Energy Minister Sontirat Sontijirawong said the committee also cut the contribution of B20 diesel to the fund by 25 satang per litre.

But it raised the contribution of E85 gasahol by 25 satang per litre.

The resolution is aimed at helping ease the cost of living amid the dire Covid-19 situation, the minister said.

Transactions amounted to Bt59.677 billion, with an index high of 1,065.67 and a low of 1,022.83.

The SET pushed the circuit breaker yet again this month to halt trading for 30 minutes – from 3.25pm to 3.55pm – after the index dropped lower than 8 per cent.

A stock analyst at AIRA Securities expected the SET Index to fluctuate on the downside, while forecasting a support level from 1,100 points to 1,070 and a resistance level from 1,165 to 1,185.

“The market experienced negative sentiment from a decline in global stock markets after the number of confirmed Covid-19 cases in the US increased to 38,200, up 5,681 cases, or 20.9 per cent, causing worries of a global economic recession,” the stock analyst said.

The analyst said the market would gain positive sentiment from central banks in a number of countries relaxing monetary policy and issuing measures to deal with the Covid-19 impact.

“We expected that the market had already responded to this positive sentiment, but it would limit the recovery in banking stocks,” he said.

The analyst expected the Bangkok Metropolitan Administration’s move to close department stores and markets in the capital and ask the private sector to allow employees to work from home would cause short-term negative sentiment on department store and electric train stocks, while it would benefit retail stocks.

As of 4.49pm, global stocks were having a tendency to move downside.

The price of crude oil dropped by US$0.22, or 0.97 per cent, to $22.41 per barrel (Bt730.32), while the gold price rose by $10.50, or 0.71 per cent, to $1,495.10 per ounce.

The top ten stocks with the highest trade values today were BAM, PTT, CPAll, Gulf, AOT, Advanc, PTTEP, GPSC, KBank, and SCC.

Elsewhere in Asia, Japan’s Nikkei closed at 16,887.78, up 334.95 points, or 2.02 per cent.

China’s Shanghai SE Composite Index ended the day at 2,660.17, down 85.45 points, or 3.11 per cent, while the Shenzhen SE Component Index closed at 9,691.53, down 458.59 points, or 4.52 per cent.

Hong Kong’s Hang Seng ended at 21,696.13, down 1,108.94 points, or 4.86 per cent.

South Korea’s Kospi Index closed at 1,482.46, down 83.69 points, or 5.34 per cent.

Taiwan’s TaiEx ended at 8,890.03, down 344.06 points, or 3.73 per cent.

As of 4.11pm, buying price of a gold bar stood at Bt23,200 per baht weight and selling price Bt23,300, while gold ornament was Bt22,785.48 per baht weight to buy with selling price at Bt23,800.

Prices increased from the morning trade where a gold bar cost Bt23,150/baht to buy and Bt23,250 to sell and gold ornament cost Bt22,750/baht to buy and Bt23,750 to sell as investors turned to the precious metal amid economic uncertainties.

As of 4.49pm, Gold contracts in COMEX futures to be delivered in April rose by US$10.50 or 0.71 per cent to $1,495.10 per ounce.

West Texas Intermediate (WTI) and Brent crude prices dropped. The weekly WTI crude oil price dropped sharply since 1991, when the Gulf War took place, as many governments worldwide shut cities to tackle the Covid-19 virus.

Earlier, Opec and its partners led by Russia failed to come to an agreement on cutting production, causing market uncertainty amid rising crude oil volumes, while Saudi Arabia said it was prepared to increase its production capacity to a record high of 12.3 million barrels per day and increase exports.

The US planned to send Energy Department officials to Saudi Arabia to cooperate on stabilising the oil market. In addition, officials from the US state of Texas have consulted with the Opec secretary-general on the possibility of reducing oil production.

Benzene fuel prices rose more than those of Dubai crude after benzene sales increased due to low prices. The weekly benzene fuel volume in Singapore ending on March 18 dropped by 2.94 per cent.

Diesel prices rose more than those of Dubai crude after China increased imports for April due to rising diesel fuel demand in the country.

As of 9.29am, the buying price of a bar of gold was Bt23,150 per baht weight and the selling price was Bt23,250, while gold ornaments cost Bt22,750 per baht weight to buy and Bt23,750 to sell.

Prices increased from Saturday’s close, when a gold bar cost Bt23,100 to buy and Bt23,200 to sell, while gold ornaments cost Bt22,679.36 and Bt23,700, respectively.

Gold prices on the Gold Spot Index this morning moved to US$1,493 (Bt48,655.80) per ounce after the price increased by $5.3 to $1,484.6 per ounce at Friday’s close due to investors turning to buy the metal as a safe haven asset amid uncertainty following the economic impact from Covid-19, which hammered the US stock index and led to the dollar falling sharply.

