Expect the SET to trade in a tight range today in a shortened-trading Songkran week after Wall Street ended with only modest gains on Friday despite sharp gains in oil prices. Concerns about the global economy and upcoming 1Q16 corporate earnings results, are reinforced by Japan’s weak economic data this morning. China’s data will be the main focus this week including the GDP figure on Friday with a downbeat consensus forecast. Most of today’s local factors are the progression on the government’s investment projects and measures with positive impact on the economy over the longer term but not for market sentiment in the short term.
Local issue
Four rail routes to be called for bids this year. The State Railway of Thailand (SRT) is anticipated to call for bids for four double-track railway projects worth more than Bt90bn this year even though the contract-signing for these projects may be delayed to next years. The four projects with a total distance of 616 km are among seven double-track railway projects initially planned by SRT after Prime Minister Prayut Chan-o-Cha issued an order under Section 44 to fast-track the projects. (Bangkok Post)
Four rail routes to be called for bids this year. The State Railway of Thailand (SRT) is anticipated to call for bids for four double-track railway projects worth more than Bt90bn this year even though the contract-signing for these projects may be delayed to next years. The four projects with a total distance of 616 km are among seven double-track railway projects initially planned by SRT after Prime Minister Prayut Chan-o-Cha issued an order under Section 44 to fast-track the projects. (Bangkok Post)
BOI investment jumps in 1Q16. According to Deputy Prime Minister Somkid Jatusripitak, the total value of investment submitted to the Board of Investment (BoI) in 1Q16 surged 234% YoY to Bt89.9bn, thanks to the government’s stimulus measures as well as BoI’s proactive approach. Given this impressive rise in 1Q16 new investment, Mr. Somkid is confident that FY16 total investment would reach the target of Bt450bn. (Bangkok Post)
Further incentives for SEZs to be considered. The Finance Ministry is considering special incentives in a bid to stimulate an investment in special economic zones (SEZs), especially in the east, which is the country’s largest direct investment area. Apart from current tax perks, ease of doing business is another key factor in luring more investments, and the new incentives must be tailor-made to serve what investors really want, Finance Minister Apisak Tantivorawong said. (Bangkok Post)
MAI aims to promote start-ups. According to President Prapan Charoenprawatt, MAI plans to ask 123 listed firms on the MAI to help or become partnerships with SMEs, start-ups, and SEs as these enterprises, especially start-ups whom have grown significantly over the past few years but still have limited support. These initiatives are parts of both SET and MAI’s attempts to sustain stock exchanges. (Bangkok Post)
Global issues
The yen retreated broadly on Friday after posting gains last week, weighed by warnings from Japan's finance minister of possible intervention by the government to weaken the currency. In late trading, the dollar fell 0.1% against the yen to ¥108.26. The dollar was down 0.3% against a basket of currencies, trading at 94.231. A Reuters poll of strategists showed on Thursday that the broader dollar rally that began in mid-2014 has nearly run its course and will only pick up slightly over the coming year. The euro, meanwhile, rose 0.2% against the dollar to US$1.1398. (Reuters)
The yen retreated broadly on Friday after posting gains last week, weighed by warnings from Japan's finance minister of possible intervention by the government to weaken the currency. In late trading, the dollar fell 0.1% against the yen to ¥108.26. The dollar was down 0.3% against a basket of currencies, trading at 94.231. A Reuters poll of strategists showed on Thursday that the broader dollar rally that began in mid-2014 has nearly run its course and will only pick up slightly over the coming year. The euro, meanwhile, rose 0.2% against the dollar to US$1.1398. (Reuters)
US Treasury debt yields rose from six-week lows on Friday, backed by a surge in oil prices and Federal Reserve Chair Janet Yellen's comments on interest-rate hikes, but fell for the second consecutive week. Benchmark 10-year Treasuries fell 8/32 in price as their yields rose nearly 3 basis points to 1.716%. Those yields had fallen to their lowest since Feb. 24 on Thursday. (Reuters)
USA
Wall Street shares finished moderately higher on Friday but ended the week with losses as although a sharp rally in crude oil and energy shares lifted the market, downbeat outlook for the upcoming earnings season that begins this week pared gains. Investor focus has shifted to quarterly reports of which analysts are projecting a third straight quarterly decrease in earnings at S&P500 companies, with a 7.6% YoY decline in profits forecast, according to Thomson Reuters data. They are particularly pessimistic over US bank results. (Reuters)
