Expect the SET to move higher today tracking sharp gains on Wall Street overnight and positive market openings in the region after a surge in oil prices and dovish Fed minutes that reaffirmed a cautious stance by Fed policymakers over rate hikes. Risk appetite is on the rise again also with a weaker dollar. Local factors today seem balanced. While optimism towards tourism has kept on rising and the government has continued to show its relentless effort in boosting the economy, consumer confidence fell again last month.
Local issue
Consumer confidence was at a five-month low in Mar, falling to 73.5 points, from 74.7 points in Feb. The fall implies there is still concern over the effects of drought on agriculture, which would eventually impact consumers’ purchasing power, especially middle-income earners. (Bangkok Post)
Consumer confidence was at a five-month low in Mar, falling to 73.5 points, from 74.7 points in Feb. The fall implies there is still concern over the effects of drought on agriculture, which would eventually impact consumers’ purchasing power, especially middle-income earners. (Bangkok Post)
Struggle in loans for low-income homebuyer. The National Housing Authority (NHA) expects bank rejection rates for housing loans given to low-income earners to rise to 25-30% this year from 20% last year largely because of the economic slowdown and high household debt. NHA expected the Pracha Rat low-cost housing scheme the government recently launched to help enable low-income earners to acquire a housing unit more easily. (Bangkok Post)
Bt500,000 assisting entrepreneurs for product improvement. Government spokesman Sansern Kaewkamnerd said yesterday that, the government is offering Bt300,000-500,000 annually to business owners, including start-up entrepreneurs, existing enterprises, or established companies, for improving their products with technology and innovation. This move is a bid to stimulate the economy from the grass roots level. This is expected to create economic value worth Bt5bn a year. (Bangkok Post)
ATTA’s optimism on tourism sector. The Association of Thai Travel Agents (ATTA) projects international tourist arrivals via its member tour companies to reach 6.5mn this year, growing 30% from last year. China would remain a key driver with growth of at least 21% to 4.5mn visitors. As of 20 Mar, international tourist arrivals through its members rose 17.6% to 1.39mn visitors, led by a 59% growth in Chinese tourists to 869,909. (Bangkok Post)
ADVANC (Bt163, BUY AWS 16TP Bt213)’s request to acquire 4G 900 MHz license for Bt75.65bn is now under consideration by the government’s legal team, the PM said. (Bangkok Post) Comment: If the company acquires this license, it should be negative since the price is hefty. ADVANC should announce the decision soon. The price is relatively cheaper than TRUE’s 900 MHz spectrum if there is a way to improve the quality of the first slot of 900 MHz.
Global issues
Dovish minutes: Federal Reserve policymakers debated whether they might hike rates in Apr but a number of them argued headwinds to growth would probably persist, with many arguing they should be cautious about raising rates, according to Fed’s minutes from the most recent meeting. There were widespread concerns among policymakers over their limited ability to counter the blow of a global economic slowdown. (Reuters) Comment: While the Fed remains happy with ongoing progress being made domestically, they are far less certain about the state of the world and its potential impact on the US and the dollar.
