SET to forward plan on listing of exchange

The Stock Exchange of Thailand (SET) will forward its demutualisation plan to the government while confirming that it has an option that does not include selling shares to the public.

Previously, Commerce Minister Kittiratt Na Ranong said he did not agree with the plan, signalling that it might be scrapped.
Meanwhile, SET President Charamporn Jotikasthira said last week that he had not had a chance to talk with either Kittiratt, who is also deputy
prime minister and head of the economic team, or Finance Minister Thirachai Phuvanatnaranubala on the fate of the plan.
He added that following the Thai capital development plan, the SET was slated to become a private company, selling its shares to the public and then listing the shares on the stock market.
"However, it depends on whether the government will follow the plan or not," said Charamporn.
He said that there were |many options for the demutua-|lisation of the exchange as either a listed or non-listed company. Listing would increase the com-petitiveness of the SET, as it |could raise funds for expansion. |But if the decision is made not to select the listing option, it would use its retained earnings for expansion.
Charamporn said there was no stipulation in law for SET reform. But under the plan under consideration by the Office of the Council of State, the SET would be required to sell its shares to the public. The law specifies that the market has to be liberalised and its monopoly abandoned. The goal is to increase the efficiency and flexibility of the exchange in response to competition.
He said the SET was now developing its new automated information and technology system and expects it to be operational next July.
The finance minister has called a meeting today of the economic monitoring committee, which comprises representatives from the SET, the Federation of Thai Capital Market Organisations, the Board of Trade and the Federation of Thai Industries.
The committee will discuss the economic situation both globally and domestically.

Stocks, gold up

After losing 10 per cent since August 5, the SET Index gained 1.86 points or 0.18 per cent on turnover of Bt30.3 billion.
"The market had given up ground in the past four trading days," a stock analyst said.
Gold closed at US$1,782.50-$1,783.50 an ounce in Hong Kong, down from its record high above $1,800. Volatility led to 14 adjustments in domestic prices, which resulted in an increase of Bt500 per baht weight.
Bullion closed at Bt25,400, down slightly from the intraday peak of Bt25,500.

SET follows Wall Street rebound

The Stock Exchange of Thailand yesterday rebounded after an overnight rally on Wall Street as the US Federal Reserve pledged to keep its interest rate at a record low to revive the flagging economic recovery in the United States.
Gold for immediate delivery rose to US$1,764 an ounce while Thailand's Gold Traders Association adjusted the price of domestic gold bar eight times for an aggregate decline of Bt200 per baht weight to Bt24,900.
Oil rebounded from a 10-month low in the New York Mercantile Exchange, with crude for September delivery advancing 4 per cent to $82.43 a barrel.

After two days of sharp falls on a downgrading of the US sovereign debt by Standard & Poor's, the SET Index bounced back 1.69 per cent, or 17.67 points, to close at 1,060.21 points. Trading turnover was Bt35.3 billion. Combining with net sellers of Thai stocks worth Bt1.79 billion yesterday, foreign investors' selling totalled Bt13.75 billion from the beginning of this month.
On Tuesday, the US Dow Jones Industrial Average recovered nearly 4 per cent after the Fed indicated it would keep its target rate for overnight loans between banks at a record low of between zero and 0.25 per cent at least through mid-2013 and use other tools as appropriate.
The Federal Open Market Committee's decision represents the biggest effort since last November to jolt the US economy and revive confidence after S&P lowered the US credit rating last week.
The dollar continued its weakening versus the majority of its most traded peers as the Fed said growth was "considerably slower" than it expected, according to Bloomberg.
The baht was trading at 29.90 per US dollar as of 5:33pm, with the strongest level of 29.81/29.83 per dollar.
"The baht is still volatile from external factors. Despite the Fed's low-rate pledge, investors think the measure is not aggressive enough and does not give a big surprise to the market," said a currency trader at CIMB Thai Bank.
"We saw a Tuesday rally on Wall Street as investors are expecting a better return on equities," the trader said.

Thai Oil

         Taiwanese Ministry of Economic Affairs has ordered Formosa Petrochemical to shut down its 540kbd refinery in Mailioa for safety checks following the 7th fire in the past one year. The latest fire took place on 30 July at a propylene production unit. As a result, Formosa declared a force majeure on its oil product exports in August. Formosa also put on hold its August crude supply from Saudi Arabia and Kuwait. The shutdown is expected to take 2 weeks for the repairs to be carried out.
Comment:
           This is positive for TOP as Formosa is a major exporter of diesel and gasoline (these 2 products account for 60% of TOP's refinery output). The shutdown would cut off the export portion from the refiner this month. However, the extra strength of diesel prices should be short-lived as supply shortfall by Formosa could be offset by higher exports from Japan and South Korea.

          For aromatics (mainly Paraxylene (PX)), margins should be bullish for the short-term as one of the three aromatic units has already shut down since 18 May. Market is now taking a wait-and-see stand on how long the complex will be shut. In conclusion, we expect diesel, gasoline, and aromatic margins to rise in the short-term. TOP is our top pick for energy sector.

Gold glItters amid bleak US outlook, sliding dollar

Renewed demand by central banks worldwide including the Bank of Thailand amid signs of a declining US economy and dollar depreciation pushed global and domestic gold prices to a new high.
Spot gold in Singapore peaked at US$1,670.85 an ounce, prompting Thailand's Gold Traders Association to raise domestic reference prices four times yesterday. Bullion in Thailand was last sold at Bt23,450 per baht weight, while ornaments went for Bt23,850. Domestic gold prices were raised by Bt550 per baht weight yesterday. In a month, it rose by $170 per ounce. At $1,700, domestic gold price will hit Bt24,000 per baht weight.


