Expect the SET to trade lower today as most global and local factors are negative. Tumbling crude prices after producers' talks failed to address the global supply glut should drag on energy related shares and the overall market. Wall Street’s losses would also set the tone for this week with downbeat expectations for the 1Q16 earnings season. Investors will also be cautious over the impact of earthquakes in south-western Japan, which is an important industrial hub, on global supply chains. Locally, the NESDB’s move to cut its GDP growth forecast reflects an even more bearish view towards the global and domestic economy.
Local issue
NESDB plans to cut economic growth partly due to weaker-than-expected global economic recovery as well as sluggish exports, said Porametee Vimolsiri, secretary-general of NESDB. He added that the NESDB expects the country’s economic growth to be lower than 3.3%, but unlikely to be lower than 2.8% this year. The rate cut will be officially announced on 16 May. (Bangkok Post)
NESDB plans to cut economic growth partly due to weaker-than-expected global economic recovery as well as sluggish exports, said Porametee Vimolsiri, secretary-general of NESDB. He added that the NESDB expects the country’s economic growth to be lower than 3.3%, but unlikely to be lower than 2.8% this year. The rate cut will be officially announced on 16 May. (Bangkok Post)
Industry clusters cut to five. According to Deputy Prime Minister Somkid Jatusripitak, the government is set to narrow the number of targeted industry clusters to five from ten in response to the slow pace of development and lukewarm interest from the private sector. The remaining five clusters are bio-food and agriculture; health and wellness; high technology, machinery and robotics; digital economy; and culture and services. The Finance Ministry has been ordered to revise and study new, more attractive promotional packages such as tax incentives for researchers, easier work permits for foreign workers, and financial and technical support. (Bangkok Post)
Strategy to boost rural economy revealed. The government has unveiled its strategy to stimulate the rural economy by establishing one social enterprise for each province totaling 76 social enterprises through a combination of private sector expertise, community know-how, and public funding. Such enterprises will come under a holding company “Pracharath Raksamakkee Company” developing rural business by focusing on agriculture, agriproduct processing, and tourism. (Bangkok Post)
Global issues
A deal to freeze oil output by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia demanded that Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices. (Reuters)
US Treasury yields fell on Friday after disappointing consumer sentiment and industrial output data combined with lower oil and stock prices and a weaker dollar to stoke demand for government debt. Benchmark 10-year Treasury prices rose 9/32 for a yield of 1.748%, down more than 3 basis points from late Thursday. The 10-year yield hit a session low of 1.740%. (Reuters)
The dollar fell broadly on Friday as a slide in oil prices ahead of weekend talks among producers in Doha and a soft US consumer sentiment report capped risk appetite and spurred investors to buy safe-haven currencies such as the yen. The dollar index slid 0.2% to 94.683. For the week though, it ended on a positive note with a 0.5% rise. (Reuters)
USA
Wall Street shares dropped on Friday as oil price declines weighed on energy shares and Apple dragged on the market, but major indexes still posted gains for the week. Oil prices fell as analysts anticipate a weekend meeting of major oil exporters will do little to clear global oversupply quickly. Citigroup shares plunged after the company reported a sharp drop in quarterly profit, capping a big week of bank earnings. (Reuters)
Wall Street shares dropped on Friday as oil price declines weighed on energy shares and Apple dragged on the market, but major indexes still posted gains for the week. Oil prices fell as analysts anticipate a weekend meeting of major oil exporters will do little to clear global oversupply quickly. Citigroup shares plunged after the company reported a sharp drop in quarterly profit, capping a big week of bank earnings. (Reuters)
Focus shifts to earnings season, which will intensify next week, as the next major factor influencing the market. 1Q16 profits among S&P500 companies are expected to have fallen 7.8%, according to Thomson Reuters I/B/E/S. (Reuters)
An underwhelming US consumer sentiment report on Friday: The University of Michigan survey of consumer sentiment showed a preliminary reading of 89.7 for April, compared with a forecast of 92. (Reuters)
US industrial production fell more than expected in March as manufacturing output dropped by the most in a year and mining maintained its downward trend. Industrial output declined 0.6% last month after dropping 0.6% in February. Industrial production has fallen in six of the last seven months. Economists had forecast industrial output falling only 0.1% last month. Industrial production fell at an annual rate of 2.2% in 1Q16 after decreasing at a 3.3% pace in 4Q15. (Reuters)
Europe
European shares edged lower on Friday, with automakers leading the market down after French car parts maker Faurecia fell sharply after an update on sales. Faurecia said its quarterly sales in China were down 2%. (Reuters)
European shares edged lower on Friday, with automakers leading the market down after French car parts maker Faurecia fell sharply after an update on sales. Faurecia said its quarterly sales in China were down 2%. (Reuters)
Asia
A magnitude 7.3 earthquake struck southern Japan early on Saturday, killing at least 32 people, injuring a thousand more and causing widespread damage to houses, roads and bridges. It was the second major quake to hit Kumamoto province on the island of Kyushu in just over 24 hours. The first, late on Thursday, killed nine people. The USGS, which is a government scientific body, estimated that there was a 72% likelihood of economic damage exceeding US$10bn, adding that it was too early to be specific. Major insurers are yet to release estimates. (Reuters)
A magnitude 7.3 earthquake struck southern Japan early on Saturday, killing at least 32 people, injuring a thousand more and causing widespread damage to houses, roads and bridges. It was the second major quake to hit Kumamoto province on the island of Kyushu in just over 24 hours. The first, late on Thursday, killed nine people. The USGS, which is a government scientific body, estimated that there was a 72% likelihood of economic damage exceeding US$10bn, adding that it was too early to be specific. Major insurers are yet to release estimates. (Reuters)
China's economy grew 6.7% in 1Q16, the slowest since 2009, but in line with market consensus forecast. The good news is that there is strong evidence the Chinese economy may be back on track. However, some economists worry that the recovery is being fueled by high levels of debt. (Reuters)
Commodities
Oil prices fell on Friday in subdued trade as traders and analysts anticipate a weekend meeting of major oil exporters to do little to help to clear global oversupply quickly, even though it would provide a floor for the market. Brent crude futures settled down 74 cents at US$43.10 while US crude ended down US$1.14 at US$40.36. Both contracts lost more than 3.5% earlier in the day. However, on a weekly basis, prices were higher for the second week in a row in the run up to the meeting. (Reuters)
Oil prices fell on Friday in subdued trade as traders and analysts anticipate a weekend meeting of major oil exporters to do little to help to clear global oversupply quickly, even though it would provide a floor for the market. Brent crude futures settled down 74 cents at US$43.10 while US crude ended down US$1.14 at US$40.36. Both contracts lost more than 3.5% earlier in the day. However, on a weekly basis, prices were higher for the second week in a row in the run up to the meeting. (Reuters)
Gold rose on Friday after three days of declines as the US dollar and major stock markets weakened, but bullion was headed for its first weekly drop in three. Spot gold was up 0.4% at US$1,231.96 an ounce. (Reuters)
Source: aws.co.th / settrade.com
