peaked. The latest run is at risk because of “poor share-price reactions to otherwise solid earnings reports” and other issues, he wrote.
These are some of the main moves in markets:
Stocks
– The S&P 500 decreased 0.6% as of 4 p.m. EDT.
– The Stoxx Europe 600 Index added 0.4%.
– The MSCI Asia Pacific Index advanced 0.4%.
Currencies
– The U.S. Dollar Index rose 0.1%.
– The euro declined 0.3% to $1.1716.
– The Japanese yen appreciated 0.3% to 105.08 per dollar.
Bonds
– The yield on 10-year Treasurys declined four basis points to 0.58%.
– Germany’s 10-year yield fell two basis points to -0.51%.
– Britain’s 10-year yield was unchanged at 0.109%.
Commodities
– The Bloomberg Commodity Index was little changed.
– West Texas Intermediate crude decreased 1.6% to $40.92 a barrel.
In a recent discussion, the Department of Industrial Promotion (DIP) and the Organisation for Small and Medium Enterprises and Regional Innovation, Japan (SME Support Japan) decided to match Thai and Japanese businesses to create an industrial bubble.
Nattapon Rangsitpon, DIP director general, said the industrial bubble will be operated through the T-GoodTech trading platform, which will link up with the J-Goodtech SME platform to match 4,000 Thai businesses with a Japanese business database of 20,000 members.
This system will also help publicise different businesses so they can be matched with different target markets.
DIP has recently been able to link up more than 70 businesses, accounting for up to Bt400 million in revenue from exports.
Thailand’s online trading system is expected to grow by more than 35 per cent this year, and should help strengthen the country’s industrial sector so it can advance in line with the global value chain.
More information is available via the Digital Industry Division at (02) 202 4562 or DIP’s Public Relations Department Office at (02) 202 4414-18 or by visiting https://www.dip.go.th/
The price of gold rose by Bt450 per baht weight in the morning trade on Tuesday (July 28), the Gold Traders Association reported.
As of 9.31am, the buying price of gold bars was Bt29,200 per baht weight and selling price Bt29,300, while gold ornaments cost Bt28,667.56 and Bt29,800, respectively.
At close on Monday, the buying price of gold bars was Bt28,750 per baht weight and selling price Bt28,850, while gold ornaments cost Bt28,227.92 and Bt29,350, respectively.
The COMEX (Commodity Exchange) gold price to be delivered in August rose by US$33.5 or 1.77 per cent to $1,931 (Bt60,973) per ounce at Monday’s close.
Gold closed at the highest as investors are still purchasing hold as a safe-haven asset amid uncertainty over US-China tensions, the Covid-19 pandemic and a weakening dollar.
By Syndication Washington Post, Bloomberg · Cristin Flanagan · BUSINESS
Moderna Inc. climbed as much as 11% Monday after getting a second round of U.S. funding for an experimental vaccine for covid-19 and kicking off its late-stage trial.
With an additional $472 million award from the Biomedical Advanced Research and Development Authority (BARDA) announced on Sunday, Moderna’s shot is now backed by $955 million of funds from the U.S.
The first participants in the 30,000 person study have been dosed, the Cambridge, Mass.-based biotech company said on Monday. Earlier, it said that the new award closed a funding gap in the larger-than-anticipated trial.
Moderna’s vaccine, co-developed with the National Institutes of Health, is one of more than 160 in development to prevent the spread of the disease, and the World Health Organization estimates about 25 different inoculations are currently in human trials. Moderna, alongside AstraZeneca Plc and Pfizer Inc., in partnership with BioNTech SE, have been among the first to show favorable immune responses to their vaccines.
Larger trials are needed to establish vaccines’ efficacy. “Results from early-stage clinical testing indicate the investigational mRNA-1273 vaccine is safe and immunogenic, supporting the initiation of a Phase 3 clinical trial,” Anthony Fauci said in an NIH statement about Moderna’s shot.