Meanwhile, the price in the Hong Kong gold market dropped by HK$120 to $13,860 (Bt58,221) per tael.

The SET nearly used the circuit breaker after the index opened trading and fell almost 8 per cent due to the sharp increase in the number of confirmed Covid-19 cases in the US, causing uncertainty following the global economic recession.

A stock analyst at AIRA Securities expected the SET Index to fluctuate on the downside, while forecasting the support level from 1,100 to 1,070 and resistance level from 1,165 to 1,185.

“The market gained negative sentiment from the decline in global stock markets after the number of confirmed Covid-19 cases in the US increased to 38,200, up 5,681 cases or 20.9 per cent, causing worries of a global economic recession,” the stock analyst said.

The analyst said that the market would gain positive sentiment from central banks in many countries relaxing monetary policy and issuing measures to deal with the Covid-19 impact.

“The Bank of Thailand March 20 cut the policy rate by 0.25 of a percentage point to 0.75 per cent from the previous 1.00 per cent,” the stock analyst said.

“We expected that the market had already responded to this positive sentiment, but it would limit the recovery in banking stocks.”

The analyst expected that the Bangkok Metropolitan Administration (BMA)’s move to close department stores and markets in the capital, as well as asking the private sector to allow employees to work from home would cause a short-term negative sentiment on department store and electric train stocks, while it would benefit retail stocks.

“The government’s move to issue measures to mitigate the impact may pressure the Thai economy in the short to medium term, but the market has a chance to recover in the short term,” the stock analyst said.

The analyst advised investors to follow the oil price war between Saudi Arabia and Russia closely after the US signalled it would intervene in the matter.

“We expect that this factor would cause fluctuation in crude oil price during this period, resulting in volatility in energy stocks and the Thai stock market,” the stock analyst said.

“Also, we suggest following the Covid-19 situation in Thailand after the number of confirmed cases rose sharply in the previous week, expecting to pressure the country’s economy and the market in the next period.”

The analyst recommended medium and long term investors who are able to take high risks to gradually buy value stocks that have high competitiveness, pay dividends continuously and whose price has dropped below reasonable price.

The BOT will allow banks to borrow money from it should investors make panic sales of investment units in bond mutual funds, BOT Governor Veerathai Santiprabhob said on Sunday.

Veerathai, senior officials from the Finance Ministry and representatives from financial markets held an emergency press conference on Sunday (March 22) to announce measures to support the bond market, which is suffering from a potential liquidity crunch as investors want to hold cash amid the uncertainty fuelled by the virus fears.

Virathai said that commercial banks could use investment grade bonds as collateral for borrowing money from the central bank’s lending facility, worth over Bt1 trillion.

Investment in money market funds and daily fixed-income funds is estimated to be over Bt1.6 trillion while the market liquidity has become thin as investors worry about the severe impact of the Covid-19 outbreak.

Banks that also own investment management companies, managing mutual funds, are ready to buy investment units from their subsidiaries when investors sell investment units back to the fund managers, Predee Daochai, president of the Thai Bankers’ Association said.

Veerathai said the central bank will coordinate with commercial banks, Government Savings Bank, insurance companies and Government Pension Fund to create a bridging fund of between Bt70 to Bt100 billion. The bridging fund will provide short-term lending for up to 270 days for those companies that had previously issued corporate bonds and could not adequately redeem it when the bonds reached maturity. Usually, bond issuers do not find a problem as they roll-over their bonds when corporate bonds reach maturity, but the current market has become thin, due to virus fears, said Veerathai. The bridging fund will top up when insurers cannot fully raise money in the financial market to meet their obligations.

Veerathai also promised to provide more liquidity in the government bonds market after the central bank recently purchased Bt100 billion worth of government bonds.

Prasong Poontaneat, permanent secretary of the Finance Ministry, said the ministry will on Tuesday submit to the Cabinet another economic package to support people and labour affected by the impact of the coronavirus outbreak. He did not reveal details but said that Social Security will support those who lose their jobs while the ministry will provide support to those who are not members of the Social Security Fund.

The secretary-general of the Securities and Exchange Commission, Ruenvadee Suwanmongkol, promised new measures to support the stock market affected by investors selling-off shares. Restrictions on treasury stocks, or buying back stocks, would be eased in order to allow corporates, or executives of companies to buy back stocks more easily. Currently they have to wait for one year after the first buyback takes place, she added.

Veerathai assured the markets that Thailand has plenty of liquidity due to high international reserves, banks having adequate capital and corporates having lower foreign debt. “This situation is different from the Asian financial crisis of 1997 when the country ran out of reserves, banks did not have enough capital and corporates had high foreign debt, but this time, international reserves are high, and banks have a solid capital base,” Veerathai added.

