Expect the SET to trade higher today extending gains into the second day as declining anxiety about near-term Fed rate hikes continues to boost demand for risky assets. However, market gains should be limited by a decline in crude prices after US crude stockpiles hit all-time highs again, pressuring energy shares. Local factors today are balanced. Negative at the macro level seen as ADB cut GDP growth forecasts for Thailand and exporters took a pessimistic view over exports, neglecting a rise in Feb. The SRT has reached a deal with a Japanese consortium on the Red Line construction indicating big progress. Bright prospects for rice exports and digital ad spending are positive.
Local issue
ADB cuts growth forecast for Thai economy. The Asian Development Bank has revised down Thailand's economic growth outlook for this year to 3% from 3.5% as China’s slowdown and a weak recovery in major industrial economies are expected to suppress economic growth in developing Asia. Merchandise exports are expected to contract by 1%, down from flat growth forecast previously, weighed down by the global slowdown. With improved conditions, ADB forecasts the Thai economy to expand by 3.5% next year, with export growth at 1% and headline inflation rising to 2%. (Bangkok Post)
ADB cuts growth forecast for Thai economy. The Asian Development Bank has revised down Thailand's economic growth outlook for this year to 3% from 3.5% as China’s slowdown and a weak recovery in major industrial economies are expected to suppress economic growth in developing Asia. Merchandise exports are expected to contract by 1%, down from flat growth forecast previously, weighed down by the global slowdown. With improved conditions, ADB forecasts the Thai economy to expand by 3.5% next year, with export growth at 1% and headline inflation rising to 2%. (Bangkok Post)
Exporter takes pessimistic view. Neglecting an unusual rise in Feb, the Thai National Shippers' Council expects Thailand’s shipments to contract by 5.86% in the first quarter, worsen than the 4.5-5% contraction projected by Commerce Ministry, whilst pessimistically predicts exports this year will see only 0-2% growth. (Bangkok Post)
SRT signed a contract with Japanese consortium. The State Railway of Thailand yesterday signed a Bt32.39bn contract with a Japanese consortium in relation to the construction of electrical and mechanical systems for the Red Line commuter rail system. The MHSC Consortium consisting of Mitsubishi Heavy Industries, Hitachi, and Sumitomo Corp was awarded the contract after five years of negotiations and bidding. (Bangkok Post)
Government remains confident on rice export. The state is still upbeat about the country’s rice export, estimating an average of 700,000-800,000 tons a month to reach an annual total of 9.5mn tons, as targeted. As reported, in spite of a sluggish economy, Thailand shipped 2.64mn tons of rice between 1 Jan to 29 Mar, up 27% from the same period last year, generating Bt41.5bn, up 18%. (Bangkok Post)
Digital ad spending to surge this year. The Digital Advertising Association of Thailand estimates total digital advertising spending will reach Bt9.9bn this year, up almost 25% from last year, thanks to advertisers shifting from traditional to online media following high growth of internet users and advanced communications technology. (Bangkok Post)
Bt8.04bn in bank guarantee to be placed before new 4G auction as opposed to lodging Bt644mn in cash as in the previous 900MHz auction. If the winner then fails to fulfil the payment on time, the license will be awarded to the bidder proposing the second-highest price. The telecom committee will submit the draft for the NBTC board's consideration on 5 Apr, and will hold a public hearing on 22 Apr. (The Nation) Comment: This creates a higher barrier to entry for newcomers to join this auction.
ADVANC (Bt189, BUY, AWS 16TP213.00) backs lower fee for TRUE (Bt7.90). ADVANC said the regulator's reserve price when JAS (Bt3.40) won the bid for Bt75.65bn was excessive from artificial spectrum demand. (Bangkok Post) Comment: Seems that ADVANC wants to participate in the auction if the price is reasonable.
