Thai shares look set to trade lower today in line with global equities as investors are expected to take a cautious stance ahead of the Brexit vote on 23 Jun with the latest polls pointing to an exit vote. Investors are also bracing for this week’s three major central banks’ meetings, the Fed, BOE and BOJ although markets expect all of them to stay on hold. Most local factors today are the progress of the government’s plans and measures to boost the economy which are expected to yield clear results from 2H16 but should have limited immediate impact on market sentiment.
Local issue
State funds to be launched in July. According to Deputy Prime Minister Somkid Jatusripitak, the Finance Ministry is consulting with the Council of State regarding a draft bill to set up two funds, namely the Bt100bn Thailand Future Fund and Bt10bn Competitiveness Fund. These funds are poised to launch next month. The Thailand Future Fund is set to enhance long-term investment in infrastructure projects whereas the Competitiveness Fund aims to invest in start-ups and innovative businesses. (Bangkok Post)
State funds to be launched in July. According to Deputy Prime Minister Somkid Jatusripitak, the Finance Ministry is consulting with the Council of State regarding a draft bill to set up two funds, namely the Bt100bn Thailand Future Fund and Bt10bn Competitiveness Fund. These funds are poised to launch next month. The Thailand Future Fund is set to enhance long-term investment in infrastructure projects whereas the Competitiveness Fund aims to invest in start-ups and innovative businesses. (Bangkok Post)
Progress on megaprojects would be in line. Deputy Prime Minister Somkid Jatusripitak said all the Ministry's departments have promised to ramp up efforts to complete the projects in line with their plans. The construction of the Pattaya-Map Ta Phut motorway is now under way, while the bidding for construction contracts for the three electric train projects (Pink Line, Yellow Line, and Orange Line) worth Bt212bn will take place this month. (Bangkok Post)
New measures on rural injection. Deputy Prime Minister Somkid Jatusripitak said the government is pulling together private firms and state agencies to seek new measures to boost and support rural small and medium-sized enterprises (SMEs) as well as existing One Tambon One Product (OTOP) projects. He is asking the Board of Investment (BoI) for the incentive and channels for rural economies to access funds to develop their products. (Bangkok Post)
Eye on CLMV export growth. The Commerce Minister Apiradi Tantraporn said the state is placing hopes on Cambodia, Laos, Myanmar, and Vietnam markets to help offset its declining shipments to key market destinations. In particular, Thailand anticipates to boost export to these markets to 13.6% this year, from a current 10.4% of its total exports. (Bangkok Post)
THCOM (Bt26.00; BUY; AWS 16TP Bt49.00) is prone to pay an additional processing fee to the ICT Ministry for the satellite filing process with the International Telecommunication Union (ITU), an anonymous government official said. (Bangkok Post) Comment: This is negative for THCOM but the extent and details are still unknown.
Global issues
This week is filled with event risk. The markets will be closely watching UK opinion polls as the 23 Jun referendum on staying in the EU nears. The Federal Reserve ends its two-day policy meeting Wednesday and while the market sees no chance of action, its statement and Chair Yellen's press conference will shape Fed expectations for the rest of 2016 and beyond. The BOJ's two-day meeting ends on Thursday and most economists expect them to stay on hold, but with some senior BOJ officials indicating they are ready to take further action, the BOJ is capable of surprising by easing policy further or at least signaling a move in July. The Bank of England also meets Thursday, but no action is expected ahead of the Brexit vote. (Reuters)
This week is filled with event risk. The markets will be closely watching UK opinion polls as the 23 Jun referendum on staying in the EU nears. The Federal Reserve ends its two-day policy meeting Wednesday and while the market sees no chance of action, its statement and Chair Yellen's press conference will shape Fed expectations for the rest of 2016 and beyond. The BOJ's two-day meeting ends on Thursday and most economists expect them to stay on hold, but with some senior BOJ officials indicating they are ready to take further action, the BOJ is capable of surprising by easing policy further or at least signaling a move in July. The Bank of England also meets Thursday, but no action is expected ahead of the Brexit vote. (Reuters)
US Treasury yields fell to four-month lows on Friday as European sovereign debt yields plunged on concerns about a potential British exit from the EU and global growth. Benchmark 10-year notes ended up 12/32 in price to yield 1.639%, after earlier falling to 1.627%, the lowest since 11 Feb. (Reuters)
The dollar, yen and Swiss franc rose on Friday on Brexit uncertainty and concerns over global growth, stoking a fresh wave of bids for low-risk assets. The Swiss franc reached an eight-week peak against the euro at 1.0845 francs per euro. It was last up 0.5% at 1.0850 francs. The dollar index was 0.3% higher at 94.265. (Reuters)