Below is the joint statement issued on Sunday on the Thai financial market’s response to the Covid-19 situation:

“The recent development of the Covid-19 situation has led to turbulence in financial markets and sales of assets across the world. This has affected liquidity and functioning of the financial market, and regulators in many countries have issued several measures to stabilise the financial markets.

“Even though the Thai financial system remains strong, with commercial banks holding healthy levels of capital and liquidity reserves, the liquidity stress and the resulting irregularity in the global financial market have begun to affect the Thai financial market. The Bank of Thailand (BOT) alleviated the situation through a government bond purchase programme of more than Bt100 billion from March 13-20, and the reduction and cancellation of BOT bond issuance, while the Monetary Policy Committee has reduced the policy rate to the record-low level of 0.75 per cent per year on March 20. “The BOT stands ready to make additional purchases of government bonds to lower the volatility of the government bond yield and ensure the normal functioning of the government bond market.

“Nonetheless, the highly volatile environment has led some investors to redeem their investment units from bond mutual funds. This has forced some bond mutual funds to liquidate their bond holdings — most of which are high-quality — at prices below fair value, impacting the funds’ value. This rapid decrease in the funds’ value might lead to further selloff of other mutual funds and result in the disruption of the bond markets, mutual funds, and eventually the overall financial markets and economy at large.

“The Ministry of Finance, the Securities and Exchange Commission, and the Bank of Thailand have been closely monitoring the situation in the financial market, and deem it necessary to take the following measures to stabilise the financial market and stop the liquidity problem from spreading further:

“Bond mutual funds: The BOT has set up a special facility to provide liquidity for mutual funds through commercial banks. Commercial banks that purchase investment units of high-quality money market funds or daily fixed income funds, which are impacted by the decreased market liquidity, will be able to use the underlying unit trust as collateral for liquidity support from this special facility. The facility will remain open until the market condition returns to normal. The BOT’s preliminary estimate of eligible bond mutual funds is approximately Bt1 trillion.

“Corporate bonds: The Thai Bankers’ Association, the Government Savings Bank, Thai insurance providers, and the Government Pension Fund have together set up a Bt70 billion to Bt100 billion Corporate Bond Stabilisation Fund to invest in high-quality, newly issued bonds by corporates that cannot fully roll over maturing corporate bonds.

“Government bonds: The BOT will continue to provide liquidity to the government bond market through bond purchasing to ensure the government bond market continues to function normally

“These measures are expected to provide liquidity and help the normal functioning of the financial market and help build investors’ confidence. Relevant public and private institutions will continue to work together, monitor the situation, and provide additional measures to ensure the normal and efficient functioning of the financial market.

“As the current stress period is the result of the temporary liquidity shortage while bond mutual funds still hold low-risk, good-quality assets, they urged the public not to rush to redeem during this period of market abnormality. Doing so might result in prices that are significantly below fair value.”

The committee’s move is aimed at reducing the interest burden on borrowers affected by the outbreak and to alleviate the liquidity strain in the financial markets.

The committee urged the BOT to closely monitor each financial institution’s assistance to borrowers and ensure sufficient liquidity.

“We see prospects for two more policy rate cuts of 25 basis points each in the second and third quarters, taking the rate to a record low of 0.25 per cent at end-2020,” Tim Leelahaphan, economist at Standard Chartered Bank predicted.

The bank said it did not expect any changes at the scheduled meeting of the Monetary Policy Committee on March 25.

“We expect the BOT to downgrade its macroeconomic forecasts sharply. Its revised 2020 GDP growth and inflation forecasts could be negative given the still-worsening coronavirus outbreak and low global oil prices,” Standard Chartered said.

“We expect negative growth (minus 1 per cent) in Thailand this year,” the bank said, adding the BOT faces limitations in its ability to be as dovish or aggressive as other central banks.

“Further deep cuts without a clear positive impact or the desired market response could risk complicating the BOT’s monetary policy-making ability.

“Policy rates below 0.5 per cent could create transmission difficulties, with banks unable to match the BOT cut given their mandatory contribution to the bailout fund (the BOT has yet to announce an adjustment to the contribution),” Tim said.

The central bank has warned of the adverse impact of ultra-low interest rates given longstanding concerns about risks to financial stability.

“While we expect the economic situation to require the BOT to cut rates to 0.25 per cent by year-end, we see little room for zero or negative rates against this backdrop,” Standard Chartered said, adding, “QE (quantitative easing) is also unlikely given the unclear pass-through to businesses, especially those that do not have access to financial markets.”

Standard Chartered said it believes fiscal policy needs to do more of the heavy lifting to support the economy and “avoid the need for zero or negative rates; fiscal stimulus measures announced so far appear to have had limited effectiveness”.