Thai shares are poised to trade firmer today as a call for fresh policy stimulus in Japan and the UK coupled with upbeat US job data prompted global stock rallies while political uncertainty in the UK has eased to some extent after the Britons have found a new PM. Nevertheless, market gains today are likely to be limited by some profits taking after the successive rally the last couple of days. Locally, while investors’ sentiment surged from the last survey, the TAT for the first time cut its 2017 tourism revenue projection on concerns over the country’s economic and political situations after the constitution referendum early next month. So, local factors are more in the neutral zone today.
Local issue
TAT slightly cut FY17 income projection. The board of the Tourism Authority of Thailand (TAT) has trimmed its FY17 income forecast for local tourism from Bt1tn to Bt950bn and revenue from overall tourism from Bt2.89tn to Bt2.84tn. The reason for the revision is concerns over economic problems as well as the political situation after the charter referendum. (Bangkok Post) Comment: Tourism-related income from foreign visitors, however, is still optimistically maintained at Bt1.89tn, +9.8% YoY, based on the projected number of foreign tourist arrivals of 36mn next year compared with expected 34mn this year.
TAT slightly cut FY17 income projection. The board of the Tourism Authority of Thailand (TAT) has trimmed its FY17 income forecast for local tourism from Bt1tn to Bt950bn and revenue from overall tourism from Bt2.89tn to Bt2.84tn. The reason for the revision is concerns over economic problems as well as the political situation after the charter referendum. (Bangkok Post) Comment: Tourism-related income from foreign visitors, however, is still optimistically maintained at Bt1.89tn, +9.8% YoY, based on the projected number of foreign tourist arrivals of 36mn next year compared with expected 34mn this year.
Superboard approved three projects. The State Enterprise Policy Commission yesterday gave the nod to three massive projects of the state enterprises. These include PEA’s construction project of undersea cables to Ko Samui and Ko Tao worth a total of Bt3.9bn, AOT’s development project of Phuket International Airport worth Bt8.9bn, and SRT’s operation of Light Red and Dark Red Line with the budget of Bt44.2bn. (Prachachat)
Comment: The undersea cables will benefit local networking contractors and distributors including SYMC, ILINK, INET and ALT, while AOT’s project might benefit local civil work contractors, STEC is working on the Phuket International Airport Expansion. The last project we believe is being considered by the government and may take a long time until bidding opens.
Investor sentiment surged. Federation of Thai Capital Market Organizations (FETCO) reported Investor Confidence Index (ICI) for the next three months to September jumped by 11.75% to 104.46 from 93.48 in June. Confidence of foreign investors increased the most, rising 28.6% to 100 points. Retail investors' confidence increased by 12.6% to 106.35 points, while that of institutional investors fell by 8.5% but is still in neutral territory at 100. (Bangkok Post)
Global issues
US Treasury yields rose on Monday after Japan prepared a new round of stimulus, boosting stocks and reducing demand for safe-haven US bonds. Benchmark 10-year notes ended down 21/32 in price to yield 1.434%, up from 1.365% late on Friday. (Reuters)
US Treasury yields rose on Monday after Japan prepared a new round of stimulus, boosting stocks and reducing demand for safe-haven US bonds. Benchmark 10-year notes ended down 21/32 in price to yield 1.434%, up from 1.365% late on Friday. (Reuters)
The dollar rose to a 10-day high against the yen on Monday, following Japanese PM Shinzo Abe's call for a fresh round of fiscal stimulus after a victory for his ruling coalition. The dollar rose as much as 2.3% to ¥102.87, its highest level since 1 Jul. It was the dollar's biggest one-day percentage gain against the yen since 31 Oct, 2014. It was last up 2.25% at ¥102.78. (Reuters)
USA
Wall Street shares finished higher on Monday bolstered by strong economic data - including the upbeat payrolls report for June and the expectation that corporate earnings are turning a corner for the better. Defensive utilities, telecoms and consumer staples led the way up. Still, such outperformance in high-yielding areas of the market underscores investor concerns over the economy's resilience after the Brexit vote. (Reuters)
