The Stock Exchange of Thailand (SET) Index fell by 1.24 points, or 0.08 per cent, to 1,535.25 in the morning session on Tuesday.
An analyst at Krungsri Securities expected the index to fall to between 1,525 and 1,530 points due to uncertainty over the rollout of US economic stimulus measures amid political turmoil and China’s move to lock down Hebei province after 103 Covid-19 cases were found.
“Besides, the decline in foreign funds flow would pressure the index,” he said.
He recommended that investors buy:
▪︎ PSL, TTA and RCL, which would benefit from the rise in freight rate.
▪︎ KBANK, SCB, BBL and BLA, which benefit from rising US bond yield.
▪︎ PTTEP, PTTGC, TOP and IVL, which benefit from rising oil price and improved fourth-quarter performance.
The SET Index closed at 1,536.49 on Monday, up 0.05 points. Total transactions amounted to Bt93.80 billion with an index high of 1,550.75 and a low of 1,527.75.
The price of gold was unchanged in morning trade on Tuesday, after falling by Bt50 per baht weight at close on Monday, the Gold Traders Association reported.
As of 9.25am, the buying price of a gold bar was Bt26,300 per baht weight and selling price Bt26,400, while gold ornaments were priced at Bt25,832.64 and Bt26,900, respectively.
Spot gold price moved to US$1,847.5 (Bt55,731) per ounce in the morning, while the Comex (Commodity Exchange) gold to be delivered in February rose by $15.4 to $1,850.8 per ounce on Monday, thanks to mass buy-ups of the precious metal after its price fell sharply in the previous week, as well as the fall in the US stock market.
Hong Kong gold price dropped by HK$50 to $17,070 (Bt66,402) per tael, the Chinese Gold and Silver Exchange Society reported.
By Syndication Washington Post, Bloomberg · Vildana Hajric, Kamaron Leach
U.S. stocks fell for the first time in five sessions as investors started the week in a cautious mood with equity prices near all-time highs.
The S&P 500 was led lower by the real estate and consumer discretionary sectors, while energy companies were the biggest gainers in the benchmark index. Eli Lilly & Co. lifted heath-care shares. The dollar strengthened against all its major peers, with demand supported by elevated Treasury yields.
Weighing on the minds of investors are worries that equities are running too hot and valuations are stretched at a time when major parts of the world are grappling with the worst of the covid-19 pandemic.
“Keep in mind though, after big runs like we saw last week, it’s natural for the market to take a breather,” said Chris Larkin, managing director of trading and investing product at E*Trade Financial. “Traders looking for new opportunities may be wise to look beyond behemoth tech stocks.”
Benchmark Treasury yields topped 1% last week on bets that Democratic lawmakers will enact big spending packages to drive the economic recovery out the pandemic. The move reset expectations for a range of asset classes and sparked debate over whether higher yields might jeopardize the current environment of easy financial conditions.
Ten-year U.S. yields climbed to almost 1.14% on Monday, the highest level since March.
“Ultimately it goes back to the 10- year,” wrote KC Rajkumar and Jahanara Nissar of Lynx Equity Strategies. A higher yield “points to higher inflation down the road — which is negative for stocks. We are not there yet, but as the 10-year inches higher — the closer we get.”
Twitter Inc. fell after the social media platform permanently banned President Donald Trump after a mob invaded the Capitol building last week. Mirabaud Securities analyst Neil Campling said the ban shows the company is making editorial decisions, and opens the door to more regulation of social media under the next administration.
Shares of Facebook Inc., which also suspended Trump’s account, also declined. Meanwhile, House Democrats Monday introduced a resolution to impeach Trump for a second time, setting up a vote this week unless Vice President Mike Pence uses his constitutional authority to remove the president.
Bitcoin tumbled, with prices sliding as much as 20% on Monday. Some investors have said the digital currency’s recent gains defy logic and the U.K.’s financial watchdog issued a statement that consumers in crypto should be prepared to lose all their money. The token traded down about 14% at $32,835.
