Expect the SET to trade lower today as global, regional and local market sentiment turned negative in tandem. Hawkish comments by US Federal Reserve officials regarding interest rate hikes, which inflated the dollar, continued to weigh on commodities. Though oil prices steadied overnight, there could be another selloff in the coming week if US crude stockpiles hit record highs again. Most local factors today are negative and associated with the extreme prevalent drought that is likely to prompt academic institutions and the MOF to cut their GDP forecasts.
Local issue
Drought to further drag down GPD growth. According to UTCC’s survey, severe drought conditions could cost the country’s economy as much as Bt119bn, driving GDP down by 0.85% this year. The survey also reported that the damage to the farming sector will cost approximately Bt77.9bn while the cost to industrial and service sectors will amount to Bt41.4bn. Given total amount of damage, UTCC research expects GDP growth to drop to just 2.7-2.9% this year from its previous estimate of 3-3.5%. (Bangkok Post)
FPO likely to lower GDP growth forecast. The Fiscal Policy Office (FPO) is likely to slash its economic growth forecast of 3.7% this year to reflect the looming chance of weaker-than-expected Thai shipments, despite partial supports from a series of government stimulus packages. However, the revised figure would remain higher than the Bank of Thailand's new forecast of 3.1%. (Bangkok Post)
Food exports to fall short due to the drought. Federation of Thai Industry estimates Thailand's food export value this year may not reach its target of Bt1.0tn for the second consecutive year as the looming severe drought is expected to cut crop output, along with the pressure from weak global demand. (Bangkok Post)
Government to pursue Korean banks’ presence. The government is pushing infrastructure projects as well as facilitating the presence of South Korean banks in Thailand in an attempt to lure more Korean investment. Kim Moon-yong, director general of Korea Trade Investment Promotion Agency said foreign direct investment from South Korea to Thailand amounted to only US$82mn last year from its total Asean investment of US$3.28bn, which was not proportionate given the size of Thailand’s economy as the second largest in Asean. (Bangkok Post/The Nation)
SINGER (Bt8.70) expects the drought to adversely affect sales revenue for at least three to five months. The company's non-performing loans (NPL) incurred from hire-purchase have reached 6.5% of total loans, up from 5% in 2015. Last year, the amount of products returned to the company after customers defaulted on loans rose to 10%, up from 5% in 2014, signaling that the business outlook remains poor. (Bangkok Post)
Global issues
Cautious weekend: Global equity markets are moving into the Easter holiday weekend on a more cautious note after hawkish comments from several Federal Reserve officials inflated the dollar, which in turn weighed on commodities. Investors have remained wary after deadly bombing attacks in Belgium on Tuesday. (AWS)
Cautious weekend: Global equity markets are moving into the Easter holiday weekend on a more cautious note after hawkish comments from several Federal Reserve officials inflated the dollar, which in turn weighed on commodities. Investors have remained wary after deadly bombing attacks in Belgium on Tuesday. (AWS)
Good Friday: Several markets are closed today for Good Friday, including the US, England, France, Germany, Australia, Hong Kong, Singapore, India, Phillipines, Indonesia, etc. (Reuters)
The dollar rose for a fifth day, adding 0.07% to 96.116 against a basket of major currencies. The streak is the longest for the dollar in nearly a year and puts it on track for the first weekly rise in a month. The gains were supported by remarks of St. Louis Fed President James Bullard, who joined a chorus of Fed officials who earlier this week raised the chance of at least two rate increases this year, with the first perhaps as soon as April. (Reuters)
US Treasury note prices dropped on Thursday: Benchmark US 10-year notes were down 7/32 in price to yield 1.9%, up from 1.875% on Wednesday. (Reuters)
USA
Wall Street shares ended relatively flat on Thursday, breaking a five-week winning streak, as a strengthening dollar weighed on commodity-related shares. Market sentiment this week was pressed down by comments from US Federal Reserve officials, who raised expectations for more interest rate hikes in coming months than investors expected. (Reuters)
Wall Street shares ended relatively flat on Thursday, breaking a five-week winning streak, as a strengthening dollar weighed on commodity-related shares. Market sentiment this week was pressed down by comments from US Federal Reserve officials, who raised expectations for more interest rate hikes in coming months than investors expected. (Reuters)
US durable goods orders fell in February as the manufacturing sector continues to struggle with the lingering effects of a strong dollar and lower oil prices. Orders for durable goods declined 2.8% last month after a downwardly revised 4.2% increase in January. Economists had forecast falling 2.9% last month. (Reuters)
Solid labour market: US jobless claims rose modestly last week while revisions for prior weeks showed the labor market was much stronger than previously thought. The claims increased 6,000 to a seasonally adjusted 265,000 for the week ended 19 Mar. Economists had forecast claims rising to 268,000 in the latest week. The number have now been below 300,000, a threshold associated with healthy labor market conditions, for 55 weeks, the longest stretch since 1973. (Reuters)
Europe
European equities fell for a fourth straight session on Thursday, weighed down by a drop in the shares of major mining and energy companies. (Reuters)
Asia
Japan's consumer inflation was flat in the year to February as low energy costs and weak consumption put a lid on price growth, keeping the BOJ under pressure to top up stimulus even further. That compared with a median market forecast of a 0.1% increase and followed flat growth marked in January. (Reuters)
Japan's consumer inflation was flat in the year to February as low energy costs and weak consumption put a lid on price growth, keeping the BOJ under pressure to top up stimulus even further. That compared with a median market forecast of a 0.1% increase and followed flat growth marked in January. (Reuters)
China will stop the construction of coal-fired power plants in 15 regions as part of its efforts to tackle a capacity glut in the sector, the country's energy regulator said on Thursday. (Reuters)
Commodities
Oil prices steadied on Thursday, paring losses after a renewed drop in US oil rigs offset bearish sentiment carried over from Wednesday when the EIA reported a crude inventory build three times above expectations. Baker Hughes reported US oil drillers cut 15 rigs this week to 372, the lowest since November 2009. US crude settled down 33 cents (-0.8%) at US$39.46 a barrel. For the week, it rose two cents, finishing up for a sixth straight week. Brent crude settled down 3 cents (-0.1%) at US$40.44 a barrel. For the week, it fell 76 cents, or nearly 2%, its first decline in six weeks. (Reuters)
Oil prices steadied on Thursday, paring losses after a renewed drop in US oil rigs offset bearish sentiment carried over from Wednesday when the EIA reported a crude inventory build three times above expectations. Baker Hughes reported US oil drillers cut 15 rigs this week to 372, the lowest since November 2009. US crude settled down 33 cents (-0.8%) at US$39.46 a barrel. For the week, it rose two cents, finishing up for a sixth straight week. Brent crude settled down 3 cents (-0.1%) at US$40.44 a barrel. For the week, it fell 76 cents, or nearly 2%, its first decline in six weeks. (Reuters)
Gold slipped 0.2% to US$1,217.30 an ounce, after hitting its lowest since late February at US$1,212.20, pushing down by the strong dollar. It was down 3% for the week, the worst performance since November. (Reuters)
Source: aws.co.th / settrade.com