Government support for the vaccine “increases our confidence in its success,” BMO analyst George Farmer wrote in a note to clients. Goldman analysts led by Salveen Richter called Moderna “a leading contender” to bring a vaccine to the market, potentially before the end of the year.
“Having a safe and effective vaccine distributed by the end of 2020 is a stretch goal, but it’s the right goal for the American people,” said Francis Collins, director of the health agency. Interim looks at the larger study may lead regulators to give Moderna’s shot an early approval, according to Goldman.
Investors will also want to know how Moderna’s shot looks in seniors. Some early-stage results in older people are expected in August, while Phase 2 data is expected sometime between next month and September.
China could become Thailand’s main competitor for rice export in the future, according to the Thai Rice Exporters Association.
The association’s honorary president, Chookiat Ophaswongse, said that the association was closely watching China’s rice exports, which had expanded in terms of volume over the past few years.
Last year China exported 2.7 million tonnes of rice, which is expected to reach 3.2 million tonnes this year.
He added that China’s export is expected to expand to between 5 million tonnes to 6 million tonnes in the next few years, thanks to its rice varieties and high yield.
He said that besides China, Myanmar is also rising fast as a major rice exporter. Myanmar has already exported 2 million tonnes this year and is expected to increase to 3 million tonnes next year.
He added that Thailand’s competitors have spent far higher than Thailand on rice research and development to improve quality and strains to make their rice fit well with market demand.
The association recently revised down its forecast for Thai rice exports this year from 7.5 million tonnes to 6.5 million tonnes.
Thailand’s rice exports in the first half of this year dropped 32 per cent year on year to 3.14 million tonnes, worth US$2.2 billion, according to the association.
The Transport Ministry has asked Airports of Thailand (AOT) to deliver feasibility studies on second airports to serve Phuket and Chiang Mai by next year. The AOT is ready to invest more than Bt120 billion in the airports, confident construction will be warranted by growing travel demand.
Chaiwat Thongkamkoon, Transport Ministry Permanent Secretary, said the ministry in June instructed the AOT to hire consultants for the feasibility studies.
Chula Sukmanop, director of the Civil Aviation Authority of Thailand (CAAT), said its study of Thailand’s airport master plan found that new airports should be developed in Phang Nga province to support Phuket and in Lamphun province to support Chiang Mai.
The AOT expects construction costs for both airports will be around Bt120 billion – Bt70 billion for the second Phuket airport and Bt54 billion-Bt60 billion for the second Chiang Mai airport.
The area earmarked for Phuket Airport 2 is located in Khok Kloi subdistrict, Takua Thung district, Phang Nga province. An area of 7,000 rai will be requisitioned from its 10 major landowners who must be compensated for 200-300 land title deeds.
Chiang Mai Airport 2 will be located in Huai Yab subdistrict, Ban Thi district, Lamphun province where the terminal and runway will be built on 5,000 land plots.
Several securities companies have cut listed companies’ earnings per share (EPS) and second-quarter profit forecasts this year due to the Covid-19 impact on the economy.
Tisco Securities’ senior strategist Apichat Poobunjirdkul said the company has cut listed companies’ EPS to Bt61.1 per share from Bt67 per share in May, the lowest in 10 years, adding that listed companies’ EPS was Bt53.4 per share during the hamburger crisis.
“We expect listed companies’ second-quarter performance to drop the most as their net profit would drop over 40 per cent year on year due to the Covid-19 pandemic that has caused the global economic slowdown,” he said.
He said the second-quarter profit of 43 listed companies in the SET50 Index is expected to be Bt93.3 billion, down 39 per cent year on year as lockdown measures had caused an impact on various industries, especially the tourism industry businesses, such as airports, airlines, hotels, public transportation and department stores.
