Latest news with #SET
Bangkok Post
14 hours ago
- Business
- Bangkok Post
Navigating twin crises and tightened monetary policy
Financial markets in Thailand are confronting an unprecedented twin crisis, as political uncertainty from the audio clip scandal converges with escalating Middle East tensions that have rattled global capital markets. This dual crisis severely affected Thailand's economy, with the Thai stock index plunging to its lowest point in five years, declining nearly 24% year-to-date to become the world's worst-performing equity market. Thailand's political crisis stems from the withdrawal of the Bhumjaithai Party and its 69 MPs from the government coalition, creating political uncertainty. As of Friday, political pressure had pushed the SET index down, testing the critical support level of 1,085 points. Our analysis identifies three main scenarios with varying economic implications. The first scenario involves immediate parliamentary dissolution, though we reduced the probability of this outcome as the government is likely to retain its majority. This scenario would result in GDP contracting by 0.5 percentage points due to disruption of the budget process -- both fiscal 2025 disbursement and passage of the 2026 budget. The second scenario, which we consider the base case with increased probability, involves a cabinet reshuffle followed by dissolution after the fiscal 2026 budget is passed, with the economic impact consisting of GDP shrinking by 0.3 percentage points. The third scenario considers resignation or removal of the prime minister due to governance issues, carrying a moderate probability and resulting in a growth slowdown of 0.3-0.5 percentage points. Under this scenario, the Bank of Thailand may need to accelerate interest rate cuts by 50 to 75 basis points to support the economy amid mounting pressure from anti-government demonstrations and various legal developments that could escalate the situation. The US strike on Iran's nuclear facilities on June 22 significantly altered the Middle East conflict landscape. Brent crude initially surged 5.7% to $81.40 per barrel before falling below $70 as immediate supply disruption fears subsided. The Israel-Iran conflict began to ease following a ceasefire announcement with US mediation. Analysts suggest Iran's military effectiveness may now be diminished, while the fragile domestic economy is experiencing inflation near 40%. The US is reportedly preparing to open negotiations with Iran next week, which requires monitoring. MIDEAST SCENARIOS We forecast the probability of three Middle East scenarios. The base scenario, with 40% probability, anticipates temporary oil price increases before a decline, resulting in Thai economic growth of 1.4% and inflation of 0.5%. The adverse scenario, also with 40% probability, involves oil prices sustained above $85 per barrel, leading to growth slowing to 1.2%, while inflation increases to 0.8%. The crisis scenario, with a 20% probability, assumes Iran decides to close the Strait of Hormuz, potentially pushing oil prices to $130 or $140, resulting in economic growth of only 1% and inflation reaching 1%. In Thailand, the central bank's Monetary Policy Committee (MPC) voted 6-1 this week to maintain the policy rate at 1.75%, with one member favouring a reduction to 1.50% to support the slowing economy. According to the MPC, Thailand's economy in the first half of 2025 will expand better than projected, driven by exports, particularly to the US. As a consequence, the regulator revised its full-year GDP growth forecast to 2.3% from 2.0% earlier. However, the central bank believes export momentum is temporary, with heavy frontloading of shipments to the US to avoid higher tariffs. The economy faces risks in the second half from US tariffs, weak domestic demand and declining consumption amid reduced household income and confidence. The 2026 economic growth forecast was downgraded to 1.7% from 1.8%. We believe Thailand's economy will slow significantly in the second half, risking a technical recession. Thailand faces substantial risk of higher US import tariffs compared with other trading partners. Government budget disbursement remains below target, and despite expectations of acceleration in the second half, including 115 billion baht in stimulus projects, disbursement is expected to remain delayed due to uncertainty about government stability, preventing the public sector from fully driving the economy at a time of weak private demand. Contracting credit will further pressure domestic demand. With inflation clearly below the central bank's 1-3% target range and with no signs of demand-side inflationary pressure, there is room for further monetary policy relaxation. We maintain our view that the central bank should cut the policy rate at least twice more this year to 1.25% to alleviate household and business interest burdens, reduce tight financial conditions, and support a stable demand recovery. If the regulator doesn't cut rates in the third quarter, we see delays potentially weakening the economy, ultimately requiring more aggressive rate cuts later and further increasing risks to future economic stability. In terms of investment strategy, the SET is expected to remain volatile amid negative domestic and external factors as outlined above. However, we believe the SET index below 1,100 points, representing a 2025 price/earnings ratio of less than 12 times, is appropriate for medium- to long-term investment through gradual accumulation. Our investment strategy remains "selective buy" across four key areas. First, we recommend defensive stocks with low volatility that are expected to resist external market turbulence, specifically DIF, BDMS and BCH. Second, quality dividend stocks from the SET50 with SETESG ratings of A or higher should be considered to generate short-term cash flow, as these companies are expected to pay interim dividends from first-half 2025 profits with yields exceeding 2%, particularly ADVANC, BBL and PTT. Third, earnings-play stocks with strong profit momentum deserve attention, as we expect normalised second-quarter 2025 profits to grow, with ADVANC, CPALL and BTG leading this category. Finally, for investors with a high risk tolerance seeking trading opportunities amid the Middle East conflict, we recommend stocks benefiting from rising oil prices, specifically PTT and PTTEP.