Elsewhere in markets, the MSCI Asia Pacific Index slipped. Commodities were broadly lower on the back of the stronger dollar, with West Texas Intermediate oil trading near $52 a barrel.
These are some of the main moves in markets:
Stocks
The S&P 500 Index declined 0.7% to 3,799.61 as of 4 p.m. EST, the first retreat in a week.
The Dow Jones industrial average dipped 0.3% to 31,008.69, the first retreat in a week.
The Nasdaq Composite Index declined 1.3% to 13,036.43, the largest drop in a week.
The Stoxx Europe 600 Index sank 0.7% to 408.41, the biggest dip in three weeks.
The MSCI All-Country World Index sank 0.7% to 658.67, the first retreat in a week and the largest decrease in three weeks.
Currencies
The Bloomberg Dollar Spot Index rose 0.5% to 1,126.98, the highest in two weeks.
The euro sank 0.5% to $1.2156, the weakest in almost four weeks on the largest decrease in more than a week.
The British pound declined 0.3% to $1.3521, the weakest in almost two weeks.
The Japanese yen depreciated 0.2% to 104.17 per dollar, the weakest in more than a month.
Bonds
The yield on 10-year Treasurys gained two basis points to 1.13%, reaching the highest in about 10 months on its seventh straight advance.
Germany’s 10-year yield gained two basis points to -0.50%, the highest in two months.
Britain’s 10-year yield gained 31 basis points to 0.309%, its fifth straight advance and the biggest advance on record.
Commodities
West Texas Intermediate crude dipped 0.3% to $52.10 a barrel, the first retreat in a week.
Copper declined 3% to $3.56 a pound, the lowest in a week.
A survey of 369 Thai Chamber of Commerce members found that the confidence index at the end of 2020 had dropped from 33.7 to 31.8 – the lowest since July – due to the new wave of Covid-19 infections, the University of the Thai Chamber of Commerce (UTCC) said.
The new wave directly affected the economy as events were cancelled and people could not celebrate the arrival of the new year.
The confidence index for the next six months is expected to remain below 50 because the business sector is unsure about the current situation, said Thanawat Phonwichai, director of UTCC’s Centre for Economic and Business Forecasting.
Confidence dropped last month due to fears of widespread infections affecting people’s lives, business and economy, concern of a lockdown and the strengthening of the currency.
However, the index was propped up by the Monetary Policy Committee’s resolution to maintain the policy rate at 0.5 per cent to support recovery and the second phase of stimuli like the government’s “Khon La Khrueng” co-paying campaign, “Rao Tiew Duay Kan” travel campaign and “Shop Dee Mee Kuen” (Shop and Payback) campaign.
“If the virus cannot be contained in the next three months, it will have an adverse impact on the employment sector. The unemployment rate is currently 2 per cent, but if it rises, the economy will be affected,” Thanawat said.
UTCC’s Centre for Economic and Business Forecasting expects Thailand’s gross domestic product (GDP) to rise only 2.2 per cent from the previously expected 2.8 per cent due to a number of uncontrollable factors.
The business sector, meanwhile, is urging the government to offer financial reprieve by reducing interest rate, delaying tax payment and helping support employment. They also want the government to bring the outbreak under control quickly to stimulate investment and inject money into the economy before it collapses.
Finance Ministry urges Cabinet to okay Bt200-bn cash injection
EconJan 12. 2021Finance Minister Arkhom Termpittayapaisith
By The Nation
The Finance Ministry has called on the Cabinet to allow a Bt200-billion cash injection in the economy to support businesses and people who have been affected by the new round of Covid-19 infections.
“The government does not need to borrow more money, as we can use what is left of last year’s Bt1-trillion emergency loan,” Finance Minister Arkhom Termpittayapaisith said after a meeting with Prime Minister Prayut Chan-o-cha on Monday.
The Cabinet is set to launch a new relief package on Tuesday to help businesses and workers who have been hit by the second round of the outbreak.