The US dollar hit a fresh 17-month trough against the yen on Wednesday on doubts that the BOJ would intervene to halt the yen's appreciation, while the euro inched lower against the dollar. The dollar fell below ¥110 for a second straight day and hit ¥109.85, its lowest level since late Oct 2014, after Japan’s PM said countries should avoid intervention to weaken their currencies. (Reuters)
US Treasury yields rose from one-month lows on Wednesday, led by longer-dated bonds as a rebound in oil and stock prices prompted investors to sell safe-haven government debt. However, yields pared gains slightly after the Fed’s minutes were released as they suggested a dovish outlook for the Fed. The benchmark 10-year Treasuries were last down 9/32 in price to yield 1.748% from 1.715% on Tuesday. (Reuters)
USA
Wall Street shares surged on Wednesday, boosted by gains in healthcare shares after the collapse of the US$160bn merger of Pfizer and Allergan, and by a rise in energy shares. Adding to a positive tone, minutes from the most recent Fed’s meeting suggested the Fed was unlikely to raise interest rates before Jun. (Reuters)
Wall Street shares surged on Wednesday, boosted by gains in healthcare shares after the collapse of the US$160bn merger of Pfizer and Allergan, and by a rise in energy shares. Adding to a positive tone, minutes from the most recent Fed’s meeting suggested the Fed was unlikely to raise interest rates before Jun. (Reuters)
US drugmaker Pfizer and Ireland-based Allergan called off their merger after new US Treasury rules aimed at curbing tax-cutting inversion deals. News of the merger's breakup boosted the healthcare sector on hopes that the pharmaceutical giants could turn to smaller targets. (Reuters)
Europe
European shares rose on Wednesday after steep declines in the previous session, led by the healthcare sector in a victory for US President Barack Obama's drive to stop tax-dodging corporate mergers, resulting in US drug maker Pfizer pulling out of a US$160bn deal to buy Allergan. A smaller-than-expected fall in profits at Hennes & Mauritz, the world's second biggest clothes retailer, rose 5.4% after it said the impact of US dollar strength had started to wane and should turn neutral or slightly positive by 4Q16. (Reuters)
European shares rose on Wednesday after steep declines in the previous session, led by the healthcare sector in a victory for US President Barack Obama's drive to stop tax-dodging corporate mergers, resulting in US drug maker Pfizer pulling out of a US$160bn deal to buy Allergan. A smaller-than-expected fall in profits at Hennes & Mauritz, the world's second biggest clothes retailer, rose 5.4% after it said the impact of US dollar strength had started to wane and should turn neutral or slightly positive by 4Q16. (Reuters)
Asia
The yen remains in bullish form after Japanese PM Shinzo Abe told the Wall Street Journal that countries should avoid seeking to weaken their currencies with "arbitrary intervention." Japan is hamstrung in what it can do in the run-up to G7 meetings in May. The Japanese currency has gained 8% against the dollar since 1 Jan and just under 4% against the euro. (Reuters)
The yen remains in bullish form after Japanese PM Shinzo Abe told the Wall Street Journal that countries should avoid seeking to weaken their currencies with "arbitrary intervention." Japan is hamstrung in what it can do in the run-up to G7 meetings in May. The Japanese currency has gained 8% against the dollar since 1 Jan and just under 4% against the euro. (Reuters)
Japan's services sector stalled in Mar in a worrying sign the economy is losing momentum as new business stopped growing. The Markit/Nikkei Japan Services PMI fell to 50.0 in Mar from 51.2 in Feb on a seasonally adjusted. The index remained above the 50 threshold that separates expansion from contraction for the 12th consecutive month but was at the lowest since services activity started expanding in Apr last year. (Reuters)
Activity in China's service sector strengthened in Mar, according to the Caixin/Markit services PMI, which in Mar rose to 52.2 from Feb's 51.2. Mar's moderate expansion in the service sector, which follows rises in Jan-Feb industrial profits and PMI, lends support to belief that China's economy is improving on the back of Beijing's supportive measures. (Reuters)
Commodities
Oil prices jumped more than 5% on Wednesday, their biggest advance in three weeks, after the US EIA reported a surprise draw in US crude stockpiles versus market expectations for a new record high. The US EIA said crude stockpiles dropped by 4.9mn barrels to 529.90mn barrels last week from lower imports and a continued ramp up in refinery runs. Analysts had expected inventories to hit record highs for an eighth straight week, building by 3.2mn barrels. US crude's front-month contract settled up US$1.86 (+5.2%) at US$37.75 a barrel. The Brent’s front-month settled up US$1.97 (+5.2%) at US$39.84 a barrel. (Reuters)
Oil prices jumped more than 5% on Wednesday, their biggest advance in three weeks, after the US EIA reported a surprise draw in US crude stockpiles versus market expectations for a new record high. The US EIA said crude stockpiles dropped by 4.9mn barrels to 529.90mn barrels last week from lower imports and a continued ramp up in refinery runs. Analysts had expected inventories to hit record highs for an eighth straight week, building by 3.2mn barrels. US crude's front-month contract settled up US$1.86 (+5.2%) at US$37.75 a barrel. The Brent’s front-month settled up US$1.97 (+5.2%) at US$39.84 a barrel. (Reuters)
Gold fell 1% on Wednesday as a recovery in equities prompted some profit-taking after Tuesday's rally. Spot gold was down 0.6% to US$1,223.73 an ounce after falling 1.1%. US gold futures for June delivery settled down 0.5% at US$1,223.80 an ounce. (Reuters)
Source: aws.co.th / settrade.com