Wall Street shares finished higher on Monday bolstered by strong economic data - including the upbeat payrolls report for June and the expectation that corporate earnings are turning a corner for the better. Defensive utilities, telecoms and consumer staples led the way up. Still, such outperformance in high-yielding areas of the market underscores investor concerns over the economy's resilience after the Brexit vote. (Reuters)
Europe
A top European share index rose on Monday to post its highest close since Britain voted to leave the EU, after Theresa May won the race to succeed David Cameron as PM, reducing political uncertainty in the UK. (Reuters)
Britain's May wins PM race: Interior minister Theresa May will become Britain's PM on Wednesday. May, 59, will succeed David Cameron, who announced he was stepping down after Britons unexpectedly voted last month to quit the EU. Britain's planned withdrawal has weakened the 28-nation bloc, created huge uncertainty over trade and investment, and shaken financial markets. May favoured remaining in the EU but she has made clear there is no going back on the result of the 23 Jun referendum. (Reuters)
Italy's troubled banks do not represent an acute crisis and resolving their problems will be more of a gradual process than a big fix, Eurogroup President Jeroen Dijsselbloem said on Monday. (Reuters)
Asia
Japanese PM Shinzo Abe ordered a new round of fiscal stimulus spending after a crushing election victory over the weekend as evidence mounted the corporate sector is floundering due to weak demand. Abe did not give details on the size of the package. The government was ready to spend more than ¥10tn (US$100bn), a ruling party member said before the election. (Reuters)
Japanese PM Shinzo Abe ordered a new round of fiscal stimulus spending after a crushing election victory over the weekend as evidence mounted the corporate sector is floundering due to weak demand. Abe did not give details on the size of the package. The government was ready to spend more than ¥10tn (US$100bn), a ruling party member said before the election. (Reuters)
Maglev train construction as part of stimulus package: Japanese PM Shinzo Abe said on Monday the government will speed up construction of bullet trains and push forward by up to eight years the completion of maglev train (magnetic levitation train) networks as part of a stimulus package to support the economy. (Reuters)
Legal ruling looms in South China Sea dispute: The Permanent Court of Arbitration in The Hague will announce later today their ruling in a case brought by the Philippines against China over its actions in the South China Sea. However, the UN and PCA have no enforcement body and it remains unclear what can be done when China ignores the ruling. The dispute has intensified political and military rivalry across the region between China and the US. (Reuters)
Upbeat China auto sales: Vehicle sales in China rose 8.1% in 1H16, well ahead of full-year predictions with the industry cautiously optimistic that positive sales momentum will continue. Sales grew 14.6% in June, the highest monthly growth since December 2015. The main uncertainty hanging over the market was if the tax cut on cars with engines under 1.6 litres would expire or be extended. If it expires on 31 Dec, consumers may rush to buy cars this year to cash in on the incentive, at the expense of next year's sales, while extending the cut would push down 4Q16 sales. (Reuters)
Commodities
Oil prices fell on Monday, hitting two-month lows, pressured by rising Canadian supplies, a higher US oil rig count and cuts in bullish hedge fund bets on crude. Brent crude futures settled down 51 cents (-1.1%) at US$46.25 per barrel. US crude futures slipped 65 cents (-1.45) to settle at US$44.76 a barrel. (Reuters)
Oil prices fell on Monday, hitting two-month lows, pressured by rising Canadian supplies, a higher US oil rig count and cuts in bullish hedge fund bets on crude. Brent crude futures settled down 51 cents (-1.1%) at US$46.25 per barrel. US crude futures slipped 65 cents (-1.45) to settle at US$44.76 a barrel. (Reuters)
Gold fell on Monday as stock markets rallied on the back of Friday's upbeat US jobs data and the prospect of more monetary stimulus from central banks, while the dollar rose against a basket of currencies. Spot gold was down 0.8% at US$1,355.50 per ounce, having touched its highest since March 2014 last week at US$1,374.91 an ounce. (Reuters)
Source: aws.co.th / settrade.com