Wall Street shares finished moderately higher on Friday but ended the week with losses as although a sharp rally in crude oil and energy shares lifted the market, downbeat outlook for the upcoming earnings season that begins this week pared gains. Investor focus has shifted to quarterly reports of which analysts are projecting a third straight quarterly decrease in earnings at S&P500 companies, with a 7.6% YoY decline in profits forecast, according to Thomson Reuters data. They are particularly pessimistic over US bank results. (Reuters)
Analysts are predicting a rotten 2016 and 1Q16 for US banks. Concerns about economic growth in China, the impact of persistently low oil prices on the energy sector, and near-zero interest rates are weighing on capital markets activity as well as loan growth. Analysts forecast a 20% decline on average in earnings from the six biggest US banks, according to Thomson Reuters I/B/E/S data. Some banks are expected to report the worst results in over ten years. (Reuters)
Europe
Stocks in Europe were lifted by energy names on Friday, with Brent and US crude oil jumping more than 6% as drawdowns in US crude stockpiles fed hopes a punishing global glut that has persisted for nearly two years may be nearing the tipping point. (Reuters)
Stocks in Europe were lifted by energy names on Friday, with Brent and US crude oil jumping more than 6% as drawdowns in US crude stockpiles fed hopes a punishing global glut that has persisted for nearly two years may be nearing the tipping point. (Reuters)
Asia
Japan's core machinery orders fell less than expected in February in a sign that capital expenditure is starting to stabilise, but a strong yen, which can hurt corporate earnings, clouds the outlook. The 9.2% monthly decline in core orders, the data regarded as a leading indicator of capital spending in the coming six to nine months, was less than economists' median estimate for a 12.4% MoM fall, Cabinet Office data showed on Monday. (Reuters)
Japan's core machinery orders fell less than expected in February in a sign that capital expenditure is starting to stabilise, but a strong yen, which can hurt corporate earnings, clouds the outlook. The 9.2% monthly decline in core orders, the data regarded as a leading indicator of capital spending in the coming six to nine months, was less than economists' median estimate for a 12.4% MoM fall, Cabinet Office data showed on Monday. (Reuters)
Japan's consumer confidence improved in March but analysts say moods will likely remain subdued due to uncertainty over the global economy and financial markets. The sentiment index for general households rose 1.6 points to 41.7 in Mar from the previous month. In Feb, the index stood at 40.1 having fallen at its fastest monthly pace of decline since Oct 2013 and hitting the lowest level since Jan 2015. (Reuters)
China data will be the main focus this week with March PPI and CPI due later today (forecast -4.6% YoY and +2.5% YoY, respectively), followed by trade Wednesday (exports forecast +2.5% YoY, imports -10.2%, surplus US$30.9bn). Friday will be the key with retail sales, industrial production, urban investment and 1Q16 GDP all due. GDP growth is expected to slip to 6.7% YoY from 6.8% in 4Q15. (Reuters)
Commodities
Oil prices rose more than 6% on Friday to end with the biggest weekly gain in a month as a decline in US crude stockpiles, reported earlier in the week, and a decrease in drilling fed hopes that a global oversupply may be approaching a tipping point after nearly two years. Brent crude futures settled up US$2.51 (+6.4%) at US$41.94 a barrel, hitting a session high above US$42. US crude futures closed up US$2.46 (+6.6%) to US$39.72. Earlier, it rose to nearly US$40. (Reuters)
Oil prices rose more than 6% on Friday to end with the biggest weekly gain in a month as a decline in US crude stockpiles, reported earlier in the week, and a decrease in drilling fed hopes that a global oversupply may be approaching a tipping point after nearly two years. Brent crude futures settled up US$2.51 (+6.4%) at US$41.94 a barrel, hitting a session high above US$42. US crude futures closed up US$2.46 (+6.6%) to US$39.72. Earlier, it rose to nearly US$40. (Reuters)
US energy firms cut oil rigs for a third week in a row to the lowest level since Nov 2009, oil services company Baker Hughes Inc said Friday. Drillers cut eight oil rigs in the week to Apr 8, bringing the total rig count down to 354. (Reuters)
Gold weakened on Friday as strength in equities prompted investors to cash in some of the previous day's gains, remaining on track for its biggest weekly rise in five weeks as the Fed remained cautious on US interest rate increases. Spot gold was down 0.1% at US$1,239.70 an ounce. US gold futures for Jun delivery settled up 0.5% at US$1,243.80 an ounce. (Reuters)
Source: aws.co.th / settrade.com