Bangkok Post
17 hours ago
- Business
- Bangkok Post
Trade deal optimism lifts Asian shares
RECAP: Most Asian stock markets rose on Friday, and a gauge of global equities reached another record high, on trade-deal optimism and increased expectations for US interest-rate cuts this year. Although the global backdrop looks positive, the Thai index dropped more than 2% to move below 1,100 points again as a high degree of local political uncertainty pressured the market. The SET index moved in a range of 1,053.79 and 1,117.64 points this week, before closing on Friday at 1,082.42, up 1.4% from the previous week, with daily turnover averaging 43.07 billion baht. Foreign investors were net buyers of 4.57 billion baht, followed by institutional investors at 2.44 billion and brokerage firms at 1.17 billion. Retail investors were net sellers of 8.18 billion baht. NEWSMAKERS: US Federal Reserve chairman Jerome Powell said the Fed is not in a rush to cut interest rates as it is waiting for more clarity on the impact of tariffs on inflation. The dollar declined amid rising concerns about the independence of the Fed. The Wall Street Journal reported that President Donald Trump has considered announcing a replacement for Mr Powell in September, aiming to undermine his position for the rest of a term that expires in May 2026. The White House denied the report. President Trump said the US would hold a meeting with Iran next week but cast doubt on the need for a diplomatic agreement on the country's nuclear programme. Fed governor Michelle Bowman said she would favour an interest rate cut at the next policy meeting in July so long as inflation pressures stay muted. US Commerce Secretary Howard Lutnick said the US and China have finalised a trade framework, which was "signed and sealed" two days ago. The US is likely to ease trade restrictions on China, especially in the tech sector, while Beijing will relax rules of rare earth exports. Oil prices pared some of the large declines they posted after the Israel-Iran ceasefire, with the market's focus shifting from the Mideast to US trade negotiations. Brent edged higher near $68 a barrel, still down more than 11% for the week. Russia's oil product exports dropped in June to the lowest in eight months amid extended work at refineries supplying Baltic ports, coupled with efforts to stabilise domestic fuel supplies, according to shipping data compiled by Bloomberg. The US consumer confidence index fell 5.5% to 93.0 in June from 98.4 a month earlier, reflecting concerns about inflation and geopolitical tensions, the Conference Board reported. Japanese service-sector inflation hit 3.3% in May, following a revised 3.4% increase in April. Non-financial outbound direct investment from China rose 2.3% year-on-year to $61.6 billion in the first five months of 2025, commerce ministry data showed. The new German budget calls for an increase in military spending to 3.5% of GDP by 2026, and more funding to improve giant infrastructure, as part of an investment push aimed at kick-starting the sluggish economy. Nvidia shares rose 4.3% to $154.31 on Wednesday, giving the chip giant a world-leading market cap of $3.77 trillion, overtaking Microsoft at $3.66 trillion. Germany's privacy regulator has warned Apple and Google that the Chinese AI service DeepSeek, available on their app stores, constitutes illegal content because it exposes users' data to Chinese authorities. Xiaomi Corp shares rose 8% to a record high after the smartphone maker drew strong initial orders for a $35,000 sport utility EV intended to compete with the Tesla Model Y in China. Mexico's central bank announced a fourth straight half-percentage-point cut to its benchmark interest rate to 8% to counter the effects of an expected global economic slowdown. Hong Kong's de-facto central bank spent more than US$1 billion propping up the exchange rate of the HK dollar, as it sought to defend a currency peg that has been strained by volatility in the greenback. Shell Plc said it has no intention of making a takeover offer for BP, refuting an earlier report that two of Europe's biggest companies were in active merger talks. Taiwan has told foreign investors to exit bets on the local dollar, taken through exchange-traded funds, as a 12% gain in its currency threatens its economy and companies. Malaysia's inflation rate rose 1.2% in May from a year earlier, the lowest in 51 months, largely attributed to a decline in global oil prices. The insurer FWD Group, backed by Hong Kong billionaire Richard Li, is looking to raise HK$3.5 billion (US$442 million) through a Hong Kong IPO. Vietnamese lawmakers have approved a plan to establish international financial centres in Ho Chi Minh City and Danang to attract investment and strengthen its global