Local issue
World Bank reiterated Thailand’s GDP at 2.5%. Growth would be driven by fiscal stimulus measures and increasing tourism revenue, before continuously growing by 2.6% in 2017. However, it could go lower than 2.5% this year if fiscal disbursement in the second and third quarters cannot be accelerated. The banks’ senior country economist said timely implementation of infrastructure projects this year and next can contribute to more positive outlook for Thai economy. (Bangkok Post)
Cabinet nods Eastern Economic Corridor (EEC). The cabinet recently approved the Eastern Economic Corridor (EEC), through three eastern provinces including Chon Buri, Rayong and Chachoengsao, designating for development as a high-tech industry cluster for ten targeted industries. Deputy Prime Minister Somkid Jatusripitak is now working with related ministries to conduct a detailed study of the project, which should be finished within the next three months. The government preliminarily estimates a minimum of Bt300bn as a project cost, while expecting Bt1.5tn worth of private investment to pour into the EEC over the next five years (Bangkok Post)
State revenue collection target on track. The government is on course to reach its fiscal year’s revenue target of Bt2.33tn as revenues for eight months to May have already hit Bt1.56tn, up 13.4% YoY. Such increase was mainly attributed to Bt48.2bn from the auctions of the 900- and 1800-MHz spectrum licenses. (Bangkok Post)
Proposal of new train line. MRTA will ask the cabinet to approve Public Private Partnership (PPP) bidding to launch a new MRT line under West Orange Line, 16 km. from Culture Center on Ratchadapisek road to Taling Chan, adding from East Orange Line, 35 km. from Culture Center to Minburi, Bt83bn budgeting which is expected to start the bidding process in July 2016. Moreover, MRTA will launch a new route of MRT Blue Line extension through Bangkae to Phutthaqmonthon Sai 4, distance 8 km. (Tunhoon)
Comment: The market is awaiting the exact date bidding will open on these two big projects. The Mechanical and Engineering (M&E) system for MRT Blue Line extension for BEM will be postponed to no later than October 2016, and MRT Orange Line in July 2016. The M&E system of the Blue Line will benefit BEM and CK the most, and the Orange Line is excepted to benefit four leading contractors including ITD, CK, STEC and UNIQ as they are directly qualified from MRTA.
Global issues
Suicide bombers attacked Istanbul airport: At least 31 people were killed and 147 more wounded in Tuesday's attack on Istanbul's main international airport. Three suicide bombers opened fire before blowing themselves up causing the death and injuries. (Reuters)
US Treasury prices held steady on Tuesday as worries about sluggish economic growth countered relief from a recovery in stock markets around the globe which were crushed following Brexit vote. Benchmark 10-year notes were little changed in price to yield 1.461%. The 10-year yield hit a near four-year low of 1.406% on Friday. (Reuters)
The US dollar slipped against the British pound and the euro on Tuesday as the market took a breather and potential profit-taking after a brutal two-day selloff in sterling and the euro sparked by Brexit vote. Sterling was last up 0.9% against the greenback at US$1.3346, regaining some ground after hitting a 31-year low of US$1.3122 on Monday. The euro was last up 0.3% against the dollar at US$1.1053 after hitting a 3-1/2 month low of US$1.0909 on Friday. (Reuters)
USA
Wall Street shares bounced back on Tuesday, recouping some recent losses, as investors sought cheap assets after a two-day equities rout sparked by Britain's decision to leave the EU. Financials and tech stocks, hit hard in the wake of the referendum, were among the top gaining sectors. Energy shares sharply gained, leading all groups, supported by higher oil prices. (Reuters)
The US economy expanded by a 1.1% annual rate in 1Q16, rather than the 0.8% pace reported last month, the Commerce Department said on Tuesday. US economic growth slowed but gains in exports and software investment partially offset weak consumer spending. The economy grew at a rate of 1.4% in 4Q15. The first-quarter revision was broadly in line with economists' expectations. (Reuters)
The Atlanta Federal Reserve is currently estimating 2Q16 GDP rising at a 2.6% rate with retail sales and home sales rising in both April and May, even though business spending continues to struggle and job growth has slowed. (Reuters)
US corporates’ after-tax profits increased at a 2.2% rate in 1Q16, rather than the previously reported 0.6% pace. Profits tumbled at an 8.4% pace in 4Q15. (Reuters)
Europe
European shares rose for the first time in three days on Tuesday after a heavy sell-off following Britain's shock vote to leave the EU, with battered financial stocks leading the bounce. (Reuters)
Asia
Japanese retail sales fell 1.9% YoY in May, more than a median market forecast for a 1.6% decline, government data showed on Wednesday. (Reuters)
The Japanese government is likely to include assistance for small businesses in an economic stimulus package it will compile after the Brexit vote, Economy Minister Nobuteru Ishihara said on Tuesday. The government is willing to spend at least ¥10tn (US$98bn) for this assistance. (Reuters)
Commodity futures in China from steel to soymeal rallied on Tuesday, as investors bet on countries bringing in measures to counter the shock to markets and economies from Britain's vote to leave the EU. (Reuters)
Commodities
Oil prices jumped more than 3% on Tuesday with investors buying back into the market after a two-day rout triggered by Brexit vote. A looming strike at several Norwegian oil and gas fields helped put a floor beneath crude futures after an 8% price slump over two days. Investors were also counting on a sizeable and a sixth weekly drop in US crude stockpiles. The API indicated in a preliminary report that crude inventories could have fallen nearly 4mn barrels last week, against the 2.4mn barrels expected by analysts. Brent crude settled up 3%, or US$1.42, at US$48.58 per barrel. US crude rose 3.3%, or US$1.52, to settle at US$47.85. (Reuters)
Gold fell more than 1% on Tuesday as buyers cashed in gains from the biggest two-day rally in the metal since late 2008, made in the wake of Brexit vote last week. Spot gold was down 1% at US$1,311.60 an ounce, off an earlier low of US$1,305.23. Bullion was on track to finish June up 8% and the second quarter up more than 6%.
Source: aws.co.th / settrade.com
