Expect the SET to trade higher today, joining a global stock rally as markets see solid US economy from last Friday’s job reports still and rising prospects for stimulus actions from major countries and central banks, especially Japan and the ECB. Political uncertainty in Britain have dropped by a certain extent with a new British PM. Apparently, risk appetite has been on the rise at the expense of safe-haven demand. Adding to a positive tone, on the local front, the Cabinet gave the green light to the Bt100bn Thailand Future Fund (TFF) with Bt10bn immediate investments in many road and highway projects, coupled with a new Bt15,000 tax deduction scheme on OTOP products.
Local issue
Ads spending down 8% in first half. According to the survey by Nielsen Thailand, the mainstream media in country were still being affected by the fragile domestic economy as big companies like Unilever (Thai) Holdings and Toyota Motor Thailand decided to cut their advertising budgets. 1H16 advertising expenditure fell by 7.86% to Bt55.97bn from Bt60.74bn a year earlier. Only out-of-home media and internet advertising saw a growth. (The Nation)
Ads spending down 8% in first half. According to the survey by Nielsen Thailand, the mainstream media in country were still being affected by the fragile domestic economy as big companies like Unilever (Thai) Holdings and Toyota Motor Thailand decided to cut their advertising budgets. 1H16 advertising expenditure fell by 7.86% to Bt55.97bn from Bt60.74bn a year earlier. Only out-of-home media and internet advertising saw a growth. (The Nation)
Comment: Ads spending should recover as we see clearer signs of economic recovery such as a mitigation of drought concerns and positive progress on expansionary fiscal policies.
Cabinet gave nod to initial TFF. The cabinet approved earmarking Bt10bn as seed money for the Bt100bn Thailand Future Fund (TFF), which will invest in three road projects in the first stage including Bangkok-Rayong motorway, the outer ring road linking Ayutthaya and Pattaya, and expressway linking Rama III Road-Dao Kanong-Kanchanaphisek Road. Initially, of the Bt10.0bn which will be raised solely from Finance Ministry, Bt1.0bn fund will be derived from Vayupak Fund 1 to set up a revolving fund to guarantee a minimum return to TFF unit holders. (Bangkok Post)
New Bt15,000 tax deduction scheme approved. The cabinet yesterday approved a special tax break policy allowing taxpayers to deduct up to Bt15,000 spent on OTOP products from 1-31 Aug from their personal income tax. Currently, there are 40,699 OTOP entrepreneurs with 80,000 product items available nationwide. (Bangkok Post)
Comment: The move is a part of the state’s effort to stimulate revenues and create jobs for local people, eventually strengthening communities.
1H16 new business registrations inched up. Direct-general of the Business Development Department said new business registrations totaled 31,792 during 1H16, slightly up 1% YoY, with the combined registered capital of Bt127bn, up 35% YoY. The new registrations were particularly concentrated in general construction, real estate, machinery sales, food and restaurants, and business consulting. (Bangkok Post)
Comment: The figure is expected to show more improvement in 2H16 in light of the government’s infrastructure investments, as well as the Secured Transactions Act, which recently came into force allowing SMEs and startups to use inventory, raw materials, and intellectual property as collateral.
Global issues
Britain's parliament is to debate a petition signed by more than 4mn members of the public calling for a second referendum on EU membership on 5 Sep, but will not take a decision on whether to re-run last month's vote. Since Britain voted by 52% to 48% to leave the bloc, many people have called for another referendum to be held. Theresa May, who will take over from David Cameron as PM on Wednesday, has ruled out a second vote. Parliament's petitions committee stressed it was not supporting the call for another referendum. (Reuters)
US Treasury yields rose on Tuesday as expectations of new stimulus in Japan boosted stocks and reduced demand for safe-haven bonds. Benchmark 10-year notes ended down 24/32 in price to yield 1.513%, up from 1.434% late on Monday. (Reuters)
The dollar rose to its highest level against the yen in more than two weeks on Tuesday, as risk appetite continued to drive sentiment after Japan's ruling coalition won a weekend election. The dollar jumped 1.95% against the yen to ¥104.79, its strongest level since 24 Jun, when the British referendum result roiled global markets. (Reuters)
USA
Wall Street shares broadly rose on Tuesday, with the S&P500 and DJIA hitting record highs, as cyclical stocks like technology, materials and energy led the market up on more confidence in the US economy after last Friday’s upbeat job report. A sharp rebound in crude prices boosted energy shares. (Reuters)
US wholesale inventories rose marginally in May as automobile stocks tumbled, suggesting inventory investment likely remained a drag on economic growth in 2Q16. Wholesale inventories edged up 0.1% from an upwardly revised 0.7% gain in April. Economists had forecast wholesale inventories rising 0.2% in May. (Reuters)
The US economy likely expanded at a 2.3% rate YoY in 2Q16 following the latest data on wholesale inventories, the Atlanta Federal Reserve's GDPNow forecast model showed on Tuesday. The latest GDP estimate was slightly lower than the 2.4% figure calculated on 6 Jul. (Reuters)
Europe
European shares rose on Tuesday, with Italian bank stocks outperforming on expectations of measures to tackle their bad debts, while better earnings also helped carmakers' shares. (Reuters)
Asia
Hague rules against China: The Permanent Court of Arbitration in The Hague on Tuesday rejected China's claims to economic rights across large swathes of the South China Sea in a ruling that will be claimed as a victory by the Philippines. China boycotted the case brought by the Philippines and reiterated it will not be bound by any ruling. Beijing said the ruling will intensify conflict and even confrontation. (Reuters)
Hague rules against China: The Permanent Court of Arbitration in The Hague on Tuesday rejected China's claims to economic rights across large swathes of the South China Sea in a ruling that will be claimed as a victory by the Philippines. China boycotted the case brought by the Philippines and reiterated it will not be bound by any ruling. Beijing said the ruling will intensify conflict and even confrontation. (Reuters)
Confidence of China stock investors hits 6-mth high in June: An index for China stock investor confidence hit 54.9 in June, an increase of 14.9% from May and the highest level since January, according to a survey by state-owned China Securities Investor Protection Funds. (Reuters)
Japanese households' inflation expectations weakened in the three months to June, keeping alive expectations of additional stimulus. The ratio of households that expect prices to rise a year from now stood at 72.4% in June, down from 75.7% in March, the BOJ's quarterly survey showed on Tuesday. A separate index measuring households' confidence about the economy stood at minus 27.3 in June, worsening from minus 22.5 in March. (Reuters)
Commodities
Oil prices surged 5% on Tuesday, the biggest daily gain since April, as investors' covering of short positions and a technical rebound helped lift the market off two-month lows. Brent crude futures settled up US$2.22 (+4.8%) at US$48.47. US crude futures settled up US$2.04 (+4.6%) at US$46.80 a barrel. However, crude futures pared gains in post-settlement trade after industry group American Petroleum Institute (API) reported a surprise build of 2.2mn barrels in US crude stockpiles last week. (Reuters)
Gold saw its biggest one-day fall in three weeks on Tuesday as global equities rallied on easing political uncertainty in Britain and hopes for more economic stimulus, which in turn curbed demand for safe-haven assets. Spot gold fell as much as 1.9% to US$1,329.75 an ounce and was down 1.6% at US$1,332.86. (Reuters)
Base metals rise: Zinc touched a 13-month peak and nickel hit the highest since last October on Tuesday as speculators piled in after the selection of a new PM for Britain and on hopes of more stimulus. Benchmark LME zinc closed 2.5% higher at US$2,193 a tonne, the strongest since June 1 last year. (Reuters)
Source: aws.co.th / settrade.com