Global issues
US payrolls, China PMI on Friday next event risks: The next market focus this week are US nonfarm payrolls and a survey on China's manufacturing activity, scheduled to be released on Friday. (Reuters)
US payrolls, China PMI on Friday next event risks: The next market focus this week are US nonfarm payrolls and a survey on China's manufacturing activity, scheduled to be released on Friday. (Reuters)
The dollar is on the defensive on Thursday after dovish comments from Janet Yellen dampened demand for the currency. The dollar index last stood at 94.840, having come close to a 5-month trough of 94.578 two weeks ago. The euro was back near its 2016 peak of US$1.1377, last settling at US$1.1331. Against the yen, the greenback bought ¥112.49 after coming close to breaking below ¥112.00. (Reuters)
US Treasury prices fell on Wednesday with benchmark yields rising from four-week lows as Yellen’s remarks about gradual interest rate hikes revived demand for risky assets and spurred selling in safe haven bonds. Benchmark 10-year Treasury notes were down 10/32 in price for a yield of 1.847%, up 3.5 basis points from late on Tuesday. (Reuters)
USA
Wall Street shares rose on Wednesday, extending gains from the previous day into positive territory for 2016, one day after Federal Reserve Chair Janet Yellen's comments eased investors’ anxiety about the path of interest rate hikes. (Reuters)
Yellen’s dovish comments were echoed on Wednesday by Chicago Fed President Charles Evans, who said there was a high hurdle to raising rates in April, given low inflation. (Reuters)
Europe
European shares rose on Wednesday after Fed Chair Janet Yellen called for caution in raising US interest rates, while German retailer Metro surged on demerger plans. Yellen's comments weakened the US dollar on currency markets. That in turn supported the shares of mining and energy companies since a weaker dollar makes commodities cheaper for investors using other currencies. (Reuters)
European shares rose on Wednesday after Fed Chair Janet Yellen called for caution in raising US interest rates, while German retailer Metro surged on demerger plans. Yellen's comments weakened the US dollar on currency markets. That in turn supported the shares of mining and energy companies since a weaker dollar makes commodities cheaper for investors using other currencies. (Reuters)
Asia
PM Shinzo Abe set on Wednesday a target to double the number of foreign visitors and the amount of money they spend in Japan by 2020 to energize a flagging economy. Since taking office in 2012, Abe has relaxed visa requirements for several Asian countries, leading to an influx of Chinese visitors. He is looking to reap further benefits from the 2020 Tokyo Olympics. Abe aims to attract 40mn visitors to Japan, about twice of the number of tourists visiting Japan in 2015. Last year tourists spent ¥3.5tn (US$31.2bn) in Japan and Abe wants to more than double that amount to ¥8.0tn by 2020. (Reuters)
PM Shinzo Abe set on Wednesday a target to double the number of foreign visitors and the amount of money they spend in Japan by 2020 to energize a flagging economy. Since taking office in 2012, Abe has relaxed visa requirements for several Asian countries, leading to an influx of Chinese visitors. He is looking to reap further benefits from the 2020 Tokyo Olympics. Abe aims to attract 40mn visitors to Japan, about twice of the number of tourists visiting Japan in 2015. Last year tourists spent ¥3.5tn (US$31.2bn) in Japan and Abe wants to more than double that amount to ¥8.0tn by 2020. (Reuters)
Japanese lending rates hit a record low in February following BOJ's negative interest rate policy, offering signs of hope for the ailing economy but pressuring commercial banks' profit margins. The average lending rate stood at 1.098% in February, extending a record low for a fourth straight month. Loans extended for longer than a year were charged an average interest of 1.084%, while those for less than a year were charged 0.757%, both record lows. (Reuters)
China property market gap widens: While property prices in top-tier Chinese cities are booming, prices in smaller cities, where most of China's urban population lives, are still sinking, complicating government efforts to spread wealth more evenly and arrest slowing economic growth. (Reuters)
The PBOC said on Wednesday it will step up support for consumption in its latest effort to support a slowing economy. The central bank said it will encourage financial institutions to be innovative with consumer credit products, as the bank seeks to expand the size of the consumer credit market. Among the areas highlighted, car financing firms will be allowed to set their own downpayment rate for 'green energy' cars and second hand vehicles. (Reuters)
Commodities
Oil futures fell in early Asian trade on Thursday amid renewed worries of global oversupply after official data showed US crude inventories rose last week to a record for the seventh time in a row. That increase came despite seasonal refinery utilization hitting an 11-year high. US crude futures dropped 29 cents to US$38.03 a barrel by 0021 GMT. Brent crude futures fell 25 cents to US$39.01 a barrel. US crude stocks rose by 2.3mn barrels to 534.8mn barrels in the week to March 25, data from the US EIA showed. However, the increase was less than analysts' expectations of a 3.3mn barrel build. (Reuters)
Oil futures fell in early Asian trade on Thursday amid renewed worries of global oversupply after official data showed US crude inventories rose last week to a record for the seventh time in a row. That increase came despite seasonal refinery utilization hitting an 11-year high. US crude futures dropped 29 cents to US$38.03 a barrel by 0021 GMT. Brent crude futures fell 25 cents to US$39.01 a barrel. US crude stocks rose by 2.3mn barrels to 534.8mn barrels in the week to March 25, data from the US EIA showed. However, the increase was less than analysts' expectations of a 3.3mn barrel build. (Reuters)
Gold fell on Wednesday as a Wall street rally prompted some investors to cash in gains sparked the previous day by Fed chair Janet Yellen's cautious tone on further rate hikes. Spot gold was at US$1,232.63 an ounce, down 0.7%, having risen 1.7% on Tuesday after Yellen's speech. US gold futures for April delivery were down US$2.40 an ounce at US$1,235.10. (Reuters)
Source: aws.co.th / settrade.com
