Expect the SET to trade higher today after US employment and factory data for March came in very strong but a rising jobless rate and slight increase in wages were respectively against and too small to stir inflation, which gives the Fed time to continue its market-friendly monetary policy. Meanwhile, upbeat US factory data hinted at stronger corporate earnings, easing global growth concerns. However, energy stocks could be hit by tumbling oil prices. Local factors are bit and piece and tilt to negative implications, particularly property taxes and continued decline in consumer prices.
Local issue
Consumer prices continued to fall in March. The consumer price index in March dipped 0.46% YoY to stand at 105.84. This was the 15th consecutive month of decline. Core inflation stripping out raw food and energy prices was at 0.75% YoY. Consumer prices in the first quarter fell by 0.50% YoY, while core inflation was 0.67% YoY. (Bangkok Post)
Consumer prices continued to fall in March. The consumer price index in March dipped 0.46% YoY to stand at 105.84. This was the 15th consecutive month of decline. Core inflation stripping out raw food and energy prices was at 0.75% YoY. Consumer prices in the first quarter fell by 0.50% YoY, while core inflation was 0.67% YoY. (Bangkok Post)
Tax bills to be imposed on more than Bt10mn property. A senior official at the Finance Ministry said the latest draft bill on land and buildings tax may be imposed on property with a value greater than Bt10mn, yet, the final figure has not been settled. This plan is a bid to levy land and buildings tax to increase the state’s revenue ratio on assets from a currently low rate of 1% with taxes on consumption and income contributing the rest. (Bangkok Post)
Tax incentives to be offered for corporate mentors. According to Finance Minister Apisak Tantivorawong, the government will offer tax incentives to large corporations who become mentors to small firms and start-ups. This is a part of the Phee Chuay Nong (Brother Helping Brother) project, in which large companies will assist small companies with their marketing strategies, technology development, etc. Assistance expenses might see a two-fold corporate income tax deduction for participating firms. (Bangkok Post)
IAA urges SET to demutualize. Investment Analysts Association chairman Paiboon Nalinthrangkurn has encouraged the government to apply the shareholder structure of stock exchanges to sharpen market competitiveness being consistent with global capital market trend. (Bangkok Post)
BANPU (Bt16.80) plans to increase its power generating capacity to 2,400MW over the next five years (2016-20), up from the current 1,800MW of Hongsa coal-fired power plant, and in 2025 it will reach 4,300MW with total expenditure of US$5.0bn. Twenty-percent of the target in 2025 would be contributed from renewable energy, while the remaining parts would be traditional coal-fired and gas-fired power plants. (Bangkok Post) Comment: Additional details on these hefty-size investments are needed to evaluate whether they can overwhelm dilution effects from the capital increase program recently announced, as well as plausible capital increase in the near future.
Global issues
The US dollar was little changed against a basket of major currencies on Friday and hovered near more than five-month lows after market players grew less confident that stronger-than-expected US economic data would alter the Federal Reserve's dovish course. The dollar index was last mostly flat at 94.615 and not far from a 5-1/2-month low of 94.319 struck on Thursday. The euro meanwhile was poised for its biggest weekly gain against the dollar since the same date, of about 2%. (Reuters)
The US dollar was little changed against a basket of major currencies on Friday and hovered near more than five-month lows after market players grew less confident that stronger-than-expected US economic data would alter the Federal Reserve's dovish course. The dollar index was last mostly flat at 94.615 and not far from a 5-1/2-month low of 94.319 struck on Thursday. The euro meanwhile was poised for its biggest weekly gain against the dollar since the same date, of about 2%. (Reuters)
US short-dated Treasury yields rose on Friday from 1-month lows as stronger-than-expected labor and factory data in March supported the view the Fed would still raise interest rates later this year. The US benchmark 10-year Treasury note was unchanged in price for a yield of 1.786%. The 10-year yield touched a 1-month low of 1.762% earlier Friday and later reached a session high of 1.814%. (Reuters)
USA
Wall Street extended a seven-week rally on Friday after upbeat US jobs and factory data hinted at stronger corporate earnings without increasing concerns of potential US interest rate hikes. (Reuters)
Wall Street extended a seven-week rally on Friday after upbeat US jobs and factory data hinted at stronger corporate earnings without increasing concerns of potential US interest rate hikes. (Reuters)
US employment jumped in March, underscoring the economy's resilience, but an influx of Americans into the labor market could restrain nascent wage gains and maintain the Fed's cautious stance on raising interest rates. Nonfarm payrolls rose by 215,000 last month and the unemployment rate edged up to 5.0% from an 8-year low of 4.9%. Economists had forecast nonfarm payrolls increasing by 205,000 in March and the unemployment rate holding steady at 4.9%. (Reuters)