Even though the US debt deal was passed on Tuesday, investors across the globe were bearish over the torpid second half as US consumers have zipped up their wallets and the government moved to cut more spending. Consumer spending dropped, while data show a high unemployment rate and the slowest US manufacturing growth in two years. Gold again is seen as a safe haven for investors.
Asian equity markets including the Stock Exchange of Thailand's slumped as traders switched their attention from the US debt deal to the weakening global economic outlook and fears of fresh sovereign debt contagion in the eurozone.
UBS raised its one-month gold forecast to $1,725 an ounce from $1,575, and three-month forecast to $1,850 from $1,600. Eugen Weinberg, an analyst at Commerzbank, said in a Bloomberg Television interview from Frankfurt that central banks would need to buy "several hundred" metric tonnes of gold a year.
The Bank of Thailand showed that its gold reserves reached 133.2 tonnes as of June. As of July 22, Thailand was sitting on international reserves of $185.9 billion. London-based World Gold Council data showed that the Bank of Thailand, after maintaining gold reserves at 84 tonnes from 2004-10, bought 15.6 tonnes in July last year and 9.3 tonnes in March of this year.
In the first five months of this year, central banks added 155 tonnes valued at about $8.18 billion, which doubled the amount bought in all of 2010, World Gold Council data show.
According to data from the International Monetary Fund (IMF), the Bank of Korea bought 25 tonnes from June-July to lift reserves to 39.4 tonnes. Kazakhstan's holdings also increased by 3.1 tonnes to 70.4 tonnes in June.

GH Bank raises fixed-deposit rates

The fixed rate on deposits below Bt3 million for three months stays at 2.25 per cent while that for deposits over Bt3 million for the same period is 2.50 per cent. The current deposit rate rises to 0.50 per cent from 0.25 per cent.
The minimum lending rate went up by 25 basis points to 7.125 per cent from 6.875 per cent.
Mother's Day treat
Bangkok Metro, operator of the capital's MRT subway system, is waiving fares for all mothers riding its trains with their children on Mother's Day, August 12.
To be eligible for the free ride, the mothers and their children must identify themselves at ticket booths and get coupons. The free ride is given only to mothers, while their children are subject to normal fares.
Overseas-call drive
TOT will focus more on promoting its Net Call Internet-based overseas-call service in the near future to expand its customer base, senior executive vice president Morakot Tienmontri said yesterday.
TOT targets overseas-call revenue of about Bt1 billion this year, of which Bt220 million will be from its 008 service.
Yesterday it cut the 008 rate on calls to Hong Kong or Canada to Bt2 per minute from Bt3 to increase competition. The promotional rate will last for three months. It has expanded its call destinations to 229 countries from 153.
Storm impact slight
Tropical Storm Nock-Ten, which caused little flooding in 10 provinces in the Northeast, will have had only a small impact on rice production, affecting 160,000 rai (25,600 hectares) of the total 62 million rai of rice plantation in the country.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said yesterday that Thai rice production was expected to reach the highest rate in many years at 25 million tonnes of paddy rice.
The short-term flooding will not destroy production. In fact, it has benefited many plantation areas. However, if the water cannot be drained quickly, it may cause more losses, he said.
Promotions lure most
Sixty-three per cent of Thais are attracted by retail promotional offers when it comes to grocery shopping, according to Nielsen's latest "ShopperTrends" report.
The report also found that while value is in focus, consumers were more loyal to both brands and stores than in 2008. When asked how promotions affected their supermarket/hypermarket shopping, 24 per cent of Thai shoppers said they only bought on promotion when they like the brand (up from 16 per cent in 2008). This increase in loyalty also extends to stores: nearly three-quarters (73 per cent) of shoppers claimed that they always went to the same stores, up from 63 per cent in 2008 and 69 per cent in 2009.
Hypermarkets continued to be the favourite primary shopping channel, with 92 per cent saying they visited in the past four weeks,
S 11 offers bike loans
S 11 Group Co has emerged as a new provider of motorcycle hire-purchase loans, with backed by local and foreign investors.
With Land & Houses Retail Bank's financial support, the group expects to cash in on robust demand that pushed motorcycle sales beyond 1 million units in the first half of this year. S 11 Group will focus its business in Bangkok and peripheral areas. Samart Jiradamrong, managing director and CEO, said he did not have a market-share target.

Concerns in US economy spark new chaos

The price was adjusted by Bt400 at the opening and Bt50 each at the three subsequent increases.
The Stock Exchange of Thailand also moved downward in tandem with other Asian bourses, on growing investor concern of the global economic health.
As the morning session ended, the SET index dropped 13.03 points or 1.14 per cent to 1,126.58. Yesterday, rating agencies warned the US may be downgraded and an unexpected decline in consumer spending increased concern that growth in the world's largest economy is faltering.

Even though the US's debt deal was passed last night, investors were concerned over the torpid second half as US consumers have zipped up their wallets and the government moved to cut more spending. Consumer spending dropped, while data shows high unemployment rate and the slowest US manufacturing growth in two years.


Upon the agreement to raise the US debt ceiling and reduce government spending, International Monetary Fund Managing Director Christine Lagarde welcomed the move as this will reduce a major uncertainty and bolster US fiscal credibility, hence good for both the US and global economy.
"Raising the debt ceiling means a severe economic disruption has been avoided, and the accompanying deficit reduction deal is an important step toward fiscal consolidation. Given the fragility of recovery, the planned spending cuts are appropriately phased and not overly frontloaded so as not to undermine growth.