The Cabinet has agreed to let the Finance Minister borrow an additional Bt214 billion in the 2020 fiscal year to address possible revenue shortfall, the Public Debt Management Office’s director general Patricia Mongkhonvanit said.
As part of the Cabinet approval, the debt management office will borrow Bt50 billion by issuing savings bonds this month for the general public.
She added that the borrowing will have a slight effect on the public debt ratio, which currently stands at around 45.83 per cent of the gross domestic product (GDP). It is expected to surge to between 51 and 52 per cent of the GDP by the end of this fiscal year.
The country’s planned total expenditure for the 2020 fiscal year is Bt3.2 trillion and the ministry had previously borrowed Bt469 billion to finance its budget deficits.
Investors began selling off shares when two Thai returnees tested positive for Covid-19 after completing their 14-day quarantine, causing the Stock Exchange of Thailand (SET) Index to fall by 8.99 points or 0.69 per cent to 1,299.68 at 1pm today (August 20).
As of yesterday, Thailand had been free of domestic Covid-19 cases for 87 days.
Stocks that suffered the highest sell-offs were in the tourism sector, such as hotels, restaurants and hospitals.
Therdsak Thaveeteeratham, executive vice president for research at Asia Plus Securities, said SET risked falling below 1,300 in the short term due to the Covid-19 situation in Thailand, adding that the index will fall to the next support line at 1,280 if the situation worsens.
“Investors sold stocks in response to the new domestic Covid-19 cases that caused uncertainty over whether the situation will worsen,” he said.
However, he said he expects SET to move in line with the Covid-19 situation, adding that the index will rebound to resistance line at 1,330 if the government is able to contain the spread of the disease.
“We advise investors to avoid buying shares affected by the Covid-19 pandemic, such as tourism, service and retail as their price will be pressured by mass sell-offs.
“Meanwhile, we recommend investing in shares that have good fundamentals, pay high dividends and are able to escape the Covid-19 fallout, such as rubber gloves and disease control products,” he said.
Koraphat Vorachet, director of research and investment at Capital Nomura Securities, said the discovery of new Covid-19 cases caused volatility in the stock market, adding that he expects SET to move between 1,270 and 1,300.
“Investors will be panicking because Thailand has been free from Covid-19 for a long time, so we have to follow the situation closely,” he said, adding that this negative sentiment will affect hotels, airlines, airports, restaurants and theatre stocks, though stocks for rubber glove manufacturers and beverages will benefit.
“Investors should be careful at this time because mass sell-offs can occur at any time due to high SET valuation,” he said.
“We advise investors to hold a small proportion of shares or wait to buy stocks when the index falls to 1,250 points.”
He added that the stocks that will escape the abovementioned risks are food export and electronic parts, as well as stocks that pay high dividends.
The Stock Exchange of Thailand (SET) Index fell by 6.49 points, or 0.50 per cent, to 1,302.18 in the morning session today (August 20).
A stock analyst at Krungsri Securities expected the index to fall between 1,300 and 1,305 points after the US Federal Reserve predicted US economic uncertainty amid the Covid-19 fallout and said it was imperative that a new economic stimulus package was rolled out.
“Besides this, the index will come under pressure from two new domestic Covid-19 cases in Thailand yesterday,” he said.
He recommended that investors buy:
> Stocks that benefit from a weakening baht, such as CPF, GFPT, TU, KCE, Hana and Delta.
> Domestic play stocks, such as Advanc, Intuch, HMPro, Global, Dohome and Com7.
The SET Index closed at 1,308.67 yesterday, down 21.44 points, or 1.61 per cent, while total transactions amounted to Bt57.28 billion, with an index high of 1,332.79 points and a low of 1,301.97.
The price of gold dropped by Bt500 per baht weight in morning trade today (August 20), the Gold Traders Association reported.
As of 9.27am, the buying price of a gold bar was Bt28,750 per baht weight and selling price Bt 28,850, while gold ornaments cost Bt28,227.92 and Bt29,350, respectively.
At close yesterday, the buying price of a gold bar was Bt29,250 per baht weight and selling price Bt29,350, while gold ornaments cost Bt28,728.20 and Bt29,850, respectively.
The Chinese Gold and Silver Exchange Society reported that the Hong Kong gold price dropped by HK$460, opening at HK$17,940 (Bt72,664.23) per tael this morning.
