The Stock Exchange of Thailand (SET) Index rose by 2.78 points, or 0.21 per cent, to 1,329.83 in the morning session on Monday (August 17).
However, a stock analyst at Krungsri Securities expected the index to fall to 1,320 due to lack of positive sentiments to boost investment.
“Besides, the index would be under pressure from uncertainty over the $1-trillion US economic stimulus package and postponement of US-China trade talks last week,” he said.
The SET Index closed at 1,327.05 on Friday (August 14), down 19.64 points or 1.46 per cent. Total transactions amounted to Bt58.050 billion with an index high of 1,347.63 and a low of 1,324.97.
He recommended that investors buy:
▪︎Energy stocks that benefit from rising crude oil price, such as PTTEP, PTTGC, TOP and IVL.
▪︎ Retail stocks that benefit from the Centre for Covid-19 Situation Administration’s sixth phase of lockdown easing, such as CRC, CPN HMPRO, GLOBAL, COM7 and DOHOME.
The performance of airlines listed in the Stock Exchange of Thailand crashed due to travel restrictions imposed to prevent the spread of Covid-19 as well as intensified competition in the second quarter, experts said.
Chansin Treenuchagron, Thai Airways International (THAI) acting president, explained that in the second quarter of this year, the company lost Bt5.339 billion, down from Bt6.883 billion in the same period of the previous year.
“Revenue totalled Bt2.492 billion, down 94.1 per cent from Bt40.017 billion in the same period of the previous year, while expenses amounted to Bt16.193 billion, down 67.4 per cent due to temporary flight suspension and decline in personnel expenses as a result of cost reduction measures,” he said.
“In the first six months this year, the company lost Bt28.016 billion, up 355 per cent from Bt6.438 billion in the same period of the previous year.”
He said as of June 30, THAI had circulating liabilities higher than circulating assets of Bt262.244 billion, while the capital deficit was Bt18.228 billion, adding that the airline has been suffering losses since 2013.
“Therefore, the company is currently preparing a rehabilitation plan to propose to debtors,” he said.
He said in the second quarter of this year, the Covid-19 pandemic had severely impacted the global aviation industry, while passengers temporarily cancelled flights.
“The company organised only cargo and charter flights during the second quarter, causing the volume of available seat kilometres and passenger transport to drop by 96.5 per cent and 99.5 per cent, respectively,” he said.
“The passenger ratio was 10.3 per cent, down from 74.7 per cent in the same period of the previous year, while the number of passengers was 0.08 million people, down 98.6 per cent year on year.”
Nok Air’s net loss in the first quarter this year was Bt2.330 billion, up from Bt304.15 million in the same period of the previous year.
As of March 31 this year, the company and its subsidiaries’ assets were worth Bt31.148 billion, while liabilities totalled Bt36.286 billion, up 94.68 per cent from December 31, 2019 due to recognition of Bt16.532 billion lease liabilities after using the International Financial Reporting Standards 16.
Asia Aviation (AAV)’s net loss in the second quarter was Bt1.141 billion, up from Bt482.47 million in the same period of the previous year.
In the first six months this year, the company’s net loss was Bt1.812 billion, against the Bt14.72 million net profit it made in the same period of the previous year.
As of June 30 this year, the company’s liabilities were Bt52.118 billion, up Bt16.904 billion, or 48 per cent.
Although Bangkok Airways has not announce its performance, an analyst at Capital Nomura Securities expected the company to lose approximately Bt1.581 billion, up both year on year and quarter on quarter.
Investors have been advised to keep an eye on external factors, especially US-China trade negotiations as it could affect the Stock Exchange of Thailand (SET) Index and the price of gold next week.
The SET Index on Friday closed at 1,327.05, down 19.64 points or 1.46 per cent, while total transactions amounted to Bt58.050 billion.
A stock analyst at Phillip Securities (Thailand) expected the index next week to fluctuate sideways down between 1,300 and 1,370 due to numerous negative sentiments, especially US-China trade negotiations.
“Meanwhile, we expect Thailand’s second-quarter gross domestic product to contract,” the analyst said.
The price of gold on Friday stood at US$1,948.22 per ounce, while the price in Thailand on Saturday was Bt28,600 per baht weight.
A gold analyst at YLG Bullion International advised investors to follow the US-China trade negotiations, as it would have an impact on the metal’s price.
“Investors must keep an eye on the resistance line between $1,967 and $1,971 per ounce. If the price does not rise over this line, investors can gradually sell some gold when the price goes up,” the analyst said.
