#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

BOT’s extension of reduced FIDF contribution boosts bank shares, but experts warn of decline in profits

Econ

Jul 16. 2020

By The Nation

The price of bank shares rose in response to news that the Bank of Thailand (BOT) will extend the period of reduced contributions to the Financial Institutions Development Fund (FIDF) to reduce costs and boost liquidity for financial institutions so they can continue helping customers.

BOT had brought down the contribution to FIDF from 0.46 per cent to 0.23 per cent.

As of Wednesday (July 15), Bangkok Bank (BBL) shares rose by 2.35 per cent to Bt109 per share, Siam Commercial Bank (SCB) rose by 2.41 per cent to Bt74.50 per share, and Kasikorn Bank (KBANK) by 2.18 per cent.

An analyst at Capital Nomura Securities said that extending the period of reduced FIDF contributions, which was scheduled to end in 2021, will help banks reduce their costs and increase their net interest margin (NIM). However, he said, big banks will benefit more than small and medium banks because they have a higher deposit rate.

“At the end of the first quarter, BBL had the biggest deposit base at Bt2.51 trillion, followed by Krungthai Bank [KTB]’s Bt2.35 trillion, SCB’s Bt2.27 trillion and KBANK’s Bt2.2 trillion,” the analyst said.

“If BOT extends the FIDF reduction period to 2022, then the profits of seven banks, namely BBL, KTB, SCB, KBANK, TMB Bank [TMB], Kiatnakin Bank [KKP] and Tisco Financial Group [TISCO] will rise by Bt18.5 billion. Profits made by BBL, KTB and SCB will increase by approximately 13 per cent,” the analyst said.

However, Pasakorn Wangvivatchareon, a research assistant at Asia Plus Securities, disagreed, saying BOT’s move will not help boost banks’ revenue because they are having to cut interest rates for loans. Instead, he said, the FIDF reduction helps reduce debtors’ interest burden and maintains assets quality.

“We still weight investment in bank shares at lower than the market, because non-performing loans [NPLs] have not reached the highest point and the economy should recover in the first quarter of 2021,” he said.

Meanwhile, a stock analyst at Bualuang Securities said TMB’s profits will rise by 25 per cent now that it has merged its loan portfolio with Thanachart Bank, while the profits of other banks, namely Bank of Ayudhya (BAY), SCB, KBANK, TISCO, KTB, BBL and KKP, will drop due to their provision for doubtful debt and a drop in returns from investment.

“We expect banks’ profits in the second quarter of this year to be at Bt32 billion, down 38 per cent year on year, and banks’ provision for doubtful debts to be at Bt43 billion, up 20 per cent year on year but down 16 per cent quarter on quarter,” the analyst said.

“Banks’ performance in the third quarter of this year would be at Bt38 billion, up 21 per cent quarter on quarter, but down 28 per cent year on year.”

The analyst added that banks’ price to book value (P/BV) is at 0.7 times, the same as it was during the 2008 financial crisis.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Standard Chartered forecasts 5 per cent contraction for Thai economy amid uncertainties

Econ

Jul 16. 2020Tim Leelahaphan, economist at Standard Chartered Bank (Thai)

By THE NATION

Standard Chartered Bank expects financial markets to remain pressured by uncertainty for the remainder of 2020, while foreign fund inflows are returning as the Covid-19 situation improves across the region.

“We have started to see foreign fund inflows returning to emerging markets, including Thailand. However, we need to monitor the continuity of this inflow,” said Tim Leelahaphan, economist, Standard Chartered Bank (Thai).

Around Bt130 billion worth of funds exited the Thai debt market during the first five months of this year, although there has been a net inflow of about Bt50 billion since June.

“Although Asian markets seem to be recovering from Covid-19 somewhat better than in the West, the situation still needs to be monitored closely. If the fund inflow continues, the baht is likely to strengthen against the US dollar. Also, if tourism in Thailand returns this will also be a positive cue for the baht,” added Tim.

