Expect the SET to trade in a tight range today with positive bias as weak US economic data reduces Fed rate hike expectations in the near term. However, sentiment in crude prices have remained soft as US crude stock keeps on piling, pressuring energy counters. Investors will pay closely attention to Janet Yellen’s speech today for clues about the rate hikes. Weak data from Japan does not bode well for global economic prospects and Nikkei shares. Most of today’s local factors are progression of old issues and thus should have limited impact to the market sentiment.
Local issue
Loan criteria on low-cost housing projects. The Bank of Thailand has asked the Government Savings Bank, GH Bank and Krungthai Bank to jointly set approval criteria for pre-financing loans for the government's low-cost housing scheme under the Pracha Rat (People's State) initiative to prevent loans turning sour in the future. (Bangkok Post)
Loan criteria on low-cost housing projects. The Bank of Thailand has asked the Government Savings Bank, GH Bank and Krungthai Bank to jointly set approval criteria for pre-financing loans for the government's low-cost housing scheme under the Pracha Rat (People's State) initiative to prevent loans turning sour in the future. (Bangkok Post)
Recent rail decision may cause puzzle. Commerce Minister Apiradi Tantraporn said yesterday that the government’s decision to wholly invest in a high-speed rail project would have no bearing on sales of 2mn tons of rice and 200,000 tons of rubber agreed earlier as this MoU of rice and rubber sale was also a part of the Thai-Sino high-speed rail plan. However, the government insists that these rice and rubber deals will be maintained despite recent rail investment decision. (Bangkok Post)
Stimulus measures to boost GDP by 0.5%. According to Kasikorn Research Centre MD Charl Kengchon, more than Bt60bn may be injected into Thai economy in the middle of this year, which will boost GDP growth by 0.5%. Approximately Bt65.5bn is expected to flow into the economy, mainly from government’s infrastructure investment and stimulus measures, including Baan Pracha Rath and Songkran tax scheme. (The Nation)
TU (Bt20.90, BUY, AWS 16 TP Bt22.00) announced to acquire 40% share of Avanti Frozen Foods Private limited (AFFPL) in India, or about Bt650mn. AFFPL is a company focusing on shrimp processing for the export and domestic market. (SET)
Comment: Although the size of this deal may not be significant to TU’s earnings, it will slightly help TU better diversify sourcing and operational risks related to the IUU fishing problems faced by Thailand. We maintain a BUY recommendation with TP of Bt22.00.
Global issues
Federal Reserve Chair Janet Yellen will give her speech in New York later in the day. Investors will pay close attention to what she will say for clues about when the central bank might raise interest rates. (Reuters)
Federal Reserve Chair Janet Yellen will give her speech in New York later in the day. Investors will pay close attention to what she will say for clues about when the central bank might raise interest rates. (Reuters)
Rate hike expectations fall: Following weak US data on Monday, markets are pricing in about a 37% chance of a rate hike by the Fed in June, with only a 10% chance of an April increase, according to CME Group's FedWatch tool. Markets had previously priced in a 50% chance of the Fed raising rates in June. (Reuters)
The US dollar eased against a basket of major currencies on Monday after downbeat US data dampened expectations for a swifter pace of Fed rate increases. The dollar index eased from an early 1-1/2-week high of 96.399 to a session low of 95.850. (Reuters)
USA
Wall Street shares ended mixed on Monday as weaker-than-expected US economic data reduced concerns about potential interest rate hikes and a dip in oil prices pushed down energy shares. US consumer spending barely rose in February and inflation retreated, suggesting the Fed could remain cautious about raising interest rates this year. (Reuters)
Wall Street shares ended mixed on Monday as weaker-than-expected US economic data reduced concerns about potential interest rate hikes and a dip in oil prices pushed down energy shares. US consumer spending barely rose in February and inflation retreated, suggesting the Fed could remain cautious about raising interest rates this year. (Reuters)
US consumer spending edged up 0.1% in February as households cut back on goods purchases after a downwardly revised 0.1% gain in January. Consumer spending, which accounts for more than two-thirds of US economic activity, was previously reported to have increased 0.5% in January. Last month's increase was in line with economists' expectations. When adjusted for inflation, consumer spending rose 0.2%. (Reuters)
Overall US inflation retreated in February. The headline PCE dipped 0.1% last month after nudging up 0.1% in January. In the 12 months through February, the personal consumption expenditures (PCE) price index increased 1.0% after rising 1.2% in January. Excluding food and energy, prices gained 0.1% after advancing 0.3% in January. In the 12 months through February, the so-called core PCE price index increased 1.7% after a similar increase in January. The core PCE is the Fed's preferred inflation measure and is running below its 2% target. (Reuters)
Europe
Financial markets in Europe were closed for the Easter holidays on Monday following last week's Good Friday holiday. (Reuters)
Financial markets in Europe were closed for the Easter holidays on Monday following last week's Good Friday holiday. (Reuters)
Asia
Japanese consumer spending in February rose for the first time in six months, but slowing wage growth and worries about overseas economies means the government remains under pressure to come up with stimulus to boost the economy. Household spending rose 1.2% YoY in February. Market consensus forecast called for a 1.5% YoY decline and followed a 3.1% decline in January. (Reuters)
Japanese consumer spending in February rose for the first time in six months, but slowing wage growth and worries about overseas economies means the government remains under pressure to come up with stimulus to boost the economy. Household spending rose 1.2% YoY in February. Market consensus forecast called for a 1.5% YoY decline and followed a 3.1% decline in January. (Reuters)
Japanese retail sales rose 0.5% YoY in February, less than the median market consensus forecast for a 1.7% increase. (Reuters)
Japanese unemployment rate rose in February to 3.3%, from 3.2% in the previous month. The median estimate was for the jobless rate to remain unchanged. (Reuters)
China mutual funds turn to commodities, bet on reforms: China's mutual fund industry is pushing to develop investment products linked to local commodity futures, betting that plans to fight chronic oversupply in the country's mammoth resource sector will drive up prices for raw materials. (Reuters)
Commodities
Oil futures edged lower for a second straight session on Monday in thin trade as European markets observed the Easter holiday and as hedge funds and other big speculators were still hesitant to wager on a two-month long price rebound amid hefty crude inventories. Brent crude settled down 17 cents at US$40.27 a barrel. US crude finished down 7 cents at US$39.39. Both benchmarks are up about 50% from 12-year lows hit in mid-February. (Reuters)
Oil futures edged lower for a second straight session on Monday in thin trade as European markets observed the Easter holiday and as hedge funds and other big speculators were still hesitant to wager on a two-month long price rebound amid hefty crude inventories. Brent crude settled down 17 cents at US$40.27 a barrel. US crude finished down 7 cents at US$39.39. Both benchmarks are up about 50% from 12-year lows hit in mid-February. (Reuters)
Sentiment in Brent and WTI futures remained soft with investment banks, such as Barclays and Macquarie, warning that market fundamentals were weak enough to pull prices back to US$30 a barrel levels. (Reuters)
Gold edged up on Monday, as the dollar retreated after weaker-than-expected US data, but stayed close to a one-month low as investors focused on speeches by Fed officials. Spot gold was up 0.2% at US$1,218.62 an ounce. The metal lost 3% last week, its biggest weekly loss since November on speculation that the next US rate increase could come as soon as next month. (Reuters)
Source: aws.co.th / settrade.com