The Comex (Commodity Exchange) gold price to be delivered in December dropped by US$42.8, or 2.13 per cent, to $1,970.3 (Bt61,848.39) per ounce at yesterday’s close.
The gold price moved into negative territory yesterday due to a strengthening dollar and mass sell-offs of the precious metal.
The new committee tasked with steering the economy through the virus crisis got off to a fast start on Wednesday, announcing measures to boost tourism and create 1 million jobs.
Set up following the Cabinet reshuffle earlier this month, the panel’s first meeting was chaired by Prime Minister Prayut Chan-o-cha and attended by economics ministers and experts.
They agreed to increase subsidies for local tourists and make jobs available for 400,000 new graduates, said Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow, after Wednesday’s meeting.
The government plans to boost local tourism by expanding its 40 per cent subsidy for accommodation costs from five to 10 nights. The government launched the tourism subsidies in mid-July, but so far only 660,000 of the available 5 million subsidised nights have been booked. Travellers will also see their Bt1,000 discount on air tickets boosted to Bt2,000, he said. Meanwhile large corporates will be invited to make use of the subsidies by organising seminar or training in other parts of the country. The measures will be submitted to the Cabinet for approval on August 25.
The Labour Ministry will also propose measures aimed at creating 1 million jobs in the near future to combat growing unemployment. The government has prioritised finding another 400,000 jobs for graduates by funding companies to hire and retain workers, he said. The jobs will be available at private companies and government agencies, he said.
The government will also launch other job creating projects funded by the Bt400-billion economic stimulus package.
The unemployment rate in the second quarter rose 1.95 per cent to 745,000 people, according to the National Economic and Social Development Council (NESDC). The NESDC is also worried about significant further job losses as 1.7 million workers are currently furloughed. The state think-tank forecast the economy will shrink 7.5 per cent this year following a plunge of 12.2 per cent in the second quarter.
Supattanapong said the government aims to shore up the economy and keep the contraction lower than projected.
Meanwhile, Bank of Thailand governor Veerathai Santiprabhob said more small and medium-sized enterprises will apply for loans under the Bt500-billion soft loans scheme. Launched by the central bank in April, the scheme has attracted fewer than expected borrowers due to strict loan conditions. The government on Tuesday relaxed the conditions by tasking the state run-Thai Credit Guarantee Corporation to guarantee loans, which will encourage commercial banks to lend more.
Executives of large SET-listed companies are now buying back shares after the market suffered a correction from the Covid-19 pandemic, according to one expert.
Several executives have bought back shares after the SET fell to around the 1,300 mark this week.
According to the latest report on executives’ securities and derivatives trade, the number of transactions increased by 32. Most of that increase came from executives buying back shares under their control on August 17-18 when the SET fell to 1,315 from 1,350 last week.
Leading the way was Jay Mart (JMART) executive Ekachai Sukhumvitaya, who bought back 1.8 million shares at an average Bt13.38 and 1 million shares at Bt13.27, totalling Bt37 million.
Meanwhile, six executives at Sri Trang Gloves (Thailand) (STGT) – Oralak Nakin, Jarinya Jirojkul, Kitichai Sincharoenkul, Vitanath Sincharoenkul, Sarana Boonbaichaiyapruck and Anan Pruksanusak – bought back 130,000 shares at an average Bt67 per share, totalling Bt8.7 million.
Chone Sophonpanich, a Bangkok Life Assurance (BLA) executive, bought back 68,900 shares at Bt15.40 per share, accounting for Bt1.06 million, while Yuth Chinsupakul, Eastern Power Group (EP) executive, bought back 1.09 million shares at Bt4.09, totalling Bt4.5 million.
Following the market correction from the end of July to the start of August, Minor International (MINT) executives William Heinecke and Niti Osathanugrah bought back 17.32 million shares at an average Bt17.50, and worth Bt303 million.
However, Heinecke also sold 350,000 shares at Bt20.50 per share, amounting to Bt7.1 million.
Meanwhile, Asia Plus Group Holdings (ASP)’s Kongkiat Opaswongkarn bought back 4 million shares at Bt1.8 per share, totalling Bt7.2 million.
Nuttachart Mekmasin, a research analyst at Trinity Securities, said market conditions weren’t the only reason behind the buybacks by directors.
“The index may rise or drop from the 1,300 support line in the third quarter, and could fall below 1,300 in the fourth quarter given multiple risks,” he said.
