Thai shares are poised to trade lower today in line with weak openings in most Asian bourses and tracking losses on Wall Street after crude oil and other commodity prices continued to slide. Mixed signals from Fed officials on the prospects of interest rate hikes resulted in anomalies in each asset class’ price movements. Locally, the glut in the property sector and the downward revision of export target by the private sector reflect weak domestic and global demand and they are negative to market sentiment. Border trade seems to be one of only a few bright spots as far as the economy is concerned.
Local issue
MPC watchful on the glut in property sector. The Bank of Thailand's Monetary Policy Committee (MPC) is closely monitoring an oversupply in the property sector, saying the slower-than-expected economic recovery, high household debt, and delays in infrastructure investment have caused demand to decline. However, the MPC cited developers' financial status remains solid and able to withstand risks from a rising glut in the market. (Bangkok Post)
MPC watchful on the glut in property sector. The Bank of Thailand's Monetary Policy Committee (MPC) is closely monitoring an oversupply in the property sector, saying the slower-than-expected economic recovery, high household debt, and delays in infrastructure investment have caused demand to decline. However, the MPC cited developers' financial status remains solid and able to withstand risks from a rising glut in the market. (Bangkok Post)
Private sector cuts export growth forecast. The Joint Standing Committee on Commerce, Industry and Banking (JSSCIB) have revised down their forecast for the country's export growth this year to a range between zero and 2%, from 2% in its earlier projection, as they believe the weak global economic recovery continues to put pressure on Thai shipments. (Bangkok Post)
Decision about joining TPP likely to be decided this month. The meeting of the International Economic Policy Committee chaired by Prime Minister Prayut Chan-o-Cha being held 29 Apr will give a better perspective on Thailand’s stance towards the Trans-Pacific Partnership (TPP), said Deputy Prime Minister Somkid Jatusripitak. The government is also optimistic that this meeting will allow negotiations with TPP members to start early next year. (Bangkok Post)
Government vows to undertake border trade issues. The state is attempting to tackle existing border trade issues aiming to boost border trade by 21.4% this year to Bt1.7tn, said Deputy Director-general of Foreign Trade Department Adul Chotinisakorn. The issues include hand-carried goods, expansion of working hour checkpoint, and cross-border transport. (Bangkok Post)
PTT (Bt280.00), the Ministry of Finance along with nine relevant defendants yesterday filed a lawsuit with the Office of the Ombudsman saying PTT has not yet completely returned all of its offshore natural gas pipelines worth Bt69bn, considered to be state property before PTT listed in SET in 2001, to the state after the Supreme Administrative Court ordered PTT to partly return the pipelines worth Bt16bn to the state in 2007. (Bangkok Post) Comment: No new issues from last four lawsuits filed with the administrative court between 2007-2012 regarding gas pipelines being returned to the state, which the court has resolutely insisted that PTT has completely returned the assets to the state. In addition, the court recently asserted the same on 16 Feb this year.
THCOM (Bt29.50, BUY, AWS 16TP 49.00) signed a contract with Forever Group, Myanmar’s leading media company to add five transponders to its existing three on Thaicom’s satellite. This helps boosting the utilisation rate on Thaicom satellites. (The Nation) Comment: Rented transponders to this entity increased from 3 to 8, or more than double. This reflects THCOM’s strong position in Asia especially the ASEAN region. There is a plenty of room for growth in the CLMV market as their broadcasting development should follow Thailand’s. We maintain a BUY recommendation with a 2016 target price of Bt49.00.
