Political rallies could drag SET down, say analysts

[rooster59]

Political rallies could drag SET down, say analysts

By The Nation

 

 

Investors in stocks should follow political developments both at home and abroad, as it could pressure the Stock Exchange of Thailand (SET) Index next week, market analysts said.

 

 

The baht this week (September 7 to 11) moved between Bt31.23 and Bt31.46 against the dollar before closing at Bt31.32 and Bt31.33.

 

The baht strengthened against the dollar as the US Federal Reserve looked set to maintain the interest rate at nearly zero in the long term after Fed chairman Jerome Powell announced a plan to raise inflation to support the US labour market and economy. This caused a weakening of the dollar compared to other major currencies.

 

An analyst at CIMB Thai Bank expected the baht to move between Bt31.00 and Bt31.50 next week against the dollar, adding that several central banks would hold meetings next week, such as the Fed (September 15-16), the Bank of Japan (September 16-17) and the Bank of England (September 17).

 

The SET Index on Friday (September 11) closed at 1,279.96, down 10.93 points or 0.85 per cent, while total transactions amounted to Bt44.155 billion.

 

An analyst at Tisco Securities expected the index next week to remain in negative territory between 1,260 and 1,300 due to political pressure both domestic and international.

 

"In Thailand, student protesters will hold a large political rally next Saturday. Investors were concerned that it would prolong and intensify," the analyst said. "In foreign countries, we have to follow US-China tensions and the number of Covid-19 cases, so investors should be careful while investing."

The price of gold on Saturday (September 12) was US$1940.50 per ounce while the price in Thailand was Bt28,700 per baht weight.

 

An analyst at YLG Bullion International said the price of gold would fluctuate sideways in the short term, advising investors to buy gold when the price dropped to the support line between $1,936 and $1,927 per ounce and take profit when the price rises to the resistance level between $1,956 and $1,966 per ounce.

 

"If the price drops below the support line, investors should wait to buy gold when the price drops to the next support line at $1,906 per ounce," the analyst said.

 

Source: https://www.nationthailand.com/business/30394437

 

-- © Copyright The Nation Thailand 2020-09-13

 

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[AussieBob18]

Already looking for excuses?  Here is another one for them - and it is a biggy - Trump will win the election !

China will get even harder hit economically than in Trump's first term - and Thailand will feel the pain - huge pain.

 

And add to that the 'tourism disaster' - both post Covid and what was happening before that. Tourism was dropping for over a year despite the TAT lies - that is why they sacked the Head of TAT.

 

And add to that the high Baht which was already forcing exports to drop in 2019 and early 2020.  Despite many calls for the Baht to be lowered and 'quantitative easing' to be done, the Junta rejected that approach in favour of maintaining a high Baht which meant high exchange reserves from the very positive exports and tourism sectors. And of course to fund the large military and public infrastructure expenditures, like what was done in the China 'economic growth' model. 

 

There is a reason there has been so many resignations and sackings lately in the 'Financial Sector'. Things are coming undone and the Junta is desperately holding them together with a lot of PR and Public Sector spending announcements. They are also getting rid of people who question things. And those who have prepared are jumping ship early to avoid the later rush.

 

The Baht crashing will help, but it will be too little too late and it will only delay the inevitable. The Junta is running out of money and they know it is all coming apart.  They know that borrowing from China will only make it worse later, and I would not be surprised to hear that some of those who resigned were strongly against borrowing from China and the Junta see that as the solution.  The Junta is desperate to turn things around before the next election, but many 'elite' know they have stuffed it up and are preparing for what is inevtiable. 

 

As Keating once said in the 90s: "this is the recession we had to have" - and it is coming to Thailand.  The longer it takes to arrive, the worse it will be - for ordinary people.  

 

[RichardColeman]

7 hours ago, rooster59 said:

The SET Index on Friday (September 11) closed at 1,279.96, down 10.93 points or 0.85 per cent, while total transactions amounted to Bt44.155 billion.

 

An analyst at Tisco Securities expected the index next week to remain in negative territory between 1,260 and 1,300 due to political pressure both domestic and international.

Pretty sure that if it was 1279 on Friday and goes to 1300 next week that's positive movement

[Isaan sailor]

The SET does not reflect reality in Thailand.  Rather, it tends to track the Dow 30 and The Standard & Poor 500.

 

[Scott Tracy]

As written in the headline, the analysts said no such thing.

