Thai shares look set to trade higher today trailing Wall Street and European shares on Friday as a positive response in risk assets to the dovish Fed policy stance should continue at least in the medium term with fears for US recession far behind. However, gains may be limited by investors’ cautious mood after a retreat in oil prices as the US rig count rose again. Many local factors today support the market. They are tariff cuts on imported IT goods, BOI’s FDI target achievement, and new tax incentive for Songkran.
Local issue
NLA to cut tariffs on IT goods. The National Legislative Assembly has agreed to cut custom tariffs on 524 IT-related goods under a WTO accord. According to the Commerce Ministry, this move is anticipated to help boost the country’s economic growth by 0.66% and help Thailand become more competitive in the IT industry and create opportunities to export more products to the US and EU. These tariff reductions will commence on 1 Jul. (The Nation)
NLA to cut tariffs on IT goods. The National Legislative Assembly has agreed to cut custom tariffs on 524 IT-related goods under a WTO accord. According to the Commerce Ministry, this move is anticipated to help boost the country’s economic growth by 0.66% and help Thailand become more competitive in the IT industry and create opportunities to export more products to the US and EU. These tariff reductions will commence on 1 Jul. (The Nation)
TAT urges domestic tourism. Tourism Authority of Thailand (TAT) has set a challenging new target for domestic tourism revenue of Bt900bn this year, up from Bt790bn in 2015 and increased from Bt850bn previously forecasted. Additional revenue is expected to come from daily merchants crossing the border from Laos, Cambodia and Myanmar for both business and leisure, along with new tourism routes connecting popular destinations in Thailand with neighboring countries. (Bangkok Post)
BoI upbeat about hitting 2016 target. The Board of Investment (BoI) is confident that total investment submitted will reach Bt200bn in 1H16, accounting for almost half of the full-year target of Bt450bn, due largely to government policies aimed at spurring investment. In the first two months of the year, the BoI approved 187 projects worth a combined Bt32bn, double the amount YoY, while total foreign direct investment generated by new investment rose to Bt12bn, well above the Bt1.9bn in last year. (Bangkok Post)
Another tax incentive scheme being planned for Songkran. The government plans to launch a new tax incentive scheme for Songkran spending in order to boost local dining and travel during the period. According to Finance Minister Apisak Tantivorawong, this tax measure is aimed to encourage people to spend during the long public holiday locally rather than internationally. The scheme will be further proposed to the cabinet in the coming weeks. (Bangkok Post)
JAS (Bt3.58) on Friday failed to submit its official confirmation letter for paying its 4G license fee despite an earlier verbal commitment, said the regulator. As a general practice, everyone who won an auction submitted the letter one working day before the payment date. People familiar with the deal previously said Bangkok Bank would agree to provide a loan only if Pete Bodharamik, JAS’ CEO, agreed to make a personal guarantee of the full amount of Bt76bn. JAS still has time to make the payment before the deadline of 4.30pm today. (Bangkok Post) Comment: There is a little chance that JAS can get a capital increase (maybe by private placement) or its CEO decides to personally guarantee by himself. We still believe that it is more likely that it cannot make the payment on time.
Global issues
Fed's less hawkish stance: Fed Chair Janet Yellen sounded doubtful last Wednesday that a recent firming in US inflation would be sustained, suggesting the central bank is in no hurry to tighten policy. She removed two full hikes this year from the baseline projections. (Reuters)
Fed's less hawkish stance: Fed Chair Janet Yellen sounded doubtful last Wednesday that a recent firming in US inflation would be sustained, suggesting the central bank is in no hurry to tighten policy. She removed two full hikes this year from the baseline projections. (Reuters)
US Treasuries prices rose for a fifth straight session on Friday, in line with gains in European sovereign markets, on the expectation that Fed will undertake fewer rate increases this year. The 30-year bond was last up 9/32 in price to yield 2.68%, from 2.689% on Thursday. (Reuters)
USA
Wall Street shares ended higher on Friday with the S&P500 closing positive for the year for the first time in 2016 as the US Federal Reserve's dovish tone and a strengthening economic outlook compelled investors to take on more risk. The rally was a continued reaction to the Fed's move on Wednesday, in which it scaled back expectations for the number of rate hikes in the coming months. (Reuters)
Wall Street shares ended higher on Friday with the S&P500 closing positive for the year for the first time in 2016 as the US Federal Reserve's dovish tone and a strengthening economic outlook compelled investors to take on more risk. The rally was a continued reaction to the Fed's move on Wednesday, in which it scaled back expectations for the number of rate hikes in the coming months. (Reuters)
Weak consumer confidence: University of Michigan Consumers’ confidence index came in at 80.0, the lowest level since October, against market consensus forecast of 82.3 and 81.9 in February. (Reuters)
Europe
European shares rose on Friday, with export-oriented auto stocks recovering as the euro lost some ground against the dollar, while oil stocks fell after a drop in crude prices. (Reuters)
European shares rose on Friday, with export-oriented auto stocks recovering as the euro lost some ground against the dollar, while oil stocks fell after a drop in crude prices. (Reuters)
Asia
China’s economy showing signs of improvement. China's recent data has showed a significant easing in capital outflows from the country as concerns about a slowdown in the world's second-largest economy abate, central bank governor Zhou Xiaochuan said on Sunday. (Reuters)
China’s economy showing signs of improvement. China's recent data has showed a significant easing in capital outflows from the country as concerns about a slowdown in the world's second-largest economy abate, central bank governor Zhou Xiaochuan said on Sunday. (Reuters)
Chinese Govt: With govt funds axing some 6mn jobs won’t raise jobless: China's leaders stressed that a major restructuring of the economy, stripping out excess industrial capacity, would not mean a corresponding spike in jobless rates. The government has earmarked 100bn yuan (US$15bn) for relocating and retraining state workers over two years, but with up to 6mn coal and steel jobs to be axed those funds could be spread very thin. (Reuters)
Japanese financial markets are closed today for a public holiday. (Reuters)
Commodities
Crude oil prices settled lower on Friday after the US rig count rose for the first time since December, renewing worries of a supply glut. US energy firms this week added one oil rig after 12 weeks of cuts, according to Baker Hughes. The addition, coming after oil rigs had fallen by two-thirds over the past year to 2009 lows, showed crude drilling picking up again after a 50% price rally since February. Brent crude finished down 34 cents (-0.8%) at US$41.20 a barrel. US crude settled down 76 cents (-1.9%) at US$39.44. (Reuters)
Crude oil prices settled lower on Friday after the US rig count rose for the first time since December, renewing worries of a supply glut. US energy firms this week added one oil rig after 12 weeks of cuts, according to Baker Hughes. The addition, coming after oil rigs had fallen by two-thirds over the past year to 2009 lows, showed crude drilling picking up again after a 50% price rally since February. Brent crude finished down 34 cents (-0.8%) at US$41.20 a barrel. US crude settled down 76 cents (-1.9%) at US$39.44. (Reuters)
Gold edged lower on Friday, as the dollar steadied above a five-month low, but the metal remained on track for a weekly gain after Fed scaled back rate increase expectations. Spot gold was down 0.31% at US$1,253.99 an ounce. US gold futures settled 0.8% lower at US$1,254.3 an ounce. Spot gold was up around 0.4% on the week. (Reuters)
Copper slipped from a 4-month high on Friday as investors locked in gains after a rally prompted by a more dovish US rate outlook. Three-month copper on the London Metal Exchange fell 0.5% to close at US$5,042 a tonne in official trade after hitting US$5,131 a tonne earlier, its best level since early November. (Reuters)
Source: aws.co.th / settrade.com