Standard Chartered Bank expects the baht to be valued at 31 to a US dollar, or lower at the end of 2020.

“So far fiscal policy and monetary policy have helped shore up the Thai economy. However, the market is taking a wait-and-see approach on how the stimulus package will be shaped and the continuity of fiscal policy for the remainder of the year,” Tim said.

Standard Chartered Bank expects the Bank of Thailand’s Monetary Policy Committee to cut the policy rate by another 25 basis points at its August meeting.

“The policy rate is approaching the zero level. Financial markets are waiting for clearer communication from the Thai central bank regarding its next move that will really benefit the business sector, apart from the impact it will have on financial markets,” said Tim.

“There are questions that need to be answered. Will a negative policy rate be applied in Thailand? Will the central bank impose a quantitative easing programme or yield curve control? These are the questions that financial markets and the business sector are closely monitoring.”

Standard Chartered Bank has maintained its forecast for the Thai economy to contract by 5 per cent this year. The economy is expected to shrink by 13 per cent in the second quarter before bottoming out.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Weakening dollar pushes gold price up

Econ

Jul 16. 2020

By The Nation

The price of gold rose by Bt50 per baht weight in morning trade on Thursday (July 16), the Gold Traders Association reported.

As of 9.31am, the buying price of a gold bar was Bt26,950 per baht weight and selling price Bt27,050, while gold ornaments cost Bt26,469.36 and Bt27,550, respectively.

At close on Wednesday (July 15), the buying price of a gold bar was Bt26,900 per baht weight and selling price Bt27,000, while gold ornaments were priced at Bt26,408.72 and Bt27,500, respectively.

The COMEX (Commodity Exchange) gold price to be delivered in August rose by 40 cent or 0.02 per cent to US$1,813.80 (Bt57,439) per ounce at Wednesday’s close.

The price of gold gained from the weakening dollar. However, investors reduced the demand for safe-haven assets after stock markets worldwide skyrocketed in response to positive news about a Covid-19 vaccine.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

SET encounters volatility amid rising worries about Covid-19

Econ

Jul 16. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index dropped by 0.19 points, or 0.01 per cent, to 1,354.12 in the morning session on Thursday (July 16).

A stock analyst at Krungsri Securities expected the index to fluctuate between 1,345 and 1,365.

“The market gained positive sentiment from the ongoing progress of mRNA-1273 vaccine to deal with the Covid-19 and rising crude oil price,” the analyst said.

The analyst explained that the price of crude oil rose over US$41 per barrel after the US crude oil storage dropped by 7.5 million barrels and Opec+ decided to cut crude oil production to 7.7 million barrels per day from the previous 9.7 million barrels per day.

“However, the index would be under pressure from uncertainty following the second Covid-19 wave in Thailand and the increasing number of new cases in the US where 70,000 new patients were diagnosed recently,” the analyst added.

He recommended that investors buy:

▪︎ Energy stocks that benefit from the rising crude oil price, such as PTT, PTTEP, TOP, PTTGC, IRPC, SPRC and IVL.

▪︎ Food and electronic stocks that benefit from the weakening baht, such as TU, CPF, GFPT, 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, PRM, PTL, AJ, STARK and CBG.

▪︎ Stocks that benefit from the government’s tourism stimulus measures, such as MINT, CENTEL and ERW.

The SET Index closed at 1,354.31 on Wednesday (July 15), up 13.24 points or 0.99 per cent. The volume of total transactions was Bt59.689 billion with an index high of 1,356.93 and a low of 1,344.76.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Another Fed official backs rates at zero until inflation tops 2%

Econ

Jul 16. 2020Patrick Harker, president and chief executive officer of Federal Reserve Bank of Philadelphia, during a Bloomberg Television interview at the Jackson Hole economic symposium in Moran, Wyo., on Aug. 23, 2019. MUST CREDIT: Bloomberg photo by David Paul Morris.

