Thai shares look set to trade higher today taking a cue from Friday’s moderate gains on Wall Street due to upbeat US data and the Brexit pushing the Federal Reserve to stay easy or for other central banks to become even easier. Rising crude prices should bolster energy shares. Most local factors today are positive. The MRTA’s opening bids for three mass transit routes should bolster all infrastructure-related players, mass transit operators, contractors, building material companies, etc. Improving inflation, the delay in VAT increase and tax break for big companies that assist SMEs are all encouraging factors.
Local issue
Consumer prices edged up for the third straight month in June. Commerce Ministry reported consumer prices based on 450 products and services rose 0.38% YoY in June, easing from a 0.46% gain in May which was a 17-month high, and a 0.07% increase in April. June core inflation was 0.8% on an annual basis. For the first six months, overall prices contracted 0.09% YoY, while core inflation was 0.73% YoY. The ministry maintained its full-year inflation forecast this year at 0-1%. (Bangkok Post)
Consumer prices edged up for the third straight month in June. Commerce Ministry reported consumer prices based on 450 products and services rose 0.38% YoY in June, easing from a 0.46% gain in May which was a 17-month high, and a 0.07% increase in April. June core inflation was 0.8% on an annual basis. For the first six months, overall prices contracted 0.09% YoY, while core inflation was 0.73% YoY. The ministry maintained its full-year inflation forecast this year at 0-1%. (Bangkok Post)
Local issue
Consumer prices edged up for the third straight month in June. Commerce Ministry reported consumer prices based on 450 products and services rose 0.38% YoY in June, easing from a 0.46% gain in May which was a 17-month high, and a 0.07% increase in April. June core inflation was 0.8% on an annual basis. For the first six months, overall prices contracted 0.09% YoY, while core inflation was 0.73% YoY. The ministry maintained its full-year inflation forecast this year at 0-1%. (Bangkok Post)
Consumer prices edged up for the third straight month in June. Commerce Ministry reported consumer prices based on 450 products and services rose 0.38% YoY in June, easing from a 0.46% gain in May which was a 17-month high, and a 0.07% increase in April. June core inflation was 0.8% on an annual basis. For the first six months, overall prices contracted 0.09% YoY, while core inflation was 0.73% YoY. The ministry maintained its full-year inflation forecast this year at 0-1%. (Bangkok Post)
Tax break to big companies that assist SMEs. The government is considering imposing a measure that would allow large corporations to request tax deductions on expenses for helping SMEs. Examples of items that can be booked as expenses include being a loan guarantor and supporting SMEs with computer software. (Bangkok Post)
Comment: This is a part of the state’s effort to strengthen SMEs and the country’s economy as a whole, as there are up to 2mn SMEs and they are the group hit the most by the fragile economy.
CP Group declares intent to join high-speed rail. Charoen Pokphand Group (CP) chairman and chief executive Dhanin Chearavanont said the company is ready to jointly develop the 194-kilometre Bangkok-Rayong high-speed rail route worth Bt153bn, as requested by the government under PPP program. However, the group wants to consider the project details first. (Bangkok Post)
Global issues
US Treasuries rallied on Friday, with the 30-year yield hitting its lowest since the 1950s in a worldwide scramble for bonds on expectations of weak global growth and more policy stimulus from major central banks. Benchmark US 10-year Treasury notes were up 10/32 in price to yield 1.456%, down more than 3 basis points. The US 30-year bond yield touched 2.189% on Friday, the lowest level since the 1950s. (Reuters)
The US dollar tumbled against the yen on Friday as a plunge in benchmark US Treasury yields reduced the attractiveness of US debt and markets expected dovish Federal Reserve policy through this year, while sterling dipped. The dollar was last down 0.8% at ¥102.47. The dollar index was last down 0.5% at 95.700. (Reuters)
USA
Wall Street shares rose modestly on Friday, for a fourth straight day of gains and erased almost all their losses stemming from the Brexit vote, helped by encouraging US manufacturing data. (Reuters)
