Expect the SET to trade lower today, taking a cue from Wall Street over disappointing corporate earnings and amid a slip in oil prices. Global financial and commodity markets were in a bit of disarray on Thursday with falling safe-haven demand for US and European bonds and gold but rising for the yen. Meanwhile, base metal copper jumped to a four-week high after strong demand from China, reflecting the country’s improving economy. Locally, the EU’s warning to Thailand on illegal fishing does not bode well for the country and the market. However, the lucky draw results for PPA winners to operate or build 67 cooperatives’ solar power facilities are good news for the sector.
Local issue
EU warned Thailand to tackle fisheries. According to Deputy Prime Minister Prawit Wongsuwan, the EU has warned Thailand of the consequences of failing to solve its illegal fishing problem, which raises concerns that the country is at risk of receiving a red card. However, Thai authorities insisted they are speeding up to tackle the problem. Meanwhile, the EU has not yet set a deadline for reviewing the country’s yellow card status after reviewing in Jan. (Bangkok Post)
EU warned Thailand to tackle fisheries. According to Deputy Prime Minister Prawit Wongsuwan, the EU has warned Thailand of the consequences of failing to solve its illegal fishing problem, which raises concerns that the country is at risk of receiving a red card. However, Thai authorities insisted they are speeding up to tackle the problem. Meanwhile, the EU has not yet set a deadline for reviewing the country’s yellow card status after reviewing in Jan. (Bangkok Post)
State eyeing better ranking. The Thai government hopes to improve the country’s world competitiveness ranking this year, in regards to their continuous effort to ease doing business, expediting infrastructure investment, and investing more in R&D. Last year, the country ranked 30th out of 61 economies, falling from 27th in 2013 and 29th in 2014. The report from International Institute for Management Development will be officially released in May. (Bangkok Post)
67 cooperatives have been granted to supply 280MW from solar power after they officially qualified and won a lucky draw held yesterday. The qualified suppliers will sign 25-year power purchase agreements (PPAs), with Bt5.66 feed-in tariff, within 120 days and commercial operation will begin no later than 30 Dec this year. Of the listed companies who participated, BCP won a draw for three projects totaling 12MW. TSE won a draw for two projects totaling 6MW. SOLAR won a draw for three projects totaling 9MW. GUNKUL won a draw for one project totaling 5MW. IFEC won a draw for one project totaling 6MW. SUPER won a draw for four projects totaling 18MW. SCN won a draw for one project totaling 5MW. GPSC won a draw for one project totaling 5MW. PSTC won a draw for two projects totaling 10MW. (Bangkok Post/InfoQuest) Comment: We believe the EPC contractors, which there are only a few players in the industry, would benefit more than the solar power project winners who obtained only small sized projects. GUNKUL (BUY, 2016TP Bt31.25) is our top pick.
Global issues
Demand for safe-haven US bonds fall: US Treasury yields rose to more than three-week highs on Thursday as oil prices held near recent highs, reducing demand for safe-haven US bonds, and as high quality European government bond yields spiked. US benchmark 10-year Treasury notes fell 5/32 in price to yield 1.87%, up from 1.85% on Wednesday and 1.78% on Tuesday. Weakness in high-grade European government bonds, which had supported US debt, added to pressure after it was reported that Greece had a primary surplus last year. (Reuters)
Demand for safe-haven US bonds fall: US Treasury yields rose to more than three-week highs on Thursday as oil prices held near recent highs, reducing demand for safe-haven US bonds, and as high quality European government bond yields spiked. US benchmark 10-year Treasury notes fell 5/32 in price to yield 1.87%, up from 1.85% on Wednesday and 1.78% on Tuesday. Weakness in high-grade European government bonds, which had supported US debt, added to pressure after it was reported that Greece had a primary surplus last year. (Reuters)
Dollar gains against euro after Draghi remarks, slips vs. yen: The euro reversed course to trade lower against the dollar on Thursday while the yen rebounded on flagging risk appetite. The euro was last down 0.04% against the dollar at US$1.1290, after hitting a nine-day high of US$1.1394. The dollar was last down 0.35% against the yen at ¥109.44, easing from a more than two-week high of ¥109.89 hit earlier in the session. The dollar index was last up 0.11% at 94.592. (Reuters)
USA
Wall Street shares ended lower on Thursday, snapping a three-day winning streak on mixed earnings. Verizon led the decline, falling 3.3% after warning that a strike by workers would likely impact its bottom line. Expectations for 1Q16 US earnings were low, with S&P500 index companies expected to post a 7.2% fall in profit on average, according to Thomson Reuters. (Reuters)