By Syndication Washington Post, Bloomberg · Matthew Boesler · BUSINESS, US-GLOBAL-MARKETS 

The U.S. central bank should consider holding interest rates near zero until inflation is above its 2% target, said Philadelphia Fed President Patrick Harker, echoing his colleague Lael Brainard and signaling a consensus may be building among policy makers.

“We’ve been saying for a long time that the 2% inflation goal is symmetric, which means we should overshoot it. We were having a difficult time doing that, like all developed economies,” Harker said Wednesday during a Bloomberg Television interview with Michael McKee. “I’m supportive of the idea of letting inflation get above 2% before we take any action with respect to the fed funds rate.”

Fed officials left the benchmark policy rate near zero at their meeting last month and signaled they would probably keep it there through 2022, according to their quarterly forecasts. The rate-setting Federal Open Market Committee, which Harker votes on this year, next gathers July 28-29.

The Philadelphia Fed chief’s comments “suggest growing momentum behind this view at the U.S. central bank and should continue to support risk appetite as investors look ahead to the coming Fed pivot to a new phase of monetary policy in which the FOMC will make longer-range commitments,” Evercore ISI Vice Chairman Krishna Guha said in an email to clients following the interview.

In a separate move on Wednesday that underscores the international nature of the growing consensus around strategy, Bank of Canada officials announced they would hold their benchmark rate at the current setting near zero until they had “sustainably achieved” their own 2% inflation goal.

In the U.S., central bankers have rolled out nine emergency lending programs and ramped up asset purchases to ensure financial market function during the pandemic. Minutes of their last meeting in June showed officials had a wide-ranging discussion about longer-term strategies for supporting the economic recovery, including options for enhancing their guidance to the public on how long they would keep their benchmark overnight rate at zero.

“Forward guidance constitutes a vital way to provide the necessary accommodation,” Fed Governor Brainard said Tuesday. “Refraining from liftoff until inflation reaches 2% could lead to some modest temporary overshooting, which would help offset the previous underperformance.”

Harker said his bank was in the process of revising its forecasts for the economy given the resurgence of coronavirus cases in the country’s South and Southwest regions, and warned that a failure to extend enhanced unemployment insurance benefits when they expire at the end of month would further worsen the situation.

“There are things I worry about. One is a cliff effect of unemployment insurance,” Harker said. “Yes, there is a need to get people back to work — and people want to go back to work. But we can’t just cut it off, because if we cut it off, people will stop spending and that will be a hit on the economy.”

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Stocks jump to more than month high; dollar falls

Econ

Jul 16. 2020

By Syndication Washington Post, Bloomberg · Sarah Ponczek, Amena Saad · BUSINESS, US-GLOBAL-MARKETS 
U.S. stocks climbed to a more than a one-month high amid optimism about progress in developing a vaccine for coronavirus. The dollar weakened and crude oil increased.

The S&P 500 gained 0.9%, briefly drifting back into positive territory for the year. Varying reports on trade tensions between the U.S. and China buffeted shares. The tech-heavy Nasdaq 100 swung between gains and losses all day before closing in the green as some investors rotated into value shares. The Federal Reserve said the economy showed signs of a nascent recovery at the beginning of July.

“The virus vaccine is inspiring more bullish emotions,” said Michael Zigmont, Head of Trading & Research at Harvest Volatility Management LLC. “Forget valuations, forget earnings, forget economic news.”

Moderna Inc. surged to a record after the drugmaker reported promising trial results. AstraZeneca Plc rose on optimism about its vaccine efforts. The vaccine developments brought a rush of optimism to financial markets that have struggled to make headway recently in the face of new outbreaks across the U.S. and Asia.

“”These are obviously some very encouraging developments, particularly on the covid front,” said Candice Bangsund, portfolio manager of global asset allocation at Fiera Capital Corp. “This has allowed markets to continue thriving even despite rising cases throughout the U.S and has helped to counter ongoing U.S.-China trade tensions.”