He predicted the index would slide in Q3 due to lack of positive sentiments, but would not fall below 1,260 given the uptick rule, debt payment moratoriums and liquidity injections.
“However, we expect the index to fall below 1,300 after the abovementioned measures expire, while it could also come under pressure if the trade war escalates after the US presidential election in November,” he said.
By Syndication Washington Post, Bloomberg · Rita Nazareth, Claire Ballentine · BUSINESS, US-GLOBAL-MARKETS
Stocks extended gains after closing at a record for the first time since the pandemic started amid a rebound in giant technology companies. Treasuries advanced.
The S&P 500 rose as investors assessed earnings from retailers and the latest on stimulus talks ahead of the Federal Reserve’s meeting minutes. Apple reached a $2 trillion market valuation for the first time after an almost 60% surge this year. Target rallied as revenue trounced analysts’ projections, brushing off concerns that demand would ebb after consumers spent their relief checks. Lowe’s gained on a strong summer sales pace that beat estimates. Momenta Pharmaceuticals soared as Johnson & Johnson agreed to acquire the company for about $6.5 billion.
A buying stampede drove American stocks up more than 50% from this year’s lows, with the S&P 500 completing its fastest-ever return to a record after a plunge of at least 20%. A drop in New York City’s positive Covid-19 test rate to the lowest since the pandemic began and signs the outbreak is easing in Sunbelt states also bolstered optimism. Meanwhile, high-frequency economic indicators and corporate earnings have improved amid ultra-easy monetary policy and massive stimulus measures.
“The Fed’s largesse means that there are trillions of dollars of excess liquidity sloshing around seeking greater returns than the near zero or even negative rates offered by fixed income,” wrote Win Thin, global head of currency strategy at Brown Brothers Harriman & Co. in New York. “Much of that is going into equities.”
Democratic and Republican leaders are hinting that they are looking for a path toward reviving stalled negotiations on the next round of pandemic relief for the U.S. economy, even as both sides remain far from any deal. The Trump administration sees a possibility for both partis to agree on a smaller round of pandemic relief totaling $500 billion that would omit the biggest areas of disagreement, a senior U.S. official said on Tuesday night.
“The wall of cash really buoying the risk appetite of investors has successfully lifted the market past where it was prior to the outbreak of Covid,” Todd Jablonski, chief investment officer at Principal Global Asset Allocation. “That’s a testament to what you’ve seen in terms of policy response, but it by no means means that we’re in the clear.”
Boosted by the S&P 500’s surge to a record on Tuesday, the market cap of global equities is at an all-time high of $89.7 trillion. Risk assets have rallied since March as unprecedented stimulus measures and gains in technology stocks have outweighed concerns about U.S.-China trade tensions and rising coronavirus cases.
Stocks:
– The S&P 500 rose 0.2% as of 11:24 a.m. New York time.
– The Stoxx Europe 600 Index advanced 0.4%.
– The MSCI Asia Pacific Index was little changed.
Currencies:
– The Bloomberg Dollar Spot Index decreased 0.1%.
– The euro increased 0.1% to $1.1944.
– The Japanese yen was little changed at 105.42 per dollar.
Bonds:
– The yield on 10-year Treasuries dipped one basis point to 0.65%.
– Germany’s 10-year yield decreased one basis point to -0.47%.
– Britain’s 10-year yield fell less than one basis point to 0.217%.
Commodities:
– The Bloomberg Commodity Index was little changed.
– West Texas Intermediate crude dipped 0.6% to $42.63 a barrel.
The Stock Exchange of Thailand (SET) Index closed at 1,308.67 today (August 19), down 21.44 points or 1.61 per cent, while total transactions tallied at Bt57.283 billion with an index high of 1,332.79 and a low of 1,301.97.
During the morning session, a stock analyst at Krungsri Securities said he expected the index to fluctuate between 1,320 and 1,340 points due to a lack of positive investment sentiment.
“Besides, uncertainty in relation to US-China tensions after Washington announced further restrictions on the Chinese phone brand Huawei, and a delay in the rolling out of the $1-trillion economic stimulus in the US will pressure the index,” he said.
The top 10 stocks with the highest trade value today were STGT, CPALL, PTT, MINT, KBANK, AOT, BDMS, ADVANC, SCB and KCE.
