Expect the SET to trade lower today, due to mixed finishes on Wall Street overnight and tumbling oil prices. Weak Chinese trade data also dashed investors’ hopes for an improved recovery. The only bright spot is that the IMF has become more optimistic over the German economy after the country’s strong industrial orders. Locally, the MOF’s tendency to impose higher excise taxes on fuel, telecom services, alcohol & beer, and tobacco adds to the negative sentiment. Meanwhile, the prospects for a return of Russian tourist arrivals and strong earnings results from TOP and GPSC on the energy counters are good but may not be enough to offset the negative global factors.
Local issue
Tax hike being considered. The Excise Department is studying a plan to impose higher taxes on fuel, alcohol, beer, tobacco, and telecommunications services in a bid to double revenue to around Bt1tn by 2027. The changes include adding 40 satang a liter to petrol and diesel tax each putting them to Bt5.35 and Bt6.00, respectively. (Bangkok Post)
Tax hike being considered. The Excise Department is studying a plan to impose higher taxes on fuel, alcohol, beer, tobacco, and telecommunications services in a bid to double revenue to around Bt1tn by 2027. The changes include adding 40 satang a liter to petrol and diesel tax each putting them to Bt5.35 and Bt6.00, respectively. (Bangkok Post)
TAT expects Russian arrivals to rebound as the ruble has made gains on the back of rising oil prices. The Authority also found the number of Russian visitors began to rise in February and kept growing in March this year, and the momentum is expected to continue throughout the year. TAT estimates 13% YoY recovery in Russian tourist arrivals reaching 1mn this year, after declining for two consecutive years since 2014. (Bangkok Post)
TOP (Bt62.00) reported a 1Q16 net profit of Bt4.7bn (+26% QoQ, +5% YoY), which was in line with Bloomberg consensus estimate at Bt4.4bn. Earnings were underpinned mainly by lower inventory losses, which offset weakening market gross refining margin (GRM) in the period. (SET)
GPSC (Bt30.75) reported a 1Q16 net profit of Bt871mn, surging +200% QoQ and +64% YoY mainly driven by full-quarter operation of IRPC-CP Phase 1 co-gen power plant for the first time, along with dividend income from Ratchaburi Power Co. (RPCL). (SET)
Global issues
The dollar gained almost 1% versus the yen on Monday after Japan's finance minister said Tokyo was ready to intervene in the currency market if needed and Fed officials kept rate hike expectations intact. The greenback hit ¥108.14, its strongest in 10 days and well clear of last week's low of ¥105.55, The dollar index hit an 11-day high of 94.056, having shown a fairly muted reaction to Friday's US jobs report. (Reuters)
The dollar gained almost 1% versus the yen on Monday after Japan's finance minister said Tokyo was ready to intervene in the currency market if needed and Fed officials kept rate hike expectations intact. The greenback hit ¥108.14, its strongest in 10 days and well clear of last week's low of ¥105.55, The dollar index hit an 11-day high of 94.056, having shown a fairly muted reaction to Friday's US jobs report. (Reuters)
Treasury yields fell on Monday as investors lowered expectations that the Federal Reserve will raise interest rates in June, after a weaker-than-expected jobs report for April on Friday. Benchmark 10-year notes rose 6/32 in price to yield 1.76%, down from 1.78% late on Friday. (Reuters)
USA
Wall Street closed mixed on Monday after a rally in the healthcare sector led by Allergan offset a decline in energy and material shares. A bigger-than-expected drop in China's imports and exports in April pointed to weak demand in China and weighed on materials stocks. Investors remain cautious about corporate earnings. With 1Q16 reports almost all in, earnings at S&P500 companies, on average, fell 5.5% while revenue was down 1.9%, according to Thomson Reuters I/B/E/S. (Reuters)
Wall Street closed mixed on Monday after a rally in the healthcare sector led by Allergan offset a decline in energy and material shares. A bigger-than-expected drop in China's imports and exports in April pointed to weak demand in China and weighed on materials stocks. Investors remain cautious about corporate earnings. With 1Q16 reports almost all in, earnings at S&P500 companies, on average, fell 5.5% while revenue was down 1.9%, according to Thomson Reuters I/B/E/S. (Reuters)
