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Stocks climb to record highs (nationthailand.com)

Stocks climb to record highs

EconDec 02. 2020

By Syndication Washington Post, Bloomberg · Claire Ballentine, Kamaron Leach

U.S. stocks started December by rising to record highs as a renewal of aid talks added to optimism over progress on coronavirus vaccines. The dollar extended its slide to a more than two-year low and Treasury yields jumped.

The risk-on mood powered the S&P 500 and Nasdaq Composite to all-time highs a day after posting double-digit gains last month. Traders continued to bet vaccine news will lead to an economic surge next year. There were also signs that appetite is picking up for a federal spending plan. President-elect Joe Biden urged Congress to pass a relief package.

Communication services, financial and information technology were the biggest S&P industry sector gainers. House Speaker Nancy Pelosi, D-Calif., delivered a new proposal for a stimulus package and Senate Majority Leader Mitch McConnell, R-Ky., said Tuesday he is circulating among Republicans his own revised plan, which has the backing of President Donald Trump.

“Investors have been prepared to look beyond the near-term continued rise in covid-19 cases in many regions,” said Mark Haefele, UBS Global Wealth Management’s chief investment officer. “They have focused instead on the potential for a return to normal social and economic activity based on the widespread roll out of effective vaccines in the first half of 2021. We see further upside for global equities in this environment, but also expect market leadership to continue to shift.”

After a record month for global stocks, there’s no end in sight for the rally that’s been fueled by vaccine breakthroughs. Pfizer Inc. and partner BioNTech SE have sought regulatory clearance for their covid-19 vaccine in the European Union and BioNTech said it could start shipping the first doses “within hours” after approval.

“People have faith that even though things are very uncertain around the virus in the short term, if they look out six months or a year, it’s credible things will be better,” said Alec Young, chief investment officer at Tactical Alpha LLC.

Strong economic data from Asia also added support to the positive mood in markets. Indexes of factory activity in some of North Asia’s biggest export-led economies rebounded in November and China’s recovery continues to lift the region.

It’s not all good news though. Federal Reserve Chairman Jerome Powell cautioned lawmakers that the U.S. economy remains in a damaged and uncertain state during testimony at a Tuesday hearing before the Senate Banking Committee.

In other markets, gold advanced. Oil fell as OPEC+ sought more time to reach a deal on production policy.

Bitcoin pulled back after almost reaching $20,000 for the first time.

Here are some of the main moves in markets:

Stocks

The S&P 500 Index advanced 1.1% to 3,662.41 as of 4:02 p.m .EST, the highest on record with the largest gain in a week.

The Dow Jones industrial average advanced 0.6% to 29,823.52, the biggest gain in a week.

The Nasdaq Composite Index gained 1.3% to 12,355.11, the highest on record with the largest gain in a week.

The Stoxx Europe 600 Index advanced 0.7% to 391.90, the biggest gain in a week.

The MSCI All-Country World Index advanced 1.2% to 625.45, the highest on record with the largest gain in a week.

Currencies

The Bloomberg Dollar Spot Index sank 0.7% to 1,136.59, the lowest in more than two years on the biggest dip in almost four weeks.

The euro surged 1.2% to $1.2075, the strongest in more than two years on the largest jump in about eight months.

The Japanese yen was little changed at 104.30 per dollar.

Bonds

The yield on 10-year Treasuries climbed eight basis points to 0.92%, the highest in almost three weeks on the largest surge in more than three weeks.

Germany’s 10-year yield jumped four basis points to -0.53%, the highest in almost three weeks on the biggest surge in more than three weeks.

Britain’s 10-year yield climbed four basis points to 0.347%, the highest in more than two weeks on the largest surge in more than three weeks.

Commodities

West Texas Intermediate crude sank 1.7% to $44.55 a barrel, the lowest in more than a week on the biggest tumble in more than two weeks.

Gold strengthened 2.1% to $1,814.78 an ounce, the largest jump in almost four weeks.

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Govt hits brakes on ‘old car for new car’ proposal (nationthailand.com)

Govt hits brakes on ‘old car for new car’ proposal

EconDec 02. 2020Deputy Prime Minister Supattanapong Punmeechaow 

By The Nation

The Industry Ministry’s proposed “old car for new car” scheme needs more time and discussion before being finalised, Deputy Prime Minister Supattanapong Punmeechaow said on Tuesday. He added that the scheme is not ready to be implemented given the lack of clear details.