Wall Street shares ended lower on Thursday, snapping a three-day winning streak on mixed earnings. Verizon led the decline, falling 3.3% after warning that a strike by workers would likely impact its bottom line. Expectations for 1Q16 US earnings were low, with S&P500 index companies expected to post a 7.2% fall in profit on average, according to Thomson Reuters. (Reuters)
US jobless claims unexpectedly fell last week, hitting their lowest level since 1973, suggesting an apparent sharp slowdown in economic growth in 1Q16 could be temporary. The claims declined 6,000 to 247,000 last week, the lowest reading since November 1973. Economists had forecast claims rising to 263,000 in the latest week. Jobless claims have now been below 300,000 for 59 weeks, the longest stretch since 1973. (Reuters)
Mid-Atlantic factory activity weakens; outlook upbeat: The Philadelphia Federal Reserve said its business conditions index fell to -1.6 this month from a reading of 12.4 in March. However, the survey's indicators of future activity showed continued improvement - with rising expectations for increases in orders, shipments and factory jobs. (Reuters)
Europe
European shares fell slightly on Thursday after the ECB kept rates unchanged, with Swedish telecom equipment maker Ericsson and French drinks firm Pernod Ricard leading the fall after disappointing updates. Volkswagen’s shares surged after reaching a deal with US authorities to address excess diesel emissions in nearly 600,000 polluting vehicles that will include buyback offers and a possible fix. (Reuters)
European shares fell slightly on Thursday after the ECB kept rates unchanged, with Swedish telecom equipment maker Ericsson and French drinks firm Pernod Ricard leading the fall after disappointing updates. Volkswagen’s shares surged after reaching a deal with US authorities to address excess diesel emissions in nearly 600,000 polluting vehicles that will include buyback offers and a possible fix. (Reuters)
ECB sticks to loose policy, vows for more stimulus if needed: ECB President Mario Draghi kept borrowing costs at record lows, sticking to his course of ultra-loose monetary policy, and said the bank would start corporate bond purchases and a new round of cheap bank refinancing in June. (Reuters)
Asia
Japan looks likely to come up with a new round of both fiscal and monetary stimulus to help recovery and arrest unwelcome gains in the yen without direct intervention. After the rising yen pushed exports down for a sixth month in March and deadly earthquakes hit southern Japan last week, the BOJ is facing calls to expand its monetary stimulus. PM Shinzo Abe is already set to announce a fiscal stimulus plan of up to ¥10tn (US$91bn) extra spending in May. He could also top that up with disaster-relief spending after the quakes. (Reuters)
Japan looks likely to come up with a new round of both fiscal and monetary stimulus to help recovery and arrest unwelcome gains in the yen without direct intervention. After the rising yen pushed exports down for a sixth month in March and deadly earthquakes hit southern Japan last week, the BOJ is facing calls to expand its monetary stimulus. PM Shinzo Abe is already set to announce a fiscal stimulus plan of up to ¥10tn (US$91bn) extra spending in May. He could also top that up with disaster-relief spending after the quakes. (Reuters)
Mitsubishi Motors cheated on fuel economy: Japanese Transport Minister Keiichi Ishii said he wanted Mitsubishi Motors Corp to respond "with integrity" after revelations that it cheated on test to measure fuel economy, including by possibly buying back the cars in question. Mitsubishi Motors' shares plunged to a life-time low early today. They were untraded all day on Thursday amid a glut of sell orders. (Reuters)
Commodities
Oil prices fell 3% on Thursday, pausing after a two-day rally, after producers from Russia to Saudi Arabia and Iran to Libya hinted at more output amid growing US crude stockpiles. Brent crude settled down US$1.27 (-2.8%) at US$45.53 a barrel. It had gained 7% in two previous sessions. US crude slid US$1 to US$43.18. (Reuters)
Oil prices fell 3% on Thursday, pausing after a two-day rally, after producers from Russia to Saudi Arabia and Iran to Libya hinted at more output amid growing US crude stockpiles. Brent crude settled down US$1.27 (-2.8%) at US$45.53 a barrel. It had gained 7% in two previous sessions. US crude slid US$1 to US$43.18. (Reuters)
Copper rose to a four-week high on Thursday, boosted by rising expectations of improving demand growth from China after a string of stronger economic data from the top consumer. Benchmark copper on the LME finished with a 0.4% gain at US$5,000 a tonne, having peaked earlier at US$5,065 and dipped to a low of US$4,930 after funds cut bets on higher commodity prices after New York opened. (Reuters)
Gold fell on Thursday from a five-week high hit after comments from the ECB drove the euro higher. Spot gold was up 0.4% at US$1,248.50 an ounce, but was well below an earlier five-week high of US$1,270.10. US futures for April delivery settled down 0.3% at US$1,249. (Reuters)
Source: aws.co.th / settrade.com
