Thai shares look set to rise further today helped by positive cues from Wall Street, European bourses and a firmer oil. Global investors are becoming more comfortable with the prospect for a rate hike. Adding to a positive tone, the EU’s decision to give Greece a firm debt relief boosted the outlook for European banks outlook. However, the June Brexit referendum stands in the way and may limit market gains. Local factors today are negative/neutral. Declining April exports dampened hopes for continuing recovery in external demand. Meanwhile, auto sales reports were mixed, improving slightly YoY but falling MoM; only real positive is domestic sales showed growth YoY for the first time this year.
Local issue
Exports fell in April. Unlikely to reach 5% growth this year, said Ministry. The Commerce Ministry reported Thailand exports in April fell 8% YoY to US$15.5bn after two months of growth, whereas imports declined by 14.9% to US$14.8bn resulting in a US$721mn surplus in April. For the first four months export value was down 1.24% YoY to US$69.37bn. Deputy Commerce Minister Suvit Maesincee now expects 2.5% export growth this year in the best-case scenario or at worst face flat growth or only a slight decline, from previous expectation of 5% growth. (Bangkok Post/The Nation)
Exports fell in April. Unlikely to reach 5% growth this year, said Ministry. The Commerce Ministry reported Thailand exports in April fell 8% YoY to US$15.5bn after two months of growth, whereas imports declined by 14.9% to US$14.8bn resulting in a US$721mn surplus in April. For the first four months export value was down 1.24% YoY to US$69.37bn. Deputy Commerce Minister Suvit Maesincee now expects 2.5% export growth this year in the best-case scenario or at worst face flat growth or only a slight decline, from previous expectation of 5% growth. (Bangkok Post/The Nation)
FTI maintains forecast for domestic car sales to decline despite a recovery in pickup truck sales reported in April. Federation of Thai Industries reported domestic car sales in April rose slightly by 1.7% YoY to 54,986, but still declined by 6.1% YoY to 236,546 for the first four months. Shipments of domestic vehicles fell by 2% YoY to 80,491 in April but value rose by 10.2% to Bt43.1bn thanks to higher exports of PPV car. Total car exports in the first four months declined by 5.39% to 388,251 but saw an increase of 11.1% in value to Bt207bn. FTI maintained its projection of domestic passenger car sales at 750,000-780,000 units this year, declining 2.5-6.2% YoY. (Bangkok Post)
Three electric trains to be auctioned next month. According to Deputy Prime Minister Somkid Jatusripitak, three electric train projects, the Orange Line, Pink Line, and Yellow Line worth totaling Bt200bn, are set to be auctioned this June. The state is pushing investment in big-ticket infrastructure projects in a bid to drive economic momentum and spur private investment hoping to boost GDP growth amidst unfavorable exports. (Bangkok Post)
Global issues
Next market drawbacks: Uncertainty around the United Kingdom's June referendum on whether to leave the European Union, as well as November's US presidential election, stand in the way of market advance and could put downward pressure on global equity markets in the next few months. (Reuters)
Next market drawbacks: Uncertainty around the United Kingdom's June referendum on whether to leave the European Union, as well as November's US presidential election, stand in the way of market advance and could put downward pressure on global equity markets in the next few months. (Reuters)
The US dollar fell from near a 10-week high against the euro and rose just slightly against the yen on Wednesday, as traders who are betting that the Fed will soon raise interest rates took some profits on the greenback's recent gains. The dollar was last up just 0.11% against the yen at ¥110.10 after touching a session high of ¥110.45. (Reuters)
US Treasury prices fell on Wednesday with short- and medium-dated yields hitting 10-week highs, prompted by a solid advance in Wall Street stock prices. US 10-year Treasury notes were down 3/32 in price for a yield of 1.870%, up 1 basis point from on Tuesday. (Reuters)
G7 leaders’ 2-day summit meeting will start from today in Japan. Concerns about the health of the global economy are likely to be a key topic among the participants, although full agreement on macro-economic policy looks elusive. (Reuters)