Industry Minister Suriya Juangroongruangkit told Tuesday’s Cabinet meeting that work on the details of the scheme had not been completed.

Government spokesman Anucha Burapachaisri said the scheme would be shelved for the foreseeable future to prevent confusion among car buyers and the auto market.

Anucha added that Prime Minister Prayut Chan-o-cha told the relevant parties to consider the idea carefully.

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Cabinet agrees to set aside Bt1.78 billion for 2 grassroots economy projects (nationthailand.com)

Cabinet agrees to set aside Bt1.78 billion for 2 grassroots economy projects

EconDec 02. 2020Government spokesperson Anucha Burapachaisri 

By The Nation

The Cabinet on Tuesday agreed to earmark Bt1.78 billion to fund two projects to boost the grassroots economy, government spokesperson Anucha Burapachaisri said.

Of the total, Bt1.6 billion will be spent on enhancing the capacity of machinery used by the Rice Department to improve the quality of rice grown in the country. This fund will also cover the purchase of new machines and equipment.

The remaining Bt176 million will be spent by the Culture Ministry’s Office of the Permanent Secretary to develop community products.

Ratchada Thanadirek, the government’s deputy spokesperson, said the Cabinet has also approved the Energy Regulatory Commission’s Phase 4 of the 2020-2022 power development plan.

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Pros and cons on Thailand pursuing FTA with EU published on DTN website (nationthailand.com)

Pros and cons on Thailand pursuing FTA with EU published on DTN website

EconDec 02. 2020Auramon Supthaweethum 

By The Nation

The Department of Trade Negotiations has released a complete study on the pros and cons of Thailand resuming free-trade talks with the European Union (EU) for Commerce Minister Jurin Laksanawisit to consider.

Auramon Supthaweethum, the department’s director-general, said the Institute of Future Studies for Development has completed the study and it has been published on www.dtn.go.th.

The study shows that if Thailand and 27 EU members, excluding UK, cancel all import tariff, then in the long-run Thailand’s gross domestic product will be boosted by 1.28 per cent worth Bt205 billion per year.

Exports to the EU will rise by 2.83 per cent or Bt216 billion per year, while imports from EU will expand 2.81 per cent or Bt209 billion per year. Thai products that have good growth potential in the EU market include vehicles, auto parts, garments and textile, rubber and chemical products.

The study also shows that upgrading related sectors, such as transport, finance and insurance, in line with the free-trade accord (FTA) will reduce production costs in related industries.

She added that the department will discuss with related parties to work out a negotiation framework based on Thailand’s best interests and will seek ways to prevent possible adverse impacts on the country.

Last year, the EU (excluding UK) was Thailand’s fifth largest trading partner after Asean, China, Japan and the US. Trade between Thailand and the EU was worth US$38.23 billion (Bt1.16 trillion), of which $19.74 billion came from Thai exports.

Key products exported to the EU from Thailand were computers, automobiles, auto parts, gems and jewellery, air conditioners, rubber products and processed chicken.

Key imports from the EU included machineries, electric machines, chemical products, pharmaceuticals and auto equipment.

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Tax-privilege applications from medical firms jump 132% (nationthailand.com)

Tax-privilege applications from medical firms jump 132%

EconDec 02. 2020

By The Nation

The number of medical companies applying for Board of Investment (BOI) tax privileges during the first nine months of this year jumped 132 per cent to 65, according to BI secretary-general Duangjai Asawachintachit.

Total value of the projects also soared 75 per cent year on year to Bt15 billion.

She attributed the surge to a response to the Covid-19 pandemic.

From 2018 up to the end of September this year, the BOI has received 129 applications from medical firms with projects totalling Bt30.887 billion in value.

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Asean’s new online customs system set to boost trade (nationthailand.com)

Asean’s new online customs system set to boost trade

EconDec 01. 2020

By The Nation

The region’s businesses can now access a powerful new online trading system connecting countries under a single cross-border transit regime, Asean Secretary-General Lim Jock Hoi announced on Monday.

The Asean Customs Transit System (ACTS) will reduce intra-Asean trading challenges and enable companies to benefit fully from the Asean Economic Community (AEC) and the free movement of goods across the region, he added.

The new system aims to meet twin goals set by Asean economic ministers in 2017 – to reduce trade transaction costs by 10 per cent by 2020 and double intra-Asean trade between 2017 and 2025.

