Shares recover in volatile week for dollar, crypto

Shares recover in volatile week for dollar, crypto

Recap: Global shares rose yesterday amid optimism fed by strong US economic and earnings reports, while Covid restrictions receded in some countries. The upturn capped a volatile week in which worries about inflation and an early US interest-rate hike pushed the dollar near a three-month low, the cryptocurrency market tanked while gold and silver shone as safe-haven assets.

The SET index moved in a range of 1,529.69 and 1,570.37 points this week before closing yesterday at 1,552.44, up by 0.19% from the previous week, in daily turnover averaging 90.25 billion baht.

Retail investors were net buyers of 4.95 billion baht, institutional investors bought 1.73 billion and brokerage firms purchased 1.49 billion baht worth of shares. Foreign investors were net sellers of 8.18 billion baht.

Newsmakers: The US economic recovery showed signs of hitting some turbulence as shoppers curbed their spending last month and manufacturing slowed due to supply bottlenecks.

Bitcoin plunged below $39,000 for the first time in more than three months on Wednesday after China said cryptocurrencies would not be allowed in transactions. Beijing warned investors against speculative trading in tokens, even though China powers most of the world’s crypto mining.

The US Treasury Department on Thursday called for a tax on transfers of cryptocurrencies between businesses as it looks to raise revenue to pay for $1.6 trillion in social spending.

Gold prices touched a four-month high of $1,890 an ounce, as rising inflation expectations and the Fed’s pledge to keep interest rates low for longer revive interest in the metal.

Steel prices are at record highs in the US amid a broader scramble for commodities that also include lumber and aluminium, as businesses grapple with scant inventories, empty supply chains and long waits for raw materials.

China next month will start taxing imports of “dirty fuels” used to make lucrative but lower-quality products with high emissions, citing pollution concerns.

The Japanese government has barred the entry of all foreign travellers who have visited Thailand and six other countries in an effort to curb the spread of the coronavirus.

A travel bubble between Hong Kong and Singapore due to open on May 26 has been postponed for a second time, after a spike in cases in Singapore.

Japan is preparing to approve Moderna and AstraZeneca vaccines, to speed up an inoculation programme that now covers just 3.9% of its population — the slowest rate among rich countries.

Indonesia has temporarily halted distribution of one batch of AstraZeneca vaccine to run tests for sterility and toxicity following reports of adverse effects after immunisations.

The Thai economy shrank by 2.6% year-on-year in the first quarter — an improvement from a 4.2% contraction in the previous quarter — but the near-term outlook remains weak.

In light of the new Covid wave, the National Economic and Social Development Council has cut its full-year growth forecast to between 1.5% and 2.5%, from 2.5% to 3.5% predicted in February.

Even less optimistic is the Joint Standing Committee on Commerce, Industry and Banking, which now expects GDP growth of just 0.5% to 2% at best, despite brighter export prospects.

Thai Airways International creditors on Wednesday approved its debt rehabilitation plan, paving the way for payment extension and unpaid interest waiver on at least 170 billion baht in debt. It also calls for 50 billion in new capital, but the government is cool to helping the carrier access fresh cash.

The Thai financial system has become more vulnerable due to negative shocks from the latest coronavirus outbreak and significant risks to the economy remain, minutes of the central bank’s last meeting showed on Wednesday.

The Revenue Department is concerned that corporate income tax revenue in the 2021 fiscal year will miss its target. In the first six months to March 31, corporate tax totalled 735 billion baht, 9.4% below the target and down 8.7% from than the same period in fiscal 2020.

The Bank of Thailand says it is concerned with the expected higher number of non-performing loans of tourism-related businesses in the second quarter.

The Federation of Thai Industries (FTI) is bringing back its “Faster Payment” scheme to urge large companies to speed up debt repayments in a fresh attempt to help their trading partners — mostly small and medium-sized enterprises (SMEs) — solve liquidity problems.

Employer and employee contributions to the Social Security Fund (SSF) will be halved to 2.5% between June and August to help those struggling financially because of the pandemic.

Despite Covid outbreaks, Thailand’s fresh fruit export prospects remain promising, particularly in China, Vietnam and Hong Kong. The International Trade Promotion Department expects fruit shipments to grow 17% this year to 122 billion baht.

Domestic car sales surged 93% in April from a year earlier to 58,132 vehicles, coming off a very low base last year when the country was in a full lockdown, the Federation of Thai Industries said.

The government’s electric vehicle (EV) promotion policy and pandemic-induced concerns about a degraded environment are expected to help Sharge Management Co make an exponential leap in its EV charger sales to 20,000 from 250 units within five years.

Coming up: New Zealand will release first-quarter retail sales on Monday. Thailand will release April trade data on Tuesday, Germany will release first-quarter GDP and the US will release April new home sales and May consumer confidence.

The SET will be closed on Wednesday for the Visakha Bucha holiday. The US on Wednesday will update crude oil inventory data, and New Zealand will announce an interest rate decision. On Thursday, China will release April industrial profits and Germany will release the June consumer sentiment outlook. The same day, the US will release first-quarter GDP data, April durable goods orders and pending home sales.

Japan will release May inflation data and unemployment on Friday and the US will release April producer prices and personal spending data. The same day, the US will announce April retail inventories and May consumer sentiment.

Stocks to watch: Maybank Kim Eng Securities recommends shares of firms with prospects of good performance in the second quarter such as ASK, BCH, MTC, IVL and WICE.

Asia Plus Securities (ASPS) recommends increasing investment in stocks expected to benefit from the lifting of Covid curbs in cities, such as export-focused businesses and insurers, as some funds have started to flow into these groups of stocks whose prices remain low due to the impact from the pandemic. In addition, they are likely to recover more clearly once the vaccine roll-out gathers momentum. The brokerage’s picks from the group are STEC, MTC, MAJOR, BDMS, MINT, SAT and BLA.

Technical view: DBS Vickers Securities sees support at 1,520 points and resistance at 1,570. Capital Nomura Securities sees support at 1,529 and resistance at 1,570.