Thai shares are set to extend losses on Friday mirroring a sharp drop on Wall Street as concerns about the global economy re-emerged after a bearish view from ECB, rekindling investor appetite for safe assets. European banks are under pressure with their plans of more lay-offs and cutbacks as they are struggling with negative rates. Oil prices resumed their slide, pressing energy shares. Locally, there are no catalysts today to fight negative global sentiment. GSB’s and SME Bank’s rate cuts are other efforts by the government to help SMEs to fight the sluggish economy.
Local issue
E-payment is expected to commence in July According to Finance Minister Apisak Tantivorawong as well as a senior a BoT official, the national e-payment scheme, including Any ID, e-tax, and a rise in the number of electronic data capture (EDC) machines, is expected to start in July. Specifically, Any ID is a system enabling people, even those without a bank account, to transfer money using mobile phones and a national ID. Meanwhile, Minister Apisak estimates 1mn EDC machines are needed around the country. (Bangkok Post)
E-payment is expected to commence in July According to Finance Minister Apisak Tantivorawong as well as a senior a BoT official, the national e-payment scheme, including Any ID, e-tax, and a rise in the number of electronic data capture (EDC) machines, is expected to start in July. Specifically, Any ID is a system enabling people, even those without a bank account, to transfer money using mobile phones and a national ID. Meanwhile, Minister Apisak estimates 1mn EDC machines are needed around the country. (Bangkok Post)
Songkran spree should see a rise in spending As reported by UTCC’s survey, in spite of the severe drought situation, spending during Songkran will increase 4.51% to approximately Bt124.5bn, marking the strongest expansion in three years. Such growth should be thanks to a long weekend, together with the government’s tax scheme. (The Nation)
Townships nationwide asked to help promote tourism Prime Minister Prayut Chan-o-cha has asked corporation from 7,000 sub-districts or Tambons nationwide to help revitalize the economy by looking for new tourism attractions or set up events in their areas to attract visitors and generate income for their communities. This tourism promotion is also a part of Pracha Rath Project, together with other main sectors, including real estate, investment, and retail. (The Nation)
GSB and SME cut the rates The Government Savings Bank (GSB) announced yesterday a cut in its MRR by 0.35% and MLR by 0.20% from 12 Apr to 7.125% and 6.5%, respectively. Meanwhile, SME Bank slashed its rates by 0.125-0.625%, in which its MRR drops to 8.925% from 9.25% and MLR falls to 6.875% from 7% effective from 1 May. The move is a bid to assist small and medium-sized enterprises who are likely to be hit by the sluggish economic situation. (Bangkok Post)
Contractors: Leading contractors “ITD, CK, STEC, UNIQ, NWR" bought bidding proposals for Suvarnabhumi Airport phase 2 with the first two contracts valued at Bt167bn. This will open for sending the proposals on 20-21 Jun 2016 before announcing the winner 20-21 Jul 2016. (Source: Kao Hoon) Comment: Good sentiment for contractors who qualified for civil work from the government, including ITD, CK, STEC, UNIQ, NWR. In 2016-2017, the government will open bidding on infrastructure projects with total value of approximately Bt1.796tn. It will secure future backlog for those companies.