The ACTS has been developed to allow businesses to lodge e-transit declarations directly with Asean customs authorities and to track the movement of their goods from departure to delivery at the final destination.

“The implementation of the Asean Customs Transit System plays a vital role in facilitating seamless movement of goods in the region. I believe the system would be an excellent tool in enhancing Asean’s trade and production networks as well as establishing a more unified market for its firms and consumers,” said Lim.

“The ACTS could also support post-Covid recovery to accelerate the transit movement of medical supplies, vaccines and Personal Protective Equipment within the member states,” he added.

Under the ACTS, businesses can make a single customs transit declaration that covers the transport of goods across multiple Asean countries, without the need to make repeated customs declarations or change vehicles at each border.

Faster customs clearance at borders helps accelerate transit movements, and reduce the time and expense of carrying out regional trade in goods, to the benefit of producers and consumers across the continental Asean region.

The system is managed by a permanent ACTS Central Management Team based in the Asean Secretariat in Jakarta, with support from the EU-funded ARISE Plus programme.

“The ACTS is a remarkable achievement that is testament to the strong, dynamic and long-standing partnership between Asean and the European Union,” said Koen Doens, director general for International Cooperation and Development at the European Commission.

The first successful ACTS transit movement occurred on October 23-24 with a truck travelling from Singapore via Malaysia to Thailand. The system will soon be available in Myanmar, and depending on business needs may later be expanded to Brunei, Indonesia and Philippines.

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Weakening dollar will make Thai investments attractive next year, predicts expert (nationthailand.com)

Weakening dollar will make Thai investments attractive next year, predicts expert

EconDec 01. 2020Tak Bunnag, head of Krungsri Bank’s Global Markets Group 

By
Wichit Chaitrong
The Nation

Next year, the Thai baht, stocks and bonds will be attractive for foreign investors because the US dollar is on a weakening trend, Tak Bunnag, chief of Krungsri Bank’s Global Markets Group, said on Tuesday.

The baht is expected to remain strong next year, moving up toward Bt29 against the dollar from the current rate of Bt30, he said. 

Krungsri predicts that the baht will appreciate to Bt29.75 to the dollar in the second quarter of next year, and then up to Bt29.25 in the fourth quarter. 

The key reason for the weakening of the US dollar is that the Federal Reserve is expected to maintain its low-interest rate policy.  

The US has also been facing deficits in its budget and current account, contributing to a weaker dollar. The International Monetary Fund has projected that the US government will run a large budget deficit equivalent to 18.7 per cent of the GDP and a current account deficit at 2.1 per cent of the GDP this year. 

The baht was the strongest currency in the region last year, soaring 8.6 per cent before falling 8.63 per cent in the first quarter this year, the second weakest compared to the Indonesian rupiah, which fell 14.98 per cent.

However, in the fourth quarter of this year, as of November 24, the baht rose 4.12 per cent, second only to the Indonesian rupiah, which jumped 4.91 per cent. 

Apart from the currency, Thailand’s stock market has also been highly volatile this year. Thai stocks plunged in March when foreign investors made a net sell of about Bt80 billion due to panic over Covid-19.   

Foreign investors returned to the Thai stock market in November following news of a breakthrough in Covid-19 vaccines and Joe Biden’s win of the US presidency. Though foreign investors dumped Thai government bonds in March, they returned later in the year and purchased more in November. 

“In the first half of the year, investors were risk-off, but now they are risk-on,” said Tak, referring to investors’ appetite for exposure to risks.

In the first 11 months of 2020, foreign investors made a net sell of Thai stocks and bonds worth Bt260 billion and Bt48 billion, respectively.

Krungsri Research forecast that Thailand would have a current account surplus worth US$18.8 billion (Bt569 billion) next year, which is considered large even though it is lower than the surplus of $20.3 billion projected for this year. 

“The years of current account surplus [close to $40 billion in 2019] is making the baht stronger as capital inflow is larger than outflow,” Tak said. 

Thai bonds are also promising for investors as low inflation supports investment returns, given the low policy interest rate of 0.5 per cent, he said. 

Yields of 10-year bonds issued by the government is expected to be 1.1 per cent by the end of next year, up from 0.829 per cent at present. However, he said, US government bond yields are expected to be 1.55 per cent by the end of next year, up from 1.412 per cent currently. 