Global issues
Mixed messages on the outlook for US rate hikes: Boston Fed Reserve President Eric Rosengren was the latest to fly into the hawkish zone on Monday, calling it “surprising” that futures markets currently price in just one or even no rate hikes this year, which he said could prove "too pessimistic." Rosengren is usually on the dovish side, highlighting how out of line Fed chair Yellen sounded last week compared to her colleagues. (Reuters)
Mixed messages on the outlook for US rate hikes: Boston Fed Reserve President Eric Rosengren was the latest to fly into the hawkish zone on Monday, calling it “surprising” that futures markets currently price in just one or even no rate hikes this year, which he said could prove "too pessimistic." Rosengren is usually on the dovish side, highlighting how out of line Fed chair Yellen sounded last week compared to her colleagues. (Reuters)
The US dollar hit its lowest level against the yen in more than two weeks on Monday and was lower against a basket of major currencies on continued expectations of a slow path of Federal Reserve rate increases this year. The dollar was last down 0.32% against the yen at ¥111.31. The dollar index was last down 0.07% at 94.551, not far from a 5-1/2-month low of 94.319 touched last week. The euro was last up 0.04% against the dollar, at US$1.1390, after touching a 5-1/2-month high of US$1.1437 on Friday. (Reuters)
US Treasury yields edged down on Monday, with benchmark yields hovering near one-month lows as doubts about the durability of the US economic expansion supported views the Federal Reserve may slow the pace of interest rate hikes. Benchmark US 10-year Treasury yields fell 2 basis points to 1.772%. They hit 1.753% earlier on Monday, the lowest since 1 Mar. (Reuters)
'Panama Papers' links: Governments across the world began investigating possible financial wrongdoing by the rich and powerful after a leak of four decades of documents from a Panamanian law firm Mossack Fonseca that specialized in setting up offshore companies. The "Panama Papers" revealed financial arrangements of politicians and public figures including friends of Russian President Vladimir Putin, relatives of the PMs of Britain, Iceland and Pakistan, and the president of Ukraine. The documents could provide evidence of wealth hidden for tax evasion, money laundering, sanctions busting, drug deals or other crimes. (Reuters)
USA
Wall Street shares lost ground on Monday, retreating from a recent rally that took them to new 2016 highs, as losses in commodity-related and industrial shares offset gains in healthcare. Investors also are bracing for a weak 1Q16 profit season, with earnings for S&P500 companies projected to have fallen 7.1% YoY, according to Thomson Reuters data. (Reuters)
Wall Street shares lost ground on Monday, retreating from a recent rally that took them to new 2016 highs, as losses in commodity-related and industrial shares offset gains in healthcare. Investors also are bracing for a weak 1Q16 profit season, with earnings for S&P500 companies projected to have fallen 7.1% YoY, according to Thomson Reuters data. (Reuters)
New orders for US factory goods fell in February and business spending on capital goods was much weaker than initially thought, the latest indications that economic growth slowed further in 1Q16. The new orders declined 1.7% as demand fell broadly, reversing January's downwardly revised 1.2% increase. Orders have declined in 14 of the last 19 months. Shipments of core capital goods, which are used to calculate business equipment spending in the GDP report, fell 1.7% in February rather than the 1.1% reported last month. (Reuters)
Europe
European shares bounced back from one-month lows on Monday, led higher by gains in defensive stocks, but telecoms fell after talks between Orange and Bouygues on creating a dominant French operator collapsed. (Reuters)
European shares bounced back from one-month lows on Monday, led higher by gains in defensive stocks, but telecoms fell after talks between Orange and Bouygues on creating a dominant French operator collapsed. (Reuters)
Asia
China debt-to-equity swap could 'resolve' US$154bn in NPLs: China's first batch of debt-to-equity swaps is expected to "resolve" 1.0tn yuan (US$154.38bn) in potential bad debt in three years or less, media group Caixin reported on Monday. The commercial banks' non-performing loans surged to 1.27tn yuan at the end of 2015. (Reuters)
China debt-to-equity swap could 'resolve' US$154bn in NPLs: China's first batch of debt-to-equity swaps is expected to "resolve" 1.0tn yuan (US$154.38bn) in potential bad debt in three years or less, media group Caixin reported on Monday. The commercial banks' non-performing loans surged to 1.27tn yuan at the end of 2015. (Reuters)
Britain's PM David Cameron wants Britain and China to work together to tackle over-capacity in the steel industry and that the G20 could be a good forum to address it later in the year. Cameron is trying to salvage Britain's steel industry after Tata Steel put its British plants up for sale, putting thousands of jobs at risk. He said the fundamental problem facing the industry is the collapse in the price of steel, caused by overcapacity in China. (Reuters)
Commodities
Oil prices fell more than 2% on Monday, with Brent touching one-month lows, as investors doubted that producing countries will freeze output to rein in a worldwide glut. Brent settled down 98 cents (-2.5%) at US$37.69 a barrel, touching a 4 Mar low of US$37.60. It is down 11% from a 2016 high of US$42.54 struck on 18 Mar. US crude finished the session down US$1.09 (-2.9%) at US$35.70 a barrel. (Reuters)
Oil prices fell more than 2% on Monday, with Brent touching one-month lows, as investors doubted that producing countries will freeze output to rein in a worldwide glut. Brent settled down 98 cents (-2.5%) at US$37.69 a barrel, touching a 4 Mar low of US$37.60. It is down 11% from a 2016 high of US$42.54 struck on 18 Mar. US crude finished the session down US$1.09 (-2.9%) at US$35.70 a barrel. (Reuters)
Gold fell on Monday after strong US economic data boosted investor risk sentiment and a top US Federal Reserve official said an interest rate hike is likely to take place ahead of the market's current expectations due to fading economic concerns. Spot gold eased 0.5% to US$1,216.10 an ounce. US gold for June delivery settled down 0.3% at US$1,219 an ounce. (Reuters)
Copper touched its lowest in a month and nickel slipped to its weakest in six weeks on Monday as investors pared long positions on persisting concern over Chinese growth and metals demand. Three-month copper on the LME fell for the seventh straight session. The price dropped to US$4,757.50 a tonne, its lowest since 3 Mar, before paring losses to close at US$4,760.50, down 1.5%. (Reuters)
Source: aws.co.th / settrade.com
