Thai shares look set to be on the defensive today similar to most global and Asian equities ahead of the critical US non-farm payrolls report and a series of global manufacturing and service sector surveys due later in the day, all of which will provide clearer reading on the global economy. Local factors today are mostly positive, i.e. Junta’s planned doubling of the 5-year infrastructure investment to Bt3.6tn, BOT’s reading of a more stable Thai economy in Feb and TAT’s plan to further boost already strong tourism against drought. However, we believe global factors have more weight on sentiment today.
Local issue
Mega infrastructure spending may be doubled. According to a source from the government, the military government is considering to double infrastructure investment from a current Bt1.8tn to Bt3.6tn. Such action is its attempt to compensate for the low level of infrastructure investments over the past two decades as well as to stimulate the economy. The source further added that NESDB is in the process of reviewing such an investment plan, including rail and road projects, which may be completed in the next few months. (The Nation)
Mega infrastructure spending may be doubled. According to a source from the government, the military government is considering to double infrastructure investment from a current Bt1.8tn to Bt3.6tn. Such action is its attempt to compensate for the low level of infrastructure investments over the past two decades as well as to stimulate the economy. The source further added that NESDB is in the process of reviewing such an investment plan, including rail and road projects, which may be completed in the next few months. (The Nation)
Thai economy reported to be more stable in Feb. According to a report from BOT, Thailand’s overall economy in Feb saw more stability in terms of MoM comparison. Economic momentum was driven by tourism and the disbursement of public spending. Though purchase of durable goods contracted after the vehicle excise tax increased, spending on other goods and services expanded, as well as boosted by a slight rise in non-farm income. (The Nation)
TAT to boost tourism during low season. The Tourism Authority of Thailand (TAT) has mapped out activities to boost domestic tourism during the five-month low season between May and September, as TAT is concerned that the current drought situation will adversely hit the domestic economy. (The Nation)
New round of 4G auction on 24 Jun. The National Broadcasting and Telecommunications Commission (NBTC) had a resolution yesterday that a new auction round for the 900MHz spectrum license will take place on 24 Jun. The reserve price would begin at JAS’s winning price of Bt75.7bn, which will than rise by increments of Bt152mn. The final reserve price and the guarantee amount will depend on public hearings held 5-28 Apr. Three alternatives for the reserve price are Bt70.18bn, Bt73.72bn and Bt75.9bn. Bidders have to place a Bt3.78bn guarantee before the auction and the defaulter has to pay this amount plus Bt11.35bn in compensation. (Bangkok Post) Comment: Everything depends on the hearing. If the reserve price is Bt70.18bn, we think it is possible that operators will participate in the auction.
ADVANC (Bt182.00, BUY, AWS 16TP Bt213.00) submitted a request in a confidential urgent letter to the NBTC seeking an extension of the deadline for 2G switching off 2G-900MHz service from 14 Apr to 30 Jun. It cited the need for more time to migrate the remaining subscribers to other networks. (Bangkok Post) Comment: If the company get the extension, it will use less cost for migration.
TU (Bt20.90, BUY, AWS 16TP Bt22.00) added an R&D budget of Bt600mn for its three-year product development plan starting in 2015. Half will be spent this year and half next year, with new products invented in its Global Innovation Incubator rolled out throughout 2017. TU expects the incubator program to generate revenue of Bt10mn for TU and the group set a 15% revenue growth target this year. (Bangkok Post)
TRUE (Bt7.60) will issue 8.39bn TSR with Bt7.15 exercise price. Allocation ratio will be 2.932445 existing shares per 1 TSR unit. 1 unit of TSR for the right to subscribe 1 newly issued ordinary share. The XT date is 19 Apr. Exercise date is to be determined later. (SET)
Global issues
The main focus today is US non-farm payrolls report for Mar which will provide a clear reading on the US economy. According to a Reuters survey of economists, nonfarm payrolls probably increased by 205,000 this month after rising by 242,000 in Feb. The unemployment rate is forecast unchanged at an eight-year low of 4.9%. (Reuters)
The main focus today is US non-farm payrolls report for Mar which will provide a clear reading on the US economy. According to a Reuters survey of economists, nonfarm payrolls probably increased by 205,000 this month after rising by 242,000 in Feb. The unemployment rate is forecast unchanged at an eight-year low of 4.9%. (Reuters)
The dollar hit its lowest level in more than five months against a basket of currencies on Thursday and was set to post its biggest quarterly percentage loss in more than five years after dovish comments from Fed Chair Janet Yellen. The euro continued four straight sessions of gains against the dollar and hit US$1.1411, marking the first leap above US$1.1400 in 5-1/2 months. The dollar index hit 94.319, its lowest level since mid-Oct. (Reuters)