USA
Wall Street rose robustly for a second straight session on Wednesday, helped by higher oil prices and investors becoming more comfortable with the prospect of an interest rate hike as early as next month. Financial led the way up as creditors stand to benefit from higher interest rates that they can pass on to borrowers. (Reuters)
Wall Street rose robustly for a second straight session on Wednesday, helped by higher oil prices and investors becoming more comfortable with the prospect of an interest rate hike as early as next month. Financial led the way up as creditors stand to benefit from higher interest rates that they can pass on to borrowers. (Reuters)
US Markit flash services PMI dropped down 51.2 in May from 52.8 in April. New orders declined to 51.7 from 52.2 in April. (Reuters)
Europe
European equities jumped to a four-week high on Wednesday with banks buoyed by progress on talks towards securing a debt relief deal for Greece, and energy shares rose on the back of a rally in oil. (Reuters)
European equities jumped to a four-week high on Wednesday with banks buoyed by progress on talks towards securing a debt relief deal for Greece, and energy shares rose on the back of a rally in oil. (Reuters)
The euro zone gave Greece its firmest offer yet of debt relief that won a provisional commitment from the IMF to return to taking part in the bailout for Athens. Eurogroup finance ministers gave a nod to releasing €10.3bn (US$11.5bn) in new funds for Greece in recognition of painful fiscal reforms pushed through by PM Alexis Tsipras's leftist-led coalition, subject to some final technical tweaks. But a bigger step forward was a deal under which the euro zone agreed to offer Athens debt relief in 2018 if that is necessary to meet agreed criteria on its payments burden. (Reuters)
Asia
Japan to raise sales tax as planned: Japanese Finance Minister Taro Aso said on Wednesday he told his G7 counterparts at a finance leaders' meeting last week that his country will proceed with a scheduled sales tax hike next year. (Reuters)
Japan to raise sales tax as planned: Japanese Finance Minister Taro Aso said on Wednesday he told his G7 counterparts at a finance leaders' meeting last week that his country will proceed with a scheduled sales tax hike next year. (Reuters)
China stocks gave up early gains to end weaker on Wednesday despite a sharp rebound in Hong Kong, as yuan depreciation fears resurfaced on the back of a stronger dollar and a possible US rate hike next month. The yuan eased to within a whisker of its early February trough on Wednesday, after the central bank fixed the softest midpoint against the dollar since March 2011. (Reuters)
Commodities
Oil prices rose about 2% on Wednesday after the US government reported a larger-than-expected drop in crude inventories, but profit-taking after the data kept prices below the US$50 a barrel level that oil bulls had been hoping for. Brent crude futures settled up US$1.13 (+2.3%) at US$49.74 a barrel. Prices climbed as high as US$49.96 in post-settlement trading. US crude futures settled 94 cents higher at US$49.56, after peaking at US$49.62, a seven-month high. (Reuters)
Oil prices rose about 2% on Wednesday after the US government reported a larger-than-expected drop in crude inventories, but profit-taking after the data kept prices below the US$50 a barrel level that oil bulls had been hoping for. Brent crude futures settled up US$1.13 (+2.3%) at US$49.74 a barrel. Prices climbed as high as US$49.96 in post-settlement trading. US crude futures settled 94 cents higher at US$49.56, after peaking at US$49.62, a seven-month high. (Reuters)
The EIA said US crude inventories fell 4.2mn barrels in the week to May 20. While the decline was steeper than the 2.5mn barrels forecast by analysts in a Reuters poll, it was not as much as the 5.1mn expected by trade group American Petroleum Institute. (Reuters)
Gold fell to a seven-week low on Wednesday after upbeat US home sales data in the previous session boosted expectations that the Fed will press ahead with interest rate hikes in the near term. Spot gold was down 0.2% at US$1,223.93 an ounce. US gold futures for June delivery settled down 0.4% at US$1,223.80 an ounce. (Reuters)
Source: aws.co.th / settrade.com