Wages increased in March, with average hourly earnings rising 7 cents or 0.3%. That lifted the YoY earnings gain to 2.3% from 2.2% in February. Wage growth of between 3.0% and 3.5% is needed to lift inflation to the Fed's 2.0% target. The labor force participation rate rose to 63% in March, the highest level since March 2014 from 62.4% in September. About 2.4mn people entered or re-entered the US job market since September, the second-largest increase in the labor force over a 6-month period on record. (Reuters)
US manufacturing activity expanded in March for the first time in six months as new orders surged, suggesting the worst of the factory rout was over. The Institute for Supply Management said its index of national factory activity rose 2.3 points to a reading of 51.8 in March. Meanwhile, Markit’s final survey of US manufacturing activity PMI came in at 51.5 in March, up slightly from 51.4 in February. (Reuters)
Improved consumer confidence: University of Michigan’s final survey of US consumer sentiment in March came in at 91, improving from 90.0 in February and better than the market consensus forecast of 90.5. (Reuters)
Europe
European equities tumbled to a one-month low on the first trading day of the quarter on Friday, with energy stocks hit by weaker oil prices while Osram retreated after it was dropped from Apple's top supplier list. European stock markets stayed in negative territory even after the US jobs data was published. (Reuters)
European equities tumbled to a one-month low on the first trading day of the quarter on Friday, with energy stocks hit by weaker oil prices while Osram retreated after it was dropped from Apple's top supplier list. European stock markets stayed in negative territory even after the US jobs data was published. (Reuters)
Asia
Japanese companies' long-term inflation expectations weakened in March from three months ago, the BOJ’s survey showed this morning, a sign January's decision to adopt negative interest rates has failed to convince firms that price rises will accelerate over time. The survey underscores the challenge the central bank faces in accelerating inflation to its 2% target from current levels around zero, keeping it under pressure to expand monetary stimulus again. (Reuters)
Japanese companies' long-term inflation expectations weakened in March from three months ago, the BOJ’s survey showed this morning, a sign January's decision to adopt negative interest rates has failed to convince firms that price rises will accelerate over time. The survey underscores the challenge the central bank faces in accelerating inflation to its 2% target from current levels around zero, keeping it under pressure to expand monetary stimulus again. (Reuters)
Death by overwork on rise in Japan: Japan is witnessing a record number of compensation claims related to death from overwork, or "karoshi", a phenomenon previously associated with the long-suffering "salary man" that is increasingly afflicting young and female employees. (Reuters)
China, Hong Kong and Taiwan’s financial market are closed today for the Chingming festival or Tomb Sweeping Day. Markets will resume trade on April 5. (Reuters)
Severe floods are expected on China's Yangtze River this year due to a strong El Nino weather pattern raising the risk of deaths and damage to property and crops along the country's longest waterway. The El Nino conditions are the strongest since records collection began in 1951, and resemble a 1998 weather pattern that flooded the river and killed thousands according to vice minister of water resources, Liu Ning. (Reuters)
Commodities
Oil tumbled about 4% on Friday, after a Saudi prince reportedly said the kingdom will not freeze output without Iran and other major producers doing so, and data showed the global crude glut was likely to grow. Brent crude for June delivery, the new front month contract for the global benchmark, settled down US$1.68 (-4.1%) at US$38.67 a barrel. It fell 3% for the week. US crude's front-month settled down US$1.55 (-4.0%) at US$36.79. It lost 7% on the week, after gaining 4% in 1Q16 and 14% in March. (Reuters)
Oil tumbled about 4% on Friday, after a Saudi prince reportedly said the kingdom will not freeze output without Iran and other major producers doing so, and data showed the global crude glut was likely to grow. Brent crude for June delivery, the new front month contract for the global benchmark, settled down US$1.68 (-4.1%) at US$38.67 a barrel. It fell 3% for the week. US crude's front-month settled down US$1.55 (-4.0%) at US$36.79. It lost 7% on the week, after gaining 4% in 1Q16 and 14% in March. (Reuters)
Gold fell more than 1% on Friday after US March payrolls data beat expectations, allaying some fears about the US economy and stoking speculation about the timing of likely interest rate hikes by the Fed this year. Spot gold was down 1% at US$1,220.07 an ounce. US gold futures for June delivery settled down US$12.1 an ounce at US$1223.50. (Reuters)
Source: aws.co.th / settrade.com