USA
Wall Street shares finished the first quarter with a low tone on Thursday after a seven-week rally as the boost from Federal Reserve Chair Janet Yellen’s dovish statement this week, that scales back expectations for any interest rate hikes, faded and some investors took profits on recent gains. (Reuters)
Wall Street shares finished the first quarter with a low tone on Thursday after a seven-week rally as the boost from Federal Reserve Chair Janet Yellen’s dovish statement this week, that scales back expectations for any interest rate hikes, faded and some investors took profits on recent gains. (Reuters)
Stronger-than-expected rise in Chicago PMI in Mar: US Chicago manufacturing PMI for Mar came in at 53.6, much better than market consensus forecast at 50.0 and well above Feb's 47.6. (Reuters)
US jobless claims unexpectedly rose last week, but remained below a level associated with a strong labor market. The claims increased 11,000 to 276,000 for the week ended 26 Mar. Economists had forecast claims remaining unchanged at 265,000 in the latest week. The number have now been below 300,000 for 55 weeks, the longest stretch since 1973. (Reuters)
Job cuts by US-based employers fell in Mar for a second straight month. Global outplacement consultancy Challenger, Gray & Christmas said US-based employers announced 48,207 jobs cuts this month, down 21.7% from Feb. Job cuts have slowed since surging in the first two months of the year. Through 1Q16, US employers announced 184,920 job cuts, up 31.8% from 4Q15, with the energy sector accounting for the bulk of the layoffs. There were also job losses in the retail and computer sectors. (Reuters)
Europe
European shares fell on Thursday after solid gains in the previous session, with French telecoms and Italian banks underperforming. Orange and Bouygues gave themselves until Sunday to salvage a merger between them, citing a lack of progress ahead of a Thursday deadline. Shares in Italian banks slumped sharply as guarantor UniCredit was considering whether to delay Banca Popolare di Vicenza's €1.76bn rights issue, currently slated for Apr, if market conditions did not improve. (Reuters)
European shares fell on Thursday after solid gains in the previous session, with French telecoms and Italian banks underperforming. Orange and Bouygues gave themselves until Sunday to salvage a merger between them, citing a lack of progress ahead of a Thursday deadline. Shares in Italian banks slumped sharply as guarantor UniCredit was considering whether to delay Banca Popolare di Vicenza's €1.76bn rights issue, currently slated for Apr, if market conditions did not improve. (Reuters)
Asia
The official Chinese manufacturing PMI data for Mar will be released today, along with the official services PMI. The official manufacturing PMI is expected to rise to 49.3 last month from 49.0 in Feb, according to a median forecast in a Reuters poll. Feb's reading was the weakest since Nov 2011. The forecast rise implies a slower rate of shrinkage thanks to a reviving property market which gave a boost to sales of steel and other construction materials. (Reuters)
The official Chinese manufacturing PMI data for Mar will be released today, along with the official services PMI. The official manufacturing PMI is expected to rise to 49.3 last month from 49.0 in Feb, according to a median forecast in a Reuters poll. Feb's reading was the weakest since Nov 2011. The forecast rise implies a slower rate of shrinkage thanks to a reviving property market which gave a boost to sales of steel and other construction materials. (Reuters)
S&P’s cut China outlook to negative: Standard & Poor's announced late on Thursday to cut China's credit outlook to negative, saying the government's reform agenda is on track but likely to proceed more slowly than expected. (Reuters)
Weak sentiment of Japanese large manufacturers in 1Q16: The BOJ's quarterly tankan survey of business confidence, published earlier on Friday, showed large manufacturers' business sentiment deteriorated to its lowest level in nearly three years and was expected to worsen in the coming quarter. (Reuters)
Commodities
Oil prices were steady to firmer on Thursday, on track to their largest monthly gain in almost a year and also a quarterly rise, helped by a weak dollar and data showing a drawdown in crude stocks at the US futures delivery hub. Brent crude for May delivery was up 34 cents (+0.8%) at US$39.60 a barrel, ahead of its expiry as the front-month contract. Jun Brent, which will be front-month from Friday, was up 0.3% at US$40.33. US crude futures settled at US$38.34, up 2 cents on the day (Reuters)
Inventories at Cushing have receded from record highs for two consecutive weeks, with US government data on Wednesday showing a 272,000-barrel drawdown in the week ending 25 Mar. Total US crude stocks, however, rose 2.3mn barrels last week to 534.8mn barrels, a record high for a seventh straight week. (Reuters)
Gold edged up on Thursday as the dollar and stock markets retreated, locking in the metal's biggest quarterly gain in nearly 30 years amid reduced expectations for US interest rate hikes. Spot gold was up 0.6% at US$1,232.06 an ounce. US gold futures settled up US$7 an ounce at US$1,235.60. (Reuters)
Source: aws.co.th / settrade.com