 

The analysts, as always, make predictions and then hedge their bets, but they specifically DID NOT say that protests would drag the SET down.

 

...

10 hours ago, rooster59 said:

An analyst at Tisco Securities expected the index next week to remain in negative territory between 1,260 and 1,300 due to political pressure both domestic and international.

 

"In Thailand, student protesters will hold a large political rally next Saturday. Investors were concerned that it would prolong and intensify," the analyst said. "In foreign countries, we have to follow US-China tensions and the number of Covid-19 cases, so investors should be careful while investing."

 

Where does it say, huh...?

 

And how can the SET hovering between 1260 - 1300 be in negative territory?

[Eddy Ozark]

13 hours ago, AussieBob18 said:

Already looking for excuses?  Here is another one for them - and it is a biggy - Trump will win the election !

China will get even harder hit economically than in Trump's first term - and Thailand will feel the pain - huge pain.

 

And add to that the 'tourism disaster' - both post Covid and what was happening before that. Tourism was dropping for over a year despite the TAT lies - that is why they sacked the Head of TAT.

 

And add to that the high Baht which was already forcing exports to drop in 2019 and early 2020.  Despite many calls for the Baht to be lowered and 'quantitative easing' to be done, the Junta rejected that approach in favour of maintaining a high Baht which meant high exchange reserves from the very positive exports and tourism sectors. And of course to fund the large military and public infrastructure expenditures, like what was done in the China 'economic growth' model. 

 

There is a reason there has been so many resignations and sackings lately in the 'Financial Sector'. Things are coming undone and the Junta is desperately holding them together with a lot of PR and Public Sector spending announcements. They are also getting rid of people who question things. And those who have prepared are jumping ship early to avoid the later rush.

 

The Baht crashing will help, but it will be too little too late and it will only delay the inevitable. The Junta is running out of money and they know it is all coming apart.  They know that borrowing from China will only make it worse later, and I would not be surprised to hear that some of those who resigned were strongly against borrowing from China and the Junta see that as the solution.  The Junta is desperate to turn things around before the next election, but many 'elite' know they have stuffed it up and are preparing for what is inevtiable. 

 

As Keating once said in the 90s: "this is the recession we had to have" - and it is coming to Thailand.  The longer it takes to arrive, the worse it will be - for ordinary people.  

 

A very good analysis of the situation. I agree with your conclusion. IMO the baht is probably around 7 to 10 percent too high and has been so for a year or more. A 5 percent devaluation is needed right now, at least. I am not an economist, but what I say is based on a gut feeling.

[Dumbastheycome]

Such a sadly contrived "say". Not because it  is not a possible . Or in fact it is an intent  by outside  elements  to make it so.

Unfortunately  for those that would  wish it  the general ASEAN community is  not  willing to  commit to external desired  dictate.

 

 

 

 

 

 

 

 

 

[AussieBob18]

14 hours ago, Eddy Ozark said:

A very good analysis of the situation. I agree with your conclusion. IMO the baht is probably around 7 to 10 percent too high and has been so for a year or more. A 5 percent devaluation is needed right now, at least. I am not an economist, but what I say is based on a gut feeling.

This is 20 years of AUS versus BAHT. 

Note the drop in AUS during the 2008/2009 GFC.

Note the continual cosnistent drop in the AUD after the JUnta took over in 2014.

That was not an accident in 2014 - they have manipulated their currency.

If you do the same 20 years against all the Top 5 traded currencies, the picture is similar.

 

The Baht was 30% over-valued in early 2020 - and that is how far it is going to drop - at least.

 

 

 

[Leaver]

On 9/14/2020 at 10:37 AM, AussieBob18 said:

This is 20 years of AUS versus BAHT. 

Note the drop in AUS during the 2008/2009 GFC.

Note the continual cosnistent drop in the AUD after the JUnta took over in 2014.

That was not an accident in 2014 - they have manipulated their currency.

If you do the same 20 years against all the Top 5 traded currencies, the picture is similar.

 

The Baht was 30% over-valued in early 2020 - and that is how far it is going to drop - at least.

 

 

 

 

Already on the radar.

 

https://thethaiger.com/hot-news/economy/us-treasury-mulls-putting-thailand-on-its-watchlist-as-a-currency-manipulator

[fabruer]

For those of you invested in Thai equity or debt, could you please point me to online brokers that you are using?

Would that be international brokers or are you using Thai specific brokers?