Expect the SET to trade higher today on expectations of a dovish action and statement from the Fed and more stimulus measures from the BOJ and Japanese government. Meanwhile, oil prices hit 2016 highs and should support the energy sector and help bolster the overall market. Locally, the cabinet’s approval of the Prachuap-Chumphon double track railway project worth Bt17bn will boost construction related sectors. The BOT’s 3.0% GDP growth estimate for 1Q16 could be considered as positive for market sentiment following the report of export growth in March and 1Q16.
Local issue
The Bank of Thailand forecast the Thai economy will expand by 3.0% YoY in 1Q16, driven by continuously strong growth in foreign tourist arrivals to Thailand and accelerating government investment and spending. The BOT has still kept its GDP growth forecast for the year at 3.1%. (BOT)
The Bank of Thailand forecast the Thai economy will expand by 3.0% YoY in 1Q16, driven by continuously strong growth in foreign tourist arrivals to Thailand and accelerating government investment and spending. The BOT has still kept its GDP growth forecast for the year at 3.1%. (BOT)
Prachuap-Chumphon double track approved. The cabinet yesterday approved the Prachuap-Chumphon double track railway project worth Bt17bn. E-bidding should begin by Aug and the project should start a month after with completion expected by 2019. Transport Minister Arkhom Termpittayapaisith added that the ministry will seek cabinet approval for three more projects with construction expected to commence by the end of this year. (Bangkok Post)
Cabinet approved deposit protection extension proposed by Finance Ministry yesterday. Specifically, the cut in deposit protection will be made in phases with the protection maximum of Bt25mn by 10 Aug 2016. Then, it will be reduced to Bt15mn until 10 Aug 2018; to Bt10mn until 10 Aug 2019; to Bt5mn until 10 Aug 2020, and to Bt1mn from 11 Aug 2020 onwards. BoT governor Veerathai Santiprabhob said the delay is to allow time for adjustment and financial planning and has nothing to do with the stability of commercial banks as they have solid capital bases and high liquidity surplus. (Bangkok Post)
Sugar tax on soft drinks to be proposed to cabinet. The National Reform Steering Assembly (NRSA) voted yesterday to table the so-called sugar tax for cabinet consideration for better public health and larger state revenue. Under the plan, drinks with sugar more than 6g to 10g per 100ml would be subject to a rate that would raise their retail prices by at least 20%, while those with more than 10g of sugar per 100ml would see price increases of at least 25%. The proposed tax would increase national income by more than Bt10bn a year. (Bangkok Post)
ADVANC (Bt156.00, BUY, AWS 16TP Bt213.00)’s and TRUE (Bt7.25)’s negotiations over the 900-megahertz network rental agreement is still in a deadlock as neither company can agree on a compromise. There are still different requirements from both parties. (Bangkok Post) Comment: We think the best case for ADVANC is that the deal fails and it can still enjoy using slot 1 of 900 MHz (which is about to be auctioned) until the auction ends without paying TRUE a rental rental fee.
INTUCH (Bt53.00, BUY, AWS 16TP Bt81.00)’s venture-capital arm, InVent acquired a 10% stake in WongNai Media Co, Thailand’s largest food and lifestyle review portal and application, for an estimated value of more than Bt30mn. With a 2016 investment budget of over Bt200mn, InVent plans to invest in four start-ups, most of them series-B entities that usually each require more than Bt30mn. The move is expected to result in Wongnai increasing its revenue by 200% this year. (Bangkok Post, The Nation) Comment: We think Wongnai has a bright outlook since it is a very well-known food review website in Thailand. Although its value is minimal compared with INTUCH as a whole, it was a good move.
