Expect the SET to fall today following slides in overseas markets as mounting fears about Britain exiting the EU dampened risk appetite. Adding to a negative tone, weak Chinese investment data fueled worries about the health of the world’s second largest economy, offsetting optimism that MSCI may this week add Chinese A shares to its emerging market index. Again local factors today seem unable to counter the global dour mood. The news that the TAT joined hands with Baidu to lure more Chinese tourists to Thailand should be successful and positive to Thailand tourism when other economic sectors have still been weak.
Local issue
TAT, Baidu jointly lure high-end Chinese tourists to Thailand. Tourism Authority of Thailand (TAT) and China-based firm Baidu collaboratively plan to publish and exhibit information regarding tourism products and services in Thailand provided to Chinese tourists, focusing on high-end travelers from various cities of China including Shanghai, Beijing, Guangzhou, Shenzhen, Chongqing and Chengdu. This collaboration will allow TAT to reach this target group directly and rapidly. TAT expects the number of Chinese tourists visiting Thailand to reach 10mn this year, an increase from 8mn in 2015, generating Bt509bn in revenue, up 35%. (The Nation)
TAT, Baidu jointly lure high-end Chinese tourists to Thailand. Tourism Authority of Thailand (TAT) and China-based firm Baidu collaboratively plan to publish and exhibit information regarding tourism products and services in Thailand provided to Chinese tourists, focusing on high-end travelers from various cities of China including Shanghai, Beijing, Guangzhou, Shenzhen, Chongqing and Chengdu. This collaboration will allow TAT to reach this target group directly and rapidly. TAT expects the number of Chinese tourists visiting Thailand to reach 10mn this year, an increase from 8mn in 2015, generating Bt509bn in revenue, up 35%. (The Nation)
Working panel set to monitor megaprojects. The government will set up a working panel, chaired by Prime Minister Prayut Chan-o-cha, to closely monitor the progress of key infrastructure and water development projects, as well as propose legal amendments to ease doing business. The move aims to commence the construction of 20 megaprojects valued at Bt1.6tn as a part of a plan to boost the economy and increase the country’s competitiveness. (Bangkok Post)
AAV (Bt6.00) announced the board of directors had given approval for Tassapon Bijleveld, AAV’s CEO and his family to sell 1.8915bn shares for Bt4.20 each to Vichai Srivaddhanaprabha, founder and CEO of King Power Duty Free, and his family members. Vichai and his family have taken a 39% controlling stake in Asia Aviation (AAV), the operator of Thailand’s largest budget airline Thai AirAsia, from the carrier’s chief executive Tassapon and his family members in a deal worth more than Bt7.9bn. After the transaction was completed yesterday through big lot of purchases via the SET, Tassapon and family reduced shareholding in AAV to 5%. Vichai and his group will have to proceed with a mandatory tender offer to acquire all remaining securities of AAV from its other shareholders in accordance with stock-market regulations at the price of Bt4.2 per share.
Comment: It is apparent that Vichai does not want to acquire more AAV shares as the tender offer price is 30% below the latest closing price of Bt6.00. We see this deal positive to AAV with the new owner who has much more financial power than the old one. Based on EPS from Bloomberg consensus forecast at Bt0.40 in 2016, equivalent to 10.6x PER at the price of Bt4.2, compared to its EPS growth of 81%YoY. The share valuation is undemanding.