“Meanwhile, if the price does not drop below the support level between $1,898 and $1,919 per ounce, investors can buy gold for speculation in the short term as it would rebound again for a while.”
The Bank for Agriculture and Agricultural Cooperatives (BAAC) has launched two new loan programmes with a total budget of around Bt70 billion to promote good farming practices.
The “New Gen Hug Ban Kerd” (new generation’s love for homeland) scheme has a budget of Bt60 billion to help those who wish to invest in new technology in smart farming, while the “Sufficiency Economy Loan”, with a budget of Bt10 billion, aims to provide a rotating fund for farmers who follow the principles of sufficiency economy or those who are going into farming as a source of additional income.
“The New Gen Hug Ban Kerd loan will charge interest at 4 per cent per year in the first three years with three months grace period. After three years the interest will be at minimum retail rate [MRR] or 6.5 per cent annually,” said the bank’s assistant manager Somkiat Kimaoha.
“Meanwhile, the Sufficiency Economy Loan will be limited to a maximum Bt50,000 per person with MRR interest rate or 6.5 per cent annually after three months grace period.
To promote social distancing practices during the Covid-19 outbreak, interested persons can apply for either loan via the bank’s official Line account “BAAC Family” by scanning the QR code or searching for ID @baacfamily, Somkiat said.
“The application is open now until June 30, 2021. A person can apply for only one type of loan,” he added.
For more information, contact BAAC Call Centre at 02 555 0555.
By Syndication Washington Post, Bloomberg · Vildana Hajric, Claire Ballentine · BUSINESS, US-GLOBAL-MARKETS U.S. stocks closed mixed after reports showed the economic recovery slowed and stimulus talks reached a stalemate. Treasury debt yields fell for the time this week.
The S&P 500 fell less than 0.1% after fluctuating near all-time highs for much of the day, with utilities and health care leading the declines and energy shares finishing higher. The Dow Jones industrial average edged 0.1% higher in the last moments of trading and the Nasdaq Composite ended in the red. Trading volume was about 10% below the 30-day average. The dollar weakened after the value of retail purchases increased 1.2% from the prior month and a separate report showed consumer sentiment remained weak.
“The service sector is trying to recover, but it is nowhere near pre-COVID levels,” said David Wagner, a portfolio manager at Aptus Capital Advisors. “The U.S. economy is continuing to heal, but in an uneven fashion based on some of the recent economic data. All eyes remain on D.C. for a resolution on the fiscal stimulus situation.”
The Stoxx Europe 600 Index sank after Britain added France, the Netherlands and Malta to its list of countries from which people arriving have to quarantine for 14 days.
Gold edged lower following two days of gains, while oil posted a second weekly advance.
Traders continue to bank on further fiscal stimulus to help the nascent recovery even as negotiations over a new coronavirus relief plan remain at a standstill.
“It appears the hopes of a fiscal stimulus deal being reached in August have gone from slim to none over the past few days — but investors are still assuming that a $1.5 trillion package will come in September,” said Yousef Abbasi’s, global market strategist at StoneX. “It does appear that the executive orders signed by President Donald Trump last weekend have given Congress an excuse to pack it in for August with hopes that a fiscal stimulus deal will be sorted in September.”
On the virus front, Joe Biden said U.S. governors should require masks for the next three months, while New Zealand recorded 12 new confirmed local cases of the coronavirus. Germany added the most new cases since May, while the head of the French Health Agency Jerome Salomon said the situation in his country is worsening.
These are the main moves in markets:
Stocks
The S&P 500 Index was little changed at 3,372.85 as of 4:06 p.m. EDT.
The Dow Jones industrial average increased 0.1% to 27,931.02.
The Nasdaq Composite Index declined 0.2% to 11,019.30.
The MSCI All-Country World Index fell 0.3% to 569.30, the biggest fall in a week.
Currencies
The Bloomberg Dollar Spot Index decreased 0.2% to 1,174.34, the lowest in more than a week on the largest dip in more than a week.
The euro climbed 0.2% to $1.1839, the strongest in more than a week.
The Japanese yen strengthened 0.3% to 106.60 per dollar, the first advance in more than a week and the largest climb in more than two weeks.
Bonds
The yield on 10-year Treasurys dipped one basis point to 0.71%, the first retreat in more than a week.
The yield on 30-year Treasurys gained two basis points to 1.45%, hitting the highest in more than seven weeks with its sixth straight advance.