financial standing. Vietnamese Prime Minister Pham Minh Chinh said he expected a trade deal with the US before the July 9 expiration of a pause on imposing a 46% tariff. Finance Minister Pichai Chunhavajira said he would travel to the US for trade talks next week. He also denied reports that Washington had already decided to impose 18% tariffs on Thailand. The Bank of Thailand on Wednesday held its key interest rate unchanged as expected at 1.75%, saving its limited policy space as political uncertainty at home compounds global risks. The BoT lifted its GDP growth forecast for Thailand this year to 2.3% from a previous range of 1.3% to 2%, but lowered its 2026 projection to 1.7% from 1.8%. Roong Mallikamas, a deputy governor at the central bank, Vitai Ratanakorn, president of the Government Savings Bank, are the two finalists to become the next BoT governor. Finance Minister Pichai Chunhavajira will make the final decision, which requires cabinet approval. Shares of Airports of Thailand (AOT) fell on Friday after it confirmed that it had approved extended payment terms for the struggling duty-free giant King Power, which had sought to exit its concessions citing a drop in tourist numbers. Foreign tourist arrivals to June 22 fell 4.24% compared to the same period a year earlier, to about 16 million, the Ministry of Tourism and Sports said. Malaysia topped the table at 2.19 million visitors, followed by China with 2.17 million. The cabinet approved projects worth 115 billion baht, ranging from road building to tourism promotion, as the government seeks to spur the sluggish economy to offset the impact of US tariffs. The cabinet also approved a 1.75-billion-baht domestic tourism subsidy programme, expecting to generate 35 billion baht through an additional 2.67 million local trips during the low season. The Constitutional Court has scheduled a special session for July 1 to consider a Senate petition to remove Prime Minister Paetongtarn Shinawatra following the leak of her conversation with former Cambodian PM Hun Sen. It could suspend her pending a final ruling. The University of the Thai Chamber of Commerce (UTCC) has downgraded its 2025 GDP growth projection to 1.7% from 3%, reflecting escalating risks including US tariffs, the Israel-Iran conflict, border tensions and government instability. Car production in Thailand rose 10.3% in May from a year earlier, the first annual rise in 22 months helped by higher pickup truck output for export, the Federation of Thai Industries (FTI) said. In the first five months, output fell 7.8% year-on-year to 594,492 units. The Administrative Court rejected a petition from the Thai Consumer Council seeking an emergency inquiry and suspension order for 2100MHz and 2300MHz spectrum auctions by The National Broadcasting and Telecommunication Commission (NBTC). The auction will proceed as scheduled on June 29. The Thai Hotels Association asked the government to review the decision to raise the minimum wage to 400 baht a day from July 1, saying it would raise costs by 10-15% and have greater impact in provinces with fewer tourists. Central Retail Corp (CRC) has announced a plan to invest 45-47 billion baht over the next three years, said chief executive Suthisarn Chirathivat. More energy firms are venturing into the data centre business, with BCPG Plc, the power generation arm of Bangchak Corp, becoming the latest to co-invest in sustainable data centre development. COMING UP: On Monday, the UK announces quarterly GDP and Germany releases an inflation update. Tuesday brings euro zone inflation, a speech by Fed chair Jerome Powell and US manufacturing PMI. On Wednesday, the US reports oil inventories and China reports services PMI. On Thursday, the US reports initial jobless claims and non-manufacturing prices. On Friday, Germany releases monthly factory orders. Locally, the Thai General Insurance Association on Thursday holds a briefing on the industry outlook. On Friday, the Thai Bond Market Association discusses the market outlook. STOCKS TO WATCH: InnovestX Securities advises investors to monitor domestic political developments, including a potential no-confidence motion against the PM. Tensions along the Thai-Cambodian border add to the risk. Another factor to watch is the deadline for capital migration from long-term equity funds (LTF) to Thai ESG Extra funds on June 30, which could reduce support for the SET Index. InnovestX recommends BCPG at a fundamental price of 7.80 baht, BCP at 47 baht and ERW at 3 baht. Bualuang Securities forecasts a global economic slowdown in the third quarter, with a potential rebound in the fourth quarter. The recovery is expected to drive up demand and improve petrochemical product spreads. It recommends IVL and PTTGC as beneficiaries of the upcycle.