Tak forecast that the Bank of Thailand’s Monetary Policy Committee will leave the policy rate unchanged at 0.5 per cent next year.

He also believes that the Biden administration will ease the degree of trade protectionism to some extent, which will lessen the pressure on regional currencies, especially the Chinese yuan. 

In the first 11 months, the yuan rose 6 per cent against the dollar, which is unusual, Tak said. 

China’s economic growth has almost returned to pre-Covid level despite the appreciation of the yuan, so Thailand should learn from China and restructure industries to boost its competitiveness in the export market, Tak said. 

Krungsri Research has forecast 3.3 per cent growth for Thailand next year, up from the projection of 6.4 per cent contraction this year. Exports, a major growth engine, are expected to expand 4.5 per cent up from the projected 7.5 per cent contraction this year.

Tourist arrivals, however, will only be about 4 million next year, down from 6.7 million this year and 39.7 million last year. “We are worried about slow recovery in the tourism sector,” Tak said.

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SET gain outstripped by rise in other Asian markets (nationthailand.com)

SET gain outstripped by rise in other Asian markets

EconDec 01. 2020

By The Nation

The Stock Exchange of Thailand (SET) Index closed at 1,420.87 on Tuesday, up 12.56 points or 0.89 per cent. Total transactions amounted to Bt78 billion with an index high of 1,430.03 and a low of 1,416.39.

In the morning session, an analyst at Krungsri Securities predicted the day’s index would fluctuate between 1,400 and 1,420 despite the rise in other Asian indices.

“We expect the SET to face high volatility as investors delay trading to follow the Opec+ meeting and the Constitutional Court ruling in a case against Prime Minister General Prayut Chan-o-cha, as well as uncertainty over the Covid-19 pandemic,” he said.

The 10 stocks with the highest trade value today were KBANK, PTT, ADVANC, GPSC, SCB, PTTEP, AOT, JR, SCGP and CPALL.

As of 4.30pm, the price of oil rose by US$0.25 or 0.55 per cent to $45.59 per barrel, while gold rose by $13.30 or 0.75 per cent, to $1,794.20 per ounce.

Other Asian indices were on the rise:

Japan’s Nikkei Index closed at 26,787.54, up 353.92 points or 1.34 per cent.

China’s Shang Hai SE Composite Index closed at 3,451.94, up 60.18 points or 1.77 per cent, while the Shenzhen SE Component Index closed at 13,930.38, up 260.26 points or 1.90 per cent.

Hong Kong’s Hang Seng Index closed at 26,567.68, up 226.19 points or 0.86 per cent.

South Korea’s KOSPI Index closed at 2,634.25, up 42.91 points or 1.66 per cent.

Taiwan’s TAIEX Index closed at 13,885.67, up 162.78 points or 1.19 per cent.

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Long weekend this month pushes up hotel booking rates (nationthailand.com)

Long weekend this month pushes up hotel booking rates

EconDec 01. 2020

By The Nation

Hotel bookings in Thailand are riding a high for the upcoming long weekend, especially in Phuket, the World Hotel Index reported.

The index run by SiteMinder found that the rate of bookings in Thailand this week surpassed 59 per cent of the 2019 booking rate for the third time this year since March.

Since October, the booking rate of 14 hotels has increased by more than 77 per cent, especially those in Phuket which enjoyed the highest booking rate in 250 days.

The same phenomenon was seen during a four-day-long weekend in November.

A long weekend beginning with Constitution Day on December 10 has spurred a sudden increase in bookings among Thai tourists.

Over 17 per cent of the number of tourists in the coming months travel over the holidays. The number of hotel reservations tends to soar near the end of the weekend, the index reported.

“After the accommodation business in Thailand faced a difficult situation this year, we are glad to see Thai people support the tourism business during this four-day holiday,” said Brad Hines, regional vice president of Asia Pacific at SiteMinder.

“With the measure to restrict foreigners’ entry into Thailand still on, this is a great opportunity for Thais to travel within the country and experience the beauty of Thailand before foreign tourists gradually travel to Thailand again,” he said.

The increase in hotel reservation rates in Thailand is also in line with hotel reservation rates in other Asian countries.

In Taiwan, the rate of bookings increased by more than 20 per cent from the previous month. The Philippines was up 33 per cent from the previous month, and Vietnam was up 63 per cent from the previous month, according to World Hotel Index.