President Donald Trump has indicated to aides that he doesn’t want to further escalate tensions with Beijing, and has ruled out additional sanctions on top officials for now, according to people familiar with the matter. China reportedly summoned the U.S. ambassador regarding the Hong Kong Autonomy act signed Tuesday by Trump.

Elsewhere in markets, oil gained after a report pointed to a drop in U.S. crude stockpiles. Atlantia SpA surged 25% as Italy’s government moved to resolve a long-running dispute linked to a 2018 bridge collapse.

In Asia, shares in Hong Kong underperformed, while those in Shanghai fell amid signs policymakers are uneasy over the pace of recent gains.

These are some of the main moves in markets:

Stocks

The S&P 500 Index gained 0.9% to 3,226.56 as of 4:05 p.m. EDT, the highest in more than five weeks.

The Dow Jones industrial average increased 0.9% to 26,870.10, the highest in five weeks.

The Nasdaq Composite Index climbed 0.6% to 10,550.49.

The MSCI All-Country World Index gained 1.1% to 549.55, the highest in more than 20 weeks on the biggest rise in more than a week.

Currencies

The Bloomberg Dollar Spot Index fell 0.4% to 1,203.39, the lowest in five weeks on the largest fall in a week.

The euro climbed 0.1% to $1.1408, the strongest in more than four months.

The Japanese yen appreciated 0.3% to 106.93 per dollar, the strongest in more than three weeks on the largest climb in two weeks.

Bonds

The yield on two-year Treasurys declined less than one basis point to 0.15%.

The yield on 10-year Treasurys gained one basis point to 0.63%.

Germany’s 10-year yield climbed less than one basis point to -0.44%.

Commodities

West Texas Intermediate crude gained 1.8% to $41.03 a barrel, the highest in almost 19 weeks.

Gold strengthened 0.2% to $1,812.20 an ounce, the highest in almost nine years.

Copper dipped 1.4% to $2.89 a pound, the largest dip in almost five weeks.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

BOT cryptocurrency rolled out for businesses before public debut 

Econ

Jul 16. 2020Vachira Arromdee, BOT assistant governor

By The Nation

The Bank of Thailand has entered third-phase development of its “central bank digital currency” (CBDC) and plans to expand its use among large businesses, Vachira Arromdee, BOT assistant governor, said on Wednesday (July 15).

The central bank is already using CBDC for financial transactions with some big businesses, she revealed.

In September, the BOT will begin using the digital currency for transactions with the Hong Kong Monetary Authority, she added.

“The central bank is also thinking about expanding use of the cryptocurrency to the general public, but a comprehensive study must be completed before taking such action.”

Vachira said the cryptocurrency may have negative impacts on commercial banks by removing the need for a middleman in financial transactions.

However, on the positive side, it would reduce the cost of financial transactions, she said.

She cited China, saying public use of digital currency in the form of tokens had not affected the financial system there.

The BOT’s digital currency differs from Bitcoin, which is currently traded in the global market. Bitcoin is not backed by assets, so its value is highly volatile.

In contrast, the central bank’s digital currency will be backed by tangible assets such as country’s international reserve, making it a stable currency.

However, broad public use of digital currency via e-wallets is a big issue, so the central bank will look carefully look at the pros and cons, including its impact on financial stability, she added.

Thakorn Piyapan, head of the Krungsri Consumer Group, supports a public rollout of the BOT cryptocurrency, saying it would promote mobile banking and e-wallets and reduce the cost of printing and using banknotes.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

Banking chief Predee tipped to become finance minister

Econ

Jul 15. 2020Predee Daochai, president of Kasikornbank, looks set to replace Finance Minister Uttama Savanayana.

By The Nation

Predee Daochai, president of the Thai Bankers’ Association, is tipped to become Thailand’s next finance minister while former deputy transport minister Pailin Chuchottaworn may take the Energy Ministry helm, Bangkokbiznews website reported today.