Wall Street shares rose modestly on Friday, for a fourth straight day of gains and erased almost all their losses stemming from the Brexit vote, helped by encouraging US manufacturing data. (Reuters)
US factory activity expanded at a healthy pace in June. The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.2 from 51.3 the month before. The reading was above expectations of 51.4 from a Reuters poll and 50 threshold separating expansion and contraction. (Reuters)
US construction spending fell 0.8% in May after a downwardly revised 2.0% drop in April. The revised April drop was the largest since January 2011. Economists had forecast construction spending rising 0.6%. May construction outlays were up 2.8% YoY. (Reuters)
The final Markit US Manufacturing PMI registered 51.3 in June, up from 50.7 in May and the highest reading for three months. The earlier ‘flash’ reading for June was 51.4. Higher levels of production, new orders and employment all helped to boost the headline index, while an accelerated fall in stocks of purchases was the only negative influence. (Markit)
Europe
European shares rose on Friday, lifted by expectations that the ECB would take action to support markets in order to ease worries about the fallout from the Brexit. (Reuters)
European shares rose on Friday, lifted by expectations that the ECB would take action to support markets in order to ease worries about the fallout from the Brexit. (Reuters)
ECB ready to act: ECB Executive Council member Benoit Coeure told Le Monde newspaper central banks were ready to act if they felt the Brexit vote threatened financial stability. (Reuters)
Asia
Japan's subdued business mood: Japanese business confidence was subdued in 2Q16, heightening pressure on the BOJ to roll out more stimulus. The BOJ's quarterly tankan survey showed the headline index for big manufacturers' sentiment stood at plus 6, unchanged from 1Q16. The survey's big non-manufacturers' sentiment index worsened to plus 19 from plus 22. (Reuters)
Japan's subdued business mood: Japanese business confidence was subdued in 2Q16, heightening pressure on the BOJ to roll out more stimulus. The BOJ's quarterly tankan survey showed the headline index for big manufacturers' sentiment stood at plus 6, unchanged from 1Q16. The survey's big non-manufacturers' sentiment index worsened to plus 19 from plus 22. (Reuters)
Japan’s core CPI fell in May: Japan’s core CPI, which strips away the effect of volatile fresh food costs, fell 0.4% YoY in May, marking the biggest drop since the BOJ deployed its huge asset-buying programme in 2013. (Reuters)
China will hold military drills around the disputed Paracel Islands in the South China Sea, ahead of a decision by an international court in a dispute between China and the Philippines. Tensions have been rising ahead of a July 12 ruling by an arbitration court hearing the dispute between China and the Philippines over the South China Sea in the Dutch city of The Hague. (Reuters)
Hong Kong – China tensions: Tens of thousands of Hong Kong residents marched in protest on the 19th anniversary of the financial hub's return to Chinese rule on Friday as tensions simmer against Chinese authorities over the abductions of Hong Kong booksellers. (Reuters)
Commodities
Oil prices surged on Friday, and Brent crude posted its largest weekly gain since mid-May, as investors positioned for the start of 3Q16 trading while a weaker dollar boosted prices of most commodities. Brent crude futures settled up 64 cents (+1.3%) at US$50.35 a barrel. US crude futures rose 66 cents (+1.4%) to settle at US$48.99. (Reuters)
Oil prices surged on Friday, and Brent crude posted its largest weekly gain since mid-May, as investors positioned for the start of 3Q16 trading while a weaker dollar boosted prices of most commodities. Brent crude futures settled up 64 cents (+1.3%) at US$50.35 a barrel. US crude futures rose 66 cents (+1.4%) to settle at US$48.99. (Reuters)
Gold rose 1% on Friday and was heading for its fifth weekly gain, supported by a weaker dollar and prospects for further monetary policy easing in the wake of the Brexit. Spot gold rose 1.2% at US$1,337.6. US gold futures for August delivery settled up 1.4% at US$1,339. (Reuters)
Source: aws.co.th / settrade.com