As for calls for a Bt4,000 cash handout to affected people for two months, Arkhom said he did not know how to justify such compensation. He also did not confirm whether the government will repeat last year’s Bt5,000 three-month cash handout.
Under the Finance Ministry’s plan, state banks like the Government Savings Bank (GSB), Bank for Agriculture and Agricultural Cooperatives (BAAC) and the Small and Medium Enterprise Development Bank of Thailand will provide liquidity to clients.
This support will include debt holiday and interest rate cut, Kulaya Tantitemit, acting director-general of the Fiscal Policy Office, said on Monday.
She said the ministry has up to Bt200 billion in hand, adding that state banks had offered similar relief after the first round of the outbreak.
GSB’s debt holiday ended at the end of last year, while BAAC’s is due to expire in June this year.
A source in the financial market said the central bank and commercial banks are also expected to offer debtors new relief measures, like extending debt repayment period, cutting interest rate or allowing partial payment. In the first round of the outbreak last year, banks offered debt holidays and many clients have recently resumed payments, though some are asking for a suspension of their debt.
Kobsak Duangdee, secretary-general of the Thai Bankers’ Association, said the Bank of Thailand (BOT) has talked to commercial banks about new measures that can be introduced to support borrowers, adding that BOT expects to launch
relief measures for specific target groups. At the same time, commercial banks will also implement new measures to support businesses.
Dechapiwat Na Songkhla, director of the Budget Bureau, said the government still has Bt400 billion of the Bt1-trillion emergency loan left. The government has also set aside Bt130 billion as a contingency fund to deal with Covid-19 and other potential disasters such as severe drought or floods.
Kulit Sombatsiri, the Energy Ministry’s permanent secretary, said the ministry has also proposed measures to ease the burden of people affected by the virus fallout. However, he did not elaborate, only saying that more information will be available after the Cabinet’s approval on Tuesday.
Observers believe the government may subsidise utilities, such as electricity and water.
Kulit also said the ministry will push state agencies under its supervision like PTT and the Electricity Generating Authority of Thailand to make new investments this year, as energy consumption has not dropped despite the surge of infections.
He said the ministry will also spend Bt6.5 billion of the Energy Conservation Fund and is now open to proposals from agencies under its supervision. The ministry will also earmark Bt25 million for each of the 77 provinces, he added.
The Federation of Thai Capital Market Organisations (Fetco) Investor Confidence Index for the next three months has fallen by 19.1 per cent to 130.63 due to uncertainty over recovery of the tourism industry, global conflicts, economic slowdown and new round of Covid-19 infections.
Fetco chairman Paiboon Nalinthrangkurn, however, said investors’ confidence remains high over hope for an influx of foreign funds, economic recovery and better turnover from listed companies.
He added that investors were drawn to shares in the banking, petrochemical and technology industries, and had no interest in shares in the tourism, fashion and print media industries.
Paiboon said the Thai stock market could hit 1,600 points by the end of this year on hopes over Covid-19 vaccine, but it would face short-term correction due to uncertainty over the vaccine’s side effects and US President-elect Joe Biden’s failure to boost the economy.
“The Thai stock market, however, will not face immediate correction because the market has not reached the level before the Covid-19 pandemic arrived,” he said.
He said the stock market would move into positive territory in the long term thanks to the influx of foreign funds, government measures to contain the spread of Covid-19 and to stimulate the economy, growth in listed companies’ turnover, high market liquidity, baht appreciation and low interest rate.
He said political unrest will not affect the market.
“These positive points will draw foreign investors to buy cyclical stocks such as shares in banking, energy, oil refinery, petrochemical, ICT and retail sectors,” he said, adding that shares in the tourism industry will require more time to recover.
Charn Issara Group is calling on the government to co-pay salaries of people in the tourism business, especially in hotels, for at least a year to mitigate the impact of the Covid-19 outbreak.
Songkran Issara, chief executive officer of Charn Issara Development Public Company, said the governments of some European countries are subsidising wages by 80 per cent for as long as one year to encourage businesses to not lay off workers.