New Straits Times
a day ago
- Business
- New Straits Times
Thai duty-free giant King Power gets airport payment relief
BANGKOK: Thailand's airport authority said Friday it had approved extended payment terms for duty-free giant King Power, after the company sought to quit its concessions citing a drop in tourist numbers. Airports of Thailand said King Power, which operates at five airports in the country, applied for a relief scheme for firms "facing liquidity problems" on 23 June. AOT told the Stock Exchange of Thailand (SET) its board had granted permission for the firm to split the minimum payments required for its contracts into installments, with the payment window extended by eight months. King Power must provide collateral of 1.45 billion baht (US$44.5 million) "to ensure its financial obligations in case of unexpected events", said a public statement to the SET. AOT shares fell 2.4 percent in Bangkok following the announcement. King Power, shirt sponsors for English football club Leicester City, has a monopoly on duty-free outlets at Bangkok's Suvarnabhumi and Don Mueang airports, as well as those in Phuket, Chiang Mai and Hat Yai. The King Power Group also operates retail outlets and hospitality services around Thailand. Founder Vichai Srivaddhanaprabha led a consortium that bought Leicester City in 2010, and it was under his ownership that the Foxes secured their Premier League title in 2016.
Time of India
5 days ago
- Politics
- Time of India
Can't demand equivalency certificates for UGC-approved courses, says Kerala HC
Kochi: High court has observed that requiring equivalency certificates from state universities for courses approved by UGC and offered by central universities would mark the end of the education system. Justice D K Singh was considering a petition by S Harisankar of Malappuram, challenging the decision of LBS Centre for Science and Technology — the agency responsible for conducting the State Eligibility Test (SET) for promotion to the post of higher secondary school teacher. Although the petitioner had passed the SET, the LBS Centre declined to issue his certificate of qualification, citing his failure to produce an equivalency certificate for his master's degree obtained from IGNOU . LBS Centre counsel and govt pleader argued that, in view of the special rules framed under the Kerala Education Act, 1958, an equivalency certificate is mandatory. They also referred to the SET prospectus, which contains a similar clause. However, the single bench observed that IGNOU is a central university of national importance established by the central govt to offer distance education and regular courses. It is recognised by the University Grants Commission (UGC) and its courses are UGC-approved. HC held that no insistence on equivalency certificates can be made in respect of degrees obtained from national institutions such as the Indian Institutes of Technology (IITs), Indian Institutes of Science (IISc), National Institutes of Technology (NITs), Indian Institutes of Science Education and Research (IISERs) or other institutions recognized by the UGC. Accordingly, the court directed the LBS Centre to issue the SET qualification certificate for July 2021 to the petitioner.
Time of India
7 days ago
- Time of India
Let's talk about...tourists, go home!
What's going on in Spain? Local residents in cities like Barcelona, Palma, and Granada took to the streets, armed not with placards, but water pistols. Their message? Enough is enough. Fed up with overcrowded streets, rising rents, and vanishing neighbourhoods, locals are calling out the pressures of mass tourism . Is this a new thing? Anti-tourism protests have been brewing since at least April 2024 in Spain's Canary and Balearic Islands and Barcelona. This week's wave marks the first coordinated Southern Europe action under the 'SET' banner - Southern Europe Against Overtourism . Is it happening elsewhere? Yes. From Venice's entrance fees to Amsterdam's campaigns against late-night revelry, European cities are finding creative ways to manage visitor numbers. In Greece, timed-entry tickets control crowds at the Acropolis. In Japan, signage asks tourists to respect geisha districts in Kyoto. It also introduced a toll for climbing Mt. Fuji to control overcrowding. But aren't tourists good for the economy? Of course. They support livelihoods, local businesses, and culture. But when tourism tips into overtourism, the costs add up: housing becomes unaffordable, heritage sites get damaged, and daily life becomes difficult for residents. So, what are governments doing? Some cities are taking action. Barcelona plans to phase out 10,000 short-term rental licenses by 2028. Other places are promoting off-season and offbeat travel to distribute the footfall. It's all about balance - keeping cities livable for residents and enjoyable for visitors. If I am planning a holiday... Travel mindfully. Tourism needs a reset. Residents aren't anti-tourist - they are pro-balance. Thoughtful travel, better urban planning, and respect for local life can ensure that destinations remain vibrant - for both those who visit, and those who call it home.