Germany’s 10-year yield decreased one basis point to -0.42%.
Commodities
West Texas Intermediate crude dipped 0.2% to $42.16 a barrel.
By The Washington Post · Abha Bhattarai · BUSINESS, US-GLOBAL-MARKETS Retail sales grew a disappointing 1.2 percent in July, following two months of sharp gains, raising worries about a renewed wave of economic pain as enhanced unemployment benefits expire for millions of Americans.
Consumers pulled back on big-ticket items like cars, building materials and sporting goods in July, but spent more on food, gasoline, and health and beauty products, according to numbers released Friday by the U.S. Commerce Department. Spending increases were generally modest, with one exception: Electronics and appliance stores grew 23 percent from June as families stocked up on laptops, headphones and webcams to prepare for a virtual start to the school year in many parts of the country.
“Gains were extremely uneven,” Diane Swonk, chief economist at Grant Thornton, wrote in a note to clients. “Retail sales showed signs of slowing in July, which underscores our concern that the rebound is losing momentum.”
Overall consumer spending inched up to $536 billion, from $529.4 billion in June.
The uptick follows two months of surprise growth – retail sales surged a record 18.2. percent in May, and 8.4 percent in June – after steep drop-offs the previous two months. Retail sales fell 8.3 percent in March, and 14.7 percent in April.
The pandemic has plunged the nation into the worst economic crisis since the Great Depression. And though there are signs the wealthy have recovered, economists say it probably will take years for the rebound to reach most Americans. More than 30 million people are collecting unemployment benefits, with Black and Hispanic families among those who have been hardest-hit by the crisis.
A federal boost to unemployment benefits, which provided an additional $600 a week to jobless Americans, expired at the end of July, leaving millions of households struggling to make ends meet. Lawmakers have yet to agree on what the next stimulus package would include, or when it might take effect. Meanwhile, more than 100,000 small businesses have already permanently closed, and many others have furloughed or layoffs huge swaths of their workforce.
“While households are spending, they are anxious about their health and economic well-being, so they are being pragmatic,” said Jack Kleinhenz, chief economist for the National Retail Federation, an industry trade group. “We have to remember that there’s uncertainty about economic policy and that the resurgence of the virus is putting pressure on the fledgling recovery.”
More than 5.2 million cases have been recorded since the coronavirus swept the United States. Some 164,000 Americans have died, including nearly 1,500 Wednesday – the largest single-day count since mid-May.
Analysts say consumer spending patterns have shifted during the pandemic, as more shoppers buy online and rethink their purchases of discretionary goods like apparel, handbags and jewelry. At least a dozen major retailers – most of them mall-based chains or department stores – have filed for bankruptcy since April. Grocery stores, meanwhile, are doing brisk business as Americans increasingly do their dining at home.
The rise in electronics and appliance sales in July, analyst said, is part of a broader shift toward at-home learning. Parents are cutting back on the purchases of backpacks, uniforms and school supplies, but are spending more on computers, printers and other technology for online classes. Back-to-school technology sales are expected to grow 28 percent this year, even as overall spending remains flat, according to Deloitte.
Apparel retailers, which typically get a big boost from the back-to-school surge, have seen demand drop off in many parts of the country, as parents hold off on buying new clothes and shoes for their children.
“Where shoppers elected to spend their money remains very uneven,” said Neil Saunders, managing director of GlobalData Retail. “While online apparel is performing very well, visits to clothing shops, especially those located in malls, are extremely suppressed. Impulse buys are down and spending on certain categories, like workwear, has all but been wiped out.”
Spending at apparel stores, which rose 5.7 percent in July, are still down 21 percent from a year ago. Sales at department stores, meanwhile, are dropped 13 percent from last year, while spending at restaurants has fallen 19 percent.
Vehicle sales, which surged earlier in the summer as Americans bought used cars, dipped 1.2 percent in July. Furniture sales remained flat from June, while spending at building materials and garden stores fell 2.9 percent and dropped 5 percent at sporting goods and hobby stores.
The coming months will be crucial for retailers, analysts say, as they try to make up lost ground during the back-to-school and holiday shopping seasons, which are typically the two largest sales periods of the year.
“A lot is up in the air right now – is school going to be virtual, is it physical, is it a hybrid of the two?,” said Marie Driscoll, a managing director at Coresight Research, a retail advisory firm that is predicting that back-to-school sales will slump by as much as 11 percent this year. “Not knowing the answers to those questions makes it hard for both consumers and retailers.”