TU (Bt21.40, BUY, AWS 16TP Bt22.00) eyes shrimp investments in Bangladesh and Indonesia in a bid to reduce reliance on domestic sources of the seafood, its second-biggest business. TU is targeting US$2.6bn in annual revenue from shrimp business by 2020, up from US$1.4bn last year. Revenue from the shrimp joint venture in India's Avanti Feeds Ltd should rise to US$100mn in 2017, from an estimated US$60-70mn in 2016. (Bangkok Post)
Global issues
Bearish ECB: ECB President Mario Draghi said in the central bank's annual report on Thursday that the future of the global economy remained uncertain and there were questions about Europe's ability to weather new shocks. Moreover, minutes from the ECB's March policy meeting on Thursday showed that governors from around the euro zone had been told the global economic outlook had got worse. (Reuters)
Bearish ECB: ECB President Mario Draghi said in the central bank's annual report on Thursday that the future of the global economy remained uncertain and there were questions about Europe's ability to weather new shocks. Moreover, minutes from the ECB's March policy meeting on Thursday showed that governors from around the euro zone had been told the global economic outlook had got worse. (Reuters)
Yellen: US still on track for more rate hikes: The US economy is on a solid course and still on track to warrant further interest rate hikes, Federal Reserve Chair Janet Yellen said on Thursday. Speaking at a panel with former chiefs of the US central bank, Yellen said the US labor market was "close" to full strength and that inflation was currently held back by temporary factors. (Reuters)
US Treasury yields fell broadly on Thursday to their lowest levels since late Feb as declining oil prices and global growth fears underpinned bond prices. Benchmark 10-year Treasuries rose 12/32 in price to yield 1.711%, their lowest since 1 Mar and down over 3 basis points from late on Wednesday. (Reuters)
The US dollar fell below ¥108 for the first time in 17 months on Thursday on continued expectations the BOJ was unlikely to intervene, while the euro fell against the dollar on the potential for a more dovish ECB. The dollar fell more than 1.6% against the yen to ¥107.94, its lowest level since late Oct 2014. (Reuters)
USA
Wall Street shares lost ground on Thursday as concerns about the global economy resurfaced after ECB’s minutes from the Mar policy meeting showed global economic outlook had worsened, repeating what Fed’s minutes indicated on Wednesday. Investors worried that measures taken by central banks may not be enough to put the global economy back on track. Moreover, oil prices slid, dragging down the dollar against the yen and causing investors to flee riskier assets.
Wall Street shares lost ground on Thursday as concerns about the global economy resurfaced after ECB’s minutes from the Mar policy meeting showed global economic outlook had worsened, repeating what Fed’s minutes indicated on Wednesday. Investors worried that measures taken by central banks may not be enough to put the global economy back on track. Moreover, oil prices slid, dragging down the dollar against the yen and causing investors to flee riskier assets.
Downbeat earnings expectations: 1Q16 earnings kick into high gear next week, with a 7.4% YoY decline projected for S&P500 companies, according to Thomson Reuters data. However, some investors argue the recent sharp drop in earnings forecasts could result in more positive surprises. (Reuters)
Europe
European equities fell on Thursday, as gains in healthcare shares were eclipsed by weaker major banks as they struggled with negative interest rates and talked of more lay-offs and cutbacks. Daimler and Skanska dragged the market as they traded without the attraction of their latest dividend payouts. (Reuters)
European equities fell on Thursday, as gains in healthcare shares were eclipsed by weaker major banks as they struggled with negative interest rates and talked of more lay-offs and cutbacks. Daimler and Skanska dragged the market as they traded without the attraction of their latest dividend payouts. (Reuters)
Asia
Japanese efforts to stem sharp increases in the yen could face increasing opposition from other major economies, making it even more difficult for PM Abe's administration to reflate the world's third largest economy out of stagnation. The Group of 20 agreement in Shanghai in Feb warning countries to refrain from competitive devaluation has also emboldened yen bulls. (Reuters)
Japanese efforts to stem sharp increases in the yen could face increasing opposition from other major economies, making it even more difficult for PM Abe's administration to reflate the world's third largest economy out of stagnation. The Group of 20 agreement in Shanghai in Feb warning countries to refrain from competitive devaluation has also emboldened yen bulls. (Reuters)
Commodities
Oil prices fell around 2% on Thursday after industry data suggested TransCanada Corp’s key pipeline shutdown had not reduced crude flows to the US storage base at Cushing, Oklahoma, by as much as expected. Genscape reported a build of 255,804 barrels in the week to Tuesday. Brent crude futures settled down 41 cents (-1.0%) at US$39.43 a barrel. US crude futures finished down 49 cents (-1.3%) at US$37.26, after tumbling as low as US$36.69. (Reuters)
Gold jumped almost 2% on Thursday as the dollar fell to a 17-month low against the Japanese yen following minutes from the US Federal Reserve's latest meeting and global shares fell. Spot gold hit a 2-week high of US$1,243.50 an ounce, a rise of 1.8%, and settled up 1.3% at US$1,237.60 for the day. US gold futures for June delivery settled up 1.1% at US$1,223.80 an ounce. (Reuters)
Copper suffered its biggest fall in more than six months on Thursday, falling 2.8% and hitting a six-week low of US$4,631 a tonne. Investors worried that China might be about to unleash some of its stockpiles of the metal, which are near record highs, on to the global market. (Reuters)
Source: aws.co.th / settrade.com