Global issues
Dovish Fed decision expected: US March durable goods orders and April consumer confidence data came in below the expectations of economists, reinforcing views that weak economic data would lead the Federal Reserve to strike a dovish tone in a policy statement on Wednesday. (Reuters)
Dovish Fed decision expected: US March durable goods orders and April consumer confidence data came in below the expectations of economists, reinforcing views that weak economic data would lead the Federal Reserve to strike a dovish tone in a policy statement on Wednesday. (Reuters)
The US dollar fell against the euro on Tuesday on expectations for a dovish Federal Reserve statement and greater risk appetite, while the greenback gained against the yen on expectations for increased BOJ stimulus. The euro was last up 0.24% against the dollar at US$1.1290. (Reuters)
USA
Wall Street shares closed mixed on Tuesday. The DJIA and S&P500 ticked up on gains in the energy and materials sectors despite lackluster economic data. However, the market pared earlier gains and Nasdaq closed lower for the day on expectations Apple would report its first decline in quarterly revenue in 13 years. (Reuters)
Wall Street shares closed mixed on Tuesday. The DJIA and S&P500 ticked up on gains in the energy and materials sectors despite lackluster economic data. However, the market pared earlier gains and Nasdaq closed lower for the day on expectations Apple would report its first decline in quarterly revenue in 13 years. (Reuters)
Orders for long-lasting US manufactured goods rebounded less than expected in March as demand for automobiles, computers and electrical goods slumped, suggesting the downturn in the factory sector was far from over. Orders for durable goods increased 0.8% last month after declining 3.1% in February. Economists had forecast durable goods orders advancing 1.8% last month. (Reuters)
US consumer confidence index fell to 94.2 in April from 96.2 in March, versus market consensus forecast of 96.0. Consumers were a bit pessimistic on the economy's short-term prospects, implying they did not expect a pick-up in activity. (Reuters)
Europe
European shares ended slightly higher on Tuesday, supported by firmer oil prices and encouraging company results, with pulp and paper maker UPM and oil major BP rallying on better-than-expected figures. (Reuters)
European shares ended slightly higher on Tuesday, supported by firmer oil prices and encouraging company results, with pulp and paper maker UPM and oil major BP rallying on better-than-expected figures. (Reuters)
Asia
Japan is preparing an extra budget of more than US$4.5bn for reconstruction of areas hit by this month's deadly earthquakes, but the central bank is unlikely to grant any relief to banks in the stricken region. The quakes on the southern island of Kyushu killed about 50 people and damaged at least 5,000 homes. (Reuters)
Japan's government might issue spending vouchers and promote national discount-sales events similar to Black Friday in the US to boost its lacklustre consumer spending and accelerate gross domestic product growth. (Reuters)
Chinese commodities exchanges stepped up efforts on Tuesday to curb surging prices that some say have been driven by speculators, raising fears of another derivatives bubble after last year's stock market collapse. Transaction fees for iron ore futures were hiked for a second time in as many days, after the original increase led to a sharp drop in iron ore and steel futures in China that helped cool a week-long surge in local commodities markets. (Reuters)
Commodities
Crude oil prices hit 2016 highs on Tuesday after a surprise drawdown report in US crude stockpiles. The American Petroleum Institute (API) reported a drawdown of nearly 1.1mn barrels in US crude inventories last week versus a 2.4mn-barrel build expected by analysts. Brent crude futures finished up US$1.26 (+2.8%) at US$45.74 a barrel. In post-settlement trade, it rose as much as US$2.01 to a 2016 high of US$46.49. US crude futures settled up US$1.40 (+3.3%) at US$44.04. It gained US$2.19 in after-hours trade to reach a year-to-date peak of US$44.83. (Reuters)
Crude oil prices hit 2016 highs on Tuesday after a surprise drawdown report in US crude stockpiles. The American Petroleum Institute (API) reported a drawdown of nearly 1.1mn barrels in US crude inventories last week versus a 2.4mn-barrel build expected by analysts. Brent crude futures finished up US$1.26 (+2.8%) at US$45.74 a barrel. In post-settlement trade, it rose as much as US$2.01 to a 2016 high of US$46.49. US crude futures settled up US$1.40 (+3.3%) at US$44.04. It gained US$2.19 in after-hours trade to reach a year-to-date peak of US$44.83. (Reuters)
Gold rebounded on Tuesday after weaker-than-expected US durable goods data knocked the dollar to a session low against the euro, but prices remained hemmed into a narrow range as a two-day Federal Reserve policy meeting began. Spot gold was up 0.3% at US$1,241.66 an ounce, while US gold futures for June delivery settled up 0.3% at US$1,243.40 an ounce. (Reuters)
Source: aws.co.th / settrade.com