Global issues
UK poll shake out some risk-off trades: There is still no clear-cut indication as to how the Brexit referendum might go and Europe will fare if the British really exit, and as a result, uncertainty looms large. Latest ICM poll shows 47% of Britons would vote to remain in EU while 53% would vote to leave. (AWS and Guardian)
UK poll shake out some risk-off trades: There is still no clear-cut indication as to how the Brexit referendum might go and Europe will fare if the British really exit, and as a result, uncertainty looms large. Latest ICM poll shows 47% of Britons would vote to remain in EU while 53% would vote to leave. (AWS and Guardian)
US Treasury yields fell to a four-month low on Monday as increased fears about Britain exiting the EU weighed on investor risk appetite and sovereign debt yields in developed markets around the globe fell to all-time lows. Benchmark 10-year notes rose 7/32 in price to yield 1.616%, after earlier falling to 1.608%, the lowest since Feb. 11. (Reuters)
The safe-haven yen firmed broadly on Monday, hitting a three-year peak against the euro and sterling and a six-week high versus the dollar on Brexit concerns. The dollar fell against the yen to a six-week trough of ¥105.75 before settled down 0.7% at ¥106.21. (Reuters)
USA
Wall Street shares tumbled again on Monday dragged down by Brexit concerns and a weekend attack by a gunman at a nightclub in Orlando. Investors braced for the Brexit vote on 23 June, just a week away, and major US economic data this week. US economic data due later today includes the all-important retail sales. (Reuters)
Wall Street shares tumbled again on Monday dragged down by Brexit concerns and a weekend attack by a gunman at a nightclub in Orlando. Investors braced for the Brexit vote on 23 June, just a week away, and major US economic data this week. US economic data due later today includes the all-important retail sales. (Reuters)
Europe
European shares fell to their lowest level for more than three months on Monday, hit by a sell-off in cyclical stocks and widespread unease in markets over a possible British exit from the EU. (Reuters)
European shares fell to their lowest level for more than three months on Monday, hit by a sell-off in cyclical stocks and widespread unease in markets over a possible British exit from the EU. (Reuters)
Asia
Fitch Ratings affirmed Japan's senior unsecured local-currency bonds rating at 'A' and country’s ceiling at ‘aa’ and foreign currency debt at ‘f1’. However, Fitch downgraded the country’s outlook to ‘negative’ from ‘stable’ on declining confidence in Japanese authorities' commitment to fiscal consolidation. (Reuters)
Growth in China's fixed-asset investment slipped to 9.6% in Jan-May, below 10% for the first time since 2000 and lower than 10.5% during Jan-Apr. Investment by private firms slowed to a record low, with growth cooling to 3.9% from 5.2% in Jan-Apr and double-digits last year. Private investment so far this year has been the slowest since 2012. (Reuters)
Fitch Ratings affirmed Japan's senior unsecured local-currency bonds rating at 'A' and country’s ceiling at ‘aa’ and foreign currency debt at ‘f1’. However, Fitch downgraded the country’s outlook to ‘negative’ from ‘stable’ on declining confidence in Japanese authorities' commitment to fiscal consolidation. (Reuters)
Growth in China's fixed-asset investment slipped to 9.6% in Jan-May, below 10% for the first time since 2000 and lower than 10.5% during Jan-Apr. Investment by private firms slowed to a record low, with growth cooling to 3.9% from 5.2% in Jan-Apr and double-digits last year. Private investment so far this year has been the slowest since 2012. (Reuters)
China’s factory output grew 6% YoY in May, the same as in April and marginally better than expected. (Reuters)
China’s retail sales growth, which captures both private and government purchasing, slowed to 10.0% YoY in May. Analysts had forecast it would be unchanged from April at 10.1%. (Reuters)
Commodities
Oil prices edged lower on Monday, pressured by gloomy economic prospects in Europe and Asia, but supported by ongoing supply outages in Nigeria. Brent crude oil futures settled down 19 cents (-0.4%) at US$50.35 per barrel. US crude ended 19 cents (-0.4%) lower at US$48.88 a barrel. (Reuters)
Oil prices edged lower on Monday, pressured by gloomy economic prospects in Europe and Asia, but supported by ongoing supply outages in Nigeria. Brent crude oil futures settled down 19 cents (-0.4%) at US$50.35 per barrel. US crude ended 19 cents (-0.4%) lower at US$48.88 a barrel. (Reuters)
Gold rose for the fourth straight session on Monday, hitting its highest since mid-May, driven by rising investor risk aversion before central bank meetings this week and the Brexit vote on 23 Jun. Spot gold was up 0.6% at US$1,281.96 an ounce, off an earlier peak of US$1,287. US gold futures for August delivery settled up 0.9% at US$1,286.90 an ounce. (Reuters)
Source: aws.co.th / settrade.com