Fed officials keep rate hike expectations intact: Minneapolis Fed President Neel Kashkari said on Monday that the Fed's current monetary policy stance is appropriate but did not rule out the possibility of a rate hike in June. The comments came after New York Fed President William Dudley said on Friday that two interest rate hikes this year remain a "reasonable expectation," despite the weaker jobs data. (Reuters)
Europe
European shares rose on Monday, bouncing back after two weeks of losses and supported by gains in Germany and Greece, with the Athens market advancing on expectations of progress in tackling Greece's debt burden. (Reuters)
European shares rose on Monday, bouncing back after two weeks of losses and supported by gains in Germany and Greece, with the Athens market advancing on expectations of progress in tackling Greece's debt burden. (Reuters)
The IMF said it had become slightly more optimistic regarding the German economy after data on Monday showed a rebound in German industrial orders. Contracts for "Made in Germany" goods were up 1.9% in March, the biggest increase since last June. That beat a Reuters consensus forecast for a rise of only 0.7%. (Reuters)
Asia
Japanese Finance Minister Taro Aso said on Monday that Tokyo is ready to intervene in the currency market if yen moves are volatile enough to hurt the country's trade and economy. Japanese authorities have stayed away from the markets since they last intervened in 2011. Japanese policymakers sought to gain informal consent to act against an unwelcome yen rise during a G20 finance leaders' gathering in Washington late last month but the US and EU member countries offered a cool response. (Reuters)
Japanese Finance Minister Taro Aso said on Monday that Tokyo is ready to intervene in the currency market if yen moves are volatile enough to hurt the country's trade and economy. Japanese authorities have stayed away from the markets since they last intervened in 2011. Japanese policymakers sought to gain informal consent to act against an unwelcome yen rise during a G20 finance leaders' gathering in Washington late last month but the US and EU member countries offered a cool response. (Reuters)
China's economy is likely to grow 6.7% in 2Q16, fuelled by rising investment in infrastructure and a recovery in the property market, according to the National Development and Reform Commission. China's economy grew 6.7% in 1Q16. The services sector is likely to grow 7.5% in 2Q16, with retail sales expected to rise 10.5%. (Reuters)
Commodities
Oil prices tumbled on Monday on expectations that US crude inventories would again build to record highs, taking the market's focus off swooning Canadian oil output due to raging wildfires. US crude futures for June delivery settled down US$1.22 (-2.8%) at US$43.44 a barrel. Brent's front-month, July delivery, tumbled by US$1.74 (-3.8%) to settle at US$43.63. Investors expected total US crude inventories to have built again last week for a fifth straight week, rising by 500,000 barrels to new record highs above 543mn barrels. (Reuters)
Oil prices tumbled on Monday on expectations that US crude inventories would again build to record highs, taking the market's focus off swooning Canadian oil output due to raging wildfires. US crude futures for June delivery settled down US$1.22 (-2.8%) at US$43.44 a barrel. Brent's front-month, July delivery, tumbled by US$1.74 (-3.8%) to settle at US$43.63. Investors expected total US crude inventories to have built again last week for a fifth straight week, rising by 500,000 barrels to new record highs above 543mn barrels. (Reuters)
Gold fell 2% in its biggest one-day drop in nearly seven weeks on Monday as the strengthening dollar and a sharper appetite for assets seen as higher risk sparked selling across commodities. Spot gold was down 1.9% at US$1,263.93 an ounce, erasing the 0.8% gain made on Friday after weak non-farm payrolls data. US gold futures for June settled down 2.1% at US$1,266.60. (Reuters)
Copper hit its lowest in nearly a month on Monday as weak trade data from top consumer China highlighted poor demand growth prospects and the dollar rose after a Fed official kept rate hike expectations intact. Benchmark copper on the LME ended down 2.6% at US$4,686 a tonne, having earlier touched US$4,685, its lowest since April 12. (Reuters)
Source: aws.co.th / settrade.com