As of 4.30pm, the price of crude oil fell by US$0.28 or 0.65 per cent to $42.61 per barrel, while gold fell by $10.30 or 0.51 per cent, to $2,002.80 per ounce.
Other Asian indices were mixed:
Japan’s Nikkei Index closed at 23,110.61, up 59.53 points or 0.26 per cent.
China’s Shanghai SE Composite Index closed at 3,408.13, down 42.96 points or 1.24 per cent, while Shenzhen SE Component Index closed at 13,480.85, down 287.31 points or 2.09 per cent.
Hong Kong’s Hang Seng Index closed at 25,178.91, down 188.47 points or 0.74 per cent.
South Korea’s KOSPI Index closed at 2,360.54, up 12.30 points or 0.52 per cent.
Taiwan’s TAIEX Index closed at 12,778.64, down 93.50 points or 0.73 per cent.
The bank index rose sharply yesterday (August 18) on hopes that the Bank of Thailand (BOT) will allow banks to pay dividends if October stress test shows their capital is above the minimum requirement of 12 per cent.
The Stock Exchange of Thailand (SET) Index closed at 1,330.11 yesterday, up 9.20 points, or 0.70 per cent, while the bank index rose by 4.09 points, or 1.49 per cent, to 279.43.
Tisco Financial Group’s share price rose by Bt1.75, or 2.62 per cent, to Bt68.50 per share, with transactions totalling Bt766.19 million.
Bangkok Bank’s price increased by Bt2, or 1.90 per cent, to Bt107.00 per share, with transactions amounting to Bt541.19 million.
Kasikorn Bank rose by Bt1.50, or 1.71 per cent, to Bt89.25 per share, with transactions totalling Bt1.71 billion.
Siam Commercial Bank increased by Bt1, or 1.38 per cent, to Bt73.25 per share, with transactions amounting to Bt771.51 million.
Krungthai Bank (KTB) rose by Bt0.10, or 1.02 per cent, to Bt9.90 per share. Transactions totalled Bt208.64 million.
TMB Bank was up by Bt0.01, or 1.03 per cent, to Bt0.98 per share, with transactions amounting to Bt190.75 million.
Kiatnakin Bank (KKP) rose by Bt0.75, or 1.89 per cent, to Bt40.50 per share. Transactions totalled Bt122.16 million.
According to a KTB Securities (KTBST) analysis, banks will pay dividends this year at the lowest payout ratio as their capital was currently 17-22 per cent.
“Comparing banks’ dividend yield based on the lowest dividend payout ratio, small banks have a dividend yield that is more than large banks,” the analysis said. “KKP and Tisco have a dividend yield at 6 per cent and 5 per cent, respectively, while KTB is the only large bank that has the highest dividend yield at 5 per cent.”
KTBST weighted investment in bank shares as same as the market, advising investors to buy BBL at a target price of Bt120 per share as this bank has the lowest risks from setting up allowances for doubtful debts and the highest coverage ratio at 171 per cent to deal with risks in the future.
According to a Capital Nomura Securities’ analysis, the average commercial bank’s capital in June was 19.2 per cent, higher than BOT’s minimum requirement of 12 per cent despite the Covid-19 fallout.
“Considering each bank’s capital at the end of the first quarter this year, KKP and SCB have the lowest at 17.2 per cent, while Tisco has the highest at 20.7 per cent,” the analysis said.
“Banks’ capital is currently strong, especially large banks that are able to handle losses from Bt72 billion to Bt130 billion, so they will be able to pay dividend,” it added.
However, the securities company still weighted investment in bank shares as same as the market, advising investors to buy BBL and Tisco at a target price of Bt120 and Bt80 per share, respectively.
Youpik expands network by partnering up with auto dealer
Aug 18. 2020
By The Nation
Youpik, an e-commerce platform, is expanding its network by partnering with V Group Cars to help Thai consumers with social-media savvy to cash in by promoting and sharing information about the cars they like.
This is the first time for Youpik to collaborate with a partner in the automotive industry, but is in line with new trends as more brands and products shift their focus to online channels.
Pitchanun Wittayanont, a co-founder of Youpik, said: “Youpik is committed to building a fun and unique platform in the Thai market. We believe in the power of sharing on social media. Since our launch, Youpik has been expanding its partnership with a variety of businesses, so we can offer a variety of products to our customers.”
Buyers on Youpik application get a chance to receive cashback on every item purchased, plus commission when friends purchase items using links shared by “Youpikkers”.