He said that once the private sector runs out of money, it will have to lay off staff, which means the government will still have to step in to help people.
The Stock Exchange of Thailand (SET) Index closed at 1,536.49 on Monday, up 0.05 points (0 per cent). Total transactions amounted to Bt93.80 billion with an index high of 1,550.75 and a low of 1,527.75.
In the morning session, an analyst at Krungsri Securities forecast the day’s index would hit 1,550 points on hopes of US stimulus measures and the sharp rise in the price of oil.
“However, investors should beware of volatility due to the weakening baht and the surge in Covid-19 cases,” he said.
The 10 stocks with the highest trade value today were KTC, EA, DELTA, HANA, ADVANC, GPSC, PTT, CPALL, IVL and PTTGC.
As of 4.30pm, the price of oil dropped by US$0.25 or 0.48 per cent to $51.99 per barrel, while gold rose by $15.20 or 0.83 per cent, to $1,850.60 per ounce.
Other Asian indices were mixed:
China’s Shang Hai SE Composite Index closed at 3,531.50, down 38.61 points or 1.08 per cent, while Shenzhen SE Component Index closed at 15,115.38, down 203.91 points or 1.33 per cent.
Hong Kong’s Hang Seng Index closed at 27,908.22, up 30.00 points or 0.11 per cent.
South Korea’s KOSPI Index closed at 3,148.45, down 3.73 points or 0.12 per cent.
Taiwan’s TAIEX Index closed at 15,557.30, up 93.35 points or 0.60 per cent.
Japan’s Nikkei Index was closed for Coming of Age Day.
The Brexit agreement that Britain has reached with its European Union (EU) partners will not only benefit the United Kingdom, but also Thailand, said Pimchanok Vonkorpon, director-general of the Commerce Ministry’s Trade Policy and Strategy Office (TPSO).
Though the trade agreement allows the UK and EU to continue trading with zero tariff and zero quota, the customs clearance process and health requirements have become more complicated and expensive.
Thailand, however, will benefit greatly not just from the new UK tax rate structure but also from more trading opportunities, especially since 732 new items have been added to the original list of 792 items exempted from tax.
Items benefiting from lower import tariff include processed chicken, rubber gloves, tires, auto equipment and parts, jewellery, sauces and petfood, etc.
The Commerce Ministry is also focusing on negotiating a free-trade agreement (FTA) with the UK, Pimchanok said, adding that Thailand stands to gain significantly if an FTA is signed.
In the first 11 months of last year, Thailand exported US$2.83 billion worth of goods to the UK, accounting for 1.3 per cent of the total export market, marking a drop of 20.8 per cent compared to the previous period. Meanwhile, imports from the UK stood at $1.64 billion for the same period, marking a drop of 26.7 per cent and a trade surplus of $1.19 billion, which dropped by 10.8 per cent.
Shares in Bangkok Commercial Asset Management (BAM) opened over 2 per cent down on Monday after the Legal Execution Department suspended January’s auction of non-performing loans in response to the Covid-19 outbreak.
At Friday’s close, BAM’s stock price had dropped by Bt0.60 or 2.73 per cent to Bt21.40 per share.
Asia Plus Securities said the Legal Execution Department’s move would affect BAM’s non-performing loans (NPLs) sales, which accounted for 69 per cent of the company’s revenue in the first nine months last year.
The securities company added that the Legal Execution Department would extend the suspension of auction sales until February if Thailand cannot contain the spread of Covid-19.
“We expect BAM’s net profit last year to drop by 69.3 per cent due to a two-month closure of the Legal Execution Department in response to the Covid-19 outbreak, but rise by 60.2 per cent this year amid the economic recovery, the securities company said.
“Also, we expect the company to focus on selling non-performing assets online to mitigate the impact of the Legal Execution Department’s temporary closure.”
The securities company also forecast BAM shares’ future value (FV) at Bt26 per share this year based on net asset value of Bt84 billion, advising investors to switch shares.
Finance Minister Arkhom Termpittayapaisith