Speculation over the ministerial posts comes after four ministers quit the ruling Palang Pracharat Party on July 10 while retaining their Cabinet posts.

Pailin Chuchottaworn, former president and CEO of PTT, is tipped to become energy minister.

However, a Palang Pracharat source today said the four – Finance Minister Uttama Savanayana, Energy Minister Sontirat Sontijirawong, Minister of Higher Education, Science, Research and Innovation Suvit Maesincee, and Kobsak Pootrakool, deputy secretary-general to the PM on political affairs – have informed PM Prayut Chan-o-cha that they will resign from their ministerial posts. The four are credited with running Thailand’s economy.

The source said that Predee has been invited to become the next finance minister when Prayut reshuffles the Cabinet, which is expected in the next few weeks.

Predee is also president of Kasikornbank and has worked in stock securities, leasing, insurance and banking since he gained his master’s in law at the University of Illinois in the United States. 

However, he has denied being offered the post of finance minister.

Meanwhile, Pailin Chuchottaworn is favourite to replace Sontirat as new energy minister.

Pailin was deputy transport minister from 2017 to 2019 and before that president and CEO of energy conglomerate PTT from 2011 to 2015.

He faces competition, however, from other influential candidates for energy minister. Industry Minister Suriya Juangroongruangkit is thought to be eyeing the post, along with deputy finance minister Santi Promphat. The two are among key leaders of the ruling Palang Pracharat Party.

Reports also suggest that Deputy Prime Minister Somkid Jatusripitak will resign from his post. Somkid leads the economic team and is under high pressure from both government politicians and voters who are disappointed with his handling of the economy.

Thosaporn Sirisumphand, secretary-general of the National Economic and Social Development Council, is favourite to replace Deputy Prime Minister Somkid Jatusripitak.

Thosaporn Sirisumphand, secretary-general of the National Economic and Social Development Council, a state-owned think-tank, is reported to be favourite to replace Somkid.

#ศาสตร์เกษตรดินปุ๋ย : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

SET boosted by vaccine progress

Econ

Jul 15. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index closed at 1,354.31 today (July 15), up 13.24 points or 0.99 per cent. The volume of total transactions was Bt59.689 billion with an index high of 1,356.93 and a low of 1,344.76.

In the morning session, a stock analyst at Krungsri Securities expected the index to rebound to between 1,350 and 1,355 before falling, in response to positive news about a Covid-19 vaccine and the rising crude oil price.

“[US biotech company] Moderna has just revealed that its mRNA-1273 vaccine helped strengthen Covid-19 patients’ immunity,” the analyst said.

“Meanwhile, the price of crude oil rose to over US$40 per barrel again.”

However, the analyst advised investors to beware of mass sell-offs due to uncertainty over a possible second wave of Covid-19 in Thailand after a rise in the number of new cases.

“Also, we advise investors to follow developments of the Opec+ meeting considering an agreement on reducing oil production,” the analyst added.

The 10 stocks with the highest trade value today were CPF, STGT, EA, PTTEP, AOT, PTT, CPALL, MINT, STA and KBANK.

As of 4.30pm, the price of crude oil rose by US$0.55 or 1.37 per cent to $40.84 per barrel, while gold rose by $1.70 or 0.09 per cent, to $1,815.10 per ounce.

Changes in Asian indices were mixed:

Japan’s Nikkei Index closed at 22,945.50, up 358.49 points, or 1.59 per cent.

China’s Shang Hai SE Composite Index closed at 3,361.30, down 53.31 points, or 1.56 per cent, while the Shenzhen SE Component Index closed at 13,734.13, down 262.33 points, or 1.87 per cent.

Hong Kong’s Hang Seng Index closed at 25,481.58, up 3.69 points, or 0.014 per cent.

South Korea’s KOSPI Index closed at 2,201.88, up 18.27 points, or 0.84 per cent.

Taiwan’s TAIEX Index closed at 12,202.85, down 6.16 points, or 0.050 per cent.