“Listed companies’ second-quarter performance announcement would cause market volatility in the short term because the profit forecast in the first half of this year accounted for 37 per cent of the profit forecast this year,” he said. “However, listed companies’ profit would increase during the second half of this year in response to the easing of the lockdown and economic stimulus measures.”
He added that listed companies’ third-quarter profit would grow over 30 per cent quarter on quarter.
Sunthorn Thongthip, a senior director at Kasikorn Securities, said there is a chance that listed companies’ EPS this year will drop from the current forecast of Bt64 to Bt65 per share due to the decline in number of tourists, adding that listed companies’ EPS next year is expected to be at Bt85 per share.
“The number of tourists this year would be lower than expected because the second Covid-19 wave has caused many countries to delay reopening,” he said.
Nuttachart Mekmasin, assistant managing director at Trinity Securities’ research department, said listed companies’ second-quarter performance would not cause much impact on investment because the market had already responded to this factor.
“Investors should focus on listed companies’ third-quarter performance rather than on the second-quarter because the index rose over 20 per cent from the lowest point so far,” he said. “However, the index would face severe correction if listed companies’ third-quarter performance is lower than expected.”
Chaiyaporn Nompitakcharoen, deputy managing director of Bualuang Securities’ non-institutional broking group, said listed companies’ second-quarter profit will drop by 40 per cent year on year to the lowest point in response to countries’ lockdown due to the Covid-19 pandemic, adding that listed companies’ performance is expected to recover during the third and fourth quarters of this year and will return to normal at the end of 2021.
“Stocks whose profit will rise gradually are food export, packaging, and consumer finance stocks, while stocks whose performance will recover by the second half of this year are restaurant, petrochemical, fuel and oil refinery stocks,” he said. “Stocks whose performance will recover slowly are electric appliances, automotive parts, service, and commercial bank stocks which may recover by the end of this year or the beginning of the next year.”
However, he added that listed companies’ profit forecast this year would be cut further from the current expected drop of 25 per cent year on year as commercial banks’ second-quarter performance was lower than expected.
By Syndication Washington Post, Bloomberg · Alex Longley · BUSINESS, US-GLOBAL-MARKETS
Oil slipped to near $41 as investors weighed worsening relations between Washington and Beijing alongside flare-ups in coronavirus outbreaks across the world.
Futures in New York edged lower after a 1.7% gain last week. Chinese authorities took over the U.S. consulate in Chengdu on Monday as tit-for-tat tensions continue to simmer between Beijing and the U.S. At the same time, second waves of the pandemic are popping up from Spain to China, casting new potential clouds over the demand outlook, though the surge in cases in the U.S. was easing.
The most notable market moves in recent days have come in the shape of the oil futures curve. Brent’s prompt spread is trading in its largest contango structure since May, a sign of oversupply, while contracts based on the value of Russian and North Sea crude were both weaker last week. Its the latest signal that the market’s re-balancing appears to have taken a pause for breath in recent sessions.
Crude has been trading in a tight range near $40 a barrel since early June after its rapid recovery from lows in April petered out as many countries struggled to bring the virus under control. A drop in the dollar has also supported prices this month, although investors are bracing for fresh supply from the OPEC+ alliance when it relaxes its output curbs from August.
“On the one hand, the risks of a less robust recovery of demand due to coronavirus, and the political tensions between the US and China, are weighing on prices,” said Commerzbank analyst Carsten Fritsch. “On the other, prices are finding support from the weak U.S. dollar and hopes of further corona aid.”
The pace of the recovery in global oil demand is set to slow to below 1 million barrels a day from August through December, Goldman Sachs Group analysts wrote in a report. That stalling return is likely to leave crude prices range bound in the second half of the year, they said.
There is also evidence North American crude production may be starting to recover. U.S. output rose for the first time since March in the week through July 17 after correcting for the impact of Tropical Storm Cristobal, which tore through the Gulf of Mexico in June, while Baker Hughes data released Friday showed the first expansion in drilling in American fields in four months.