USA
Wall Street shares dropped on Friday following another drop in oil prices, worries about the “Brexit” and renewed concerns about the global economy. Ahead of Britain's 23 Jun referendum on whether to stay in the EU, the latest poll showed those in favor of Britain exiting the EU were well ahead of those who favor remaining. Investors were bracing for next week's Federal Reserve meeting, though the US central bank is expected to leave rates unchanged. (Reuters)
Wall Street shares dropped on Friday following another drop in oil prices, worries about the “Brexit” and renewed concerns about the global economy. Ahead of Britain's 23 Jun referendum on whether to stay in the EU, the latest poll showed those in favor of Britain exiting the EU were well ahead of those who favor remaining. Investors were bracing for next week's Federal Reserve meeting, though the US central bank is expected to leave rates unchanged. (Reuters)
US consumer sentiment eroded less than forecast in early June, led by an unexpectedly improved view of current economic conditions, University of Michigan’s data showed on Friday. The preliminary Consumers Sentiment index in June was 94.3, versus a consensus forecast of 94.0 and the final index of 94.7 in May. (Reuters)
Europe
European shares fell to near a four-week low on Friday as investors were jittery before a 23 Jun referendum in Britain on whether it will remain a member of the EU. Bookmakers' odds suggest those voting to remain in the EU will win, but polls suggest a neck-to-neck race. Lufthansa led the fall after news that its Chief Financial Officer would step down, a surprise move that comes as the airline is trying to trim its cost base. (Reuters)
European shares fell to near a four-week low on Friday as investors were jittery before a 23 Jun referendum in Britain on whether it will remain a member of the EU. Bookmakers' odds suggest those voting to remain in the EU will win, but polls suggest a neck-to-neck race. Lufthansa led the fall after news that its Chief Financial Officer would step down, a surprise move that comes as the airline is trying to trim its cost base. (Reuters)
Asia
Sentiment at large Japanese manufacturers worsened for the second consecutive quarter in 2Q16 due to a rising yen, but companies revised up their capital expenditure plans. Large businesses have expected sentiment to rebound in 3Q16. The business survey index (BSI) was minus 11.1 in 2Q16, compared with minus 7.9 in 1Q16. Nevertheless, the index measuring big manufacturers' sentiment three months ahead was at plus 7.0 versus plus 7.1 previously. (Reuters)
Sentiment at large Japanese manufacturers worsened for the second consecutive quarter in 2Q16 due to a rising yen, but companies revised up their capital expenditure plans. Large businesses have expected sentiment to rebound in 3Q16. The business survey index (BSI) was minus 11.1 in 2Q16, compared with minus 7.9 in 1Q16. Nevertheless, the index measuring big manufacturers' sentiment three months ahead was at plus 7.0 versus plus 7.1 previously. (Reuters)
China May activity indicators due today: China's National Bureau of Statistics said it will publish the following data today: May Industrial output, May Retail sales, Jan-May Fixed asset investment, Jan-May Property investment, Energy and commodity output data for May. (Reuters)
The MSCI has prepared to decide on 14 Jun whether to include mainland-listed "A" shares in its emerging market index. Last year, MSCI postponed including Chinese shares in its index, partly due to concerns over accessibility for foreigners, liquidity and the maturity of the China market. (Reuters)
Commodities
Oil prices settled down 3% on Friday after data showing the US oil drilling rig count rising for a second week in row and a stronger dollar weighed on demand for greenback-denominated crude futures. Brent's front-month settled down US$1.41 at US$50.54 a barrel, losing 2.7% for its largest drop in a month. The front-month in US crude futures fell US$1.49 to $49.07, down 3%, marking the largest slide since early April. US oil drillers added three oil rigs in the week to 10 Jun, after a nine-rig rise in the previous week, oil services firm Baker Hughes said in its weekly survey of the rig count. (Reuters)
Oil prices settled down 3% on Friday after data showing the US oil drilling rig count rising for a second week in row and a stronger dollar weighed on demand for greenback-denominated crude futures. Brent's front-month settled down US$1.41 at US$50.54 a barrel, losing 2.7% for its largest drop in a month. The front-month in US crude futures fell US$1.49 to $49.07, down 3%, marking the largest slide since early April. US oil drillers added three oil rigs in the week to 10 Jun, after a nine-rig rise in the previous week, oil services firm Baker Hughes said in its weekly survey of the rig count. (Reuters)
Gold rebounded to a fresh three-week high on Friday, as investor risk aversion lifted appetite for the metal, putting it on track for a second straight weekly rise. Spot gold rose as high as US$1,277.70 an ounce, its highest since May 18, and was up 0.4% at US$1,273.21 an ounce. It was negative earlier. (Reuters)
Source: aws.co.th / settrade.com
