Second-quarter GDP figures due today may impact baht, SET

[webfact]

Second-quarter GDP figures due today may impact baht, SET

By The Nation

 

 

The National and Economic Social Development Council will today release the gross domestic product results for the second quarter of this year.

 

Most research houses predict growth would be slower at around slightly over 2 per cent, compared with 2.8 per cent in the first quarter which was the slowest growth in nearly four years. The Economic and Business Research Centre for Reform forecast growth at around 2.5 per cent for the second quarter, while Siam Commercial Bank predicted 2.2 per cent, a near five-year low.

 

Meanwhile, Kobsidthi Silpachai, the head of capital markets research at Kasikornbank, said that Thailand’s GDP in the second quarter may expand by 2.8 per cent while full year GDP would grow 3.1 per cent.

 

The new GDP figure is expected to affect the movement of the baht and the Stock Exchange of Thailand Index.

 

Kasikorn Research Centre said the baht would be affected when the GDP figure is released. The baht closed at Bt30.86 per dollar on Friday, weakening form Bt30.73 the previous Friday.

 

Foreign investors made net sales of Thai shares and government bonds as they were worried about the threat of an economic recession in the United States, leading to a weakening of the baht.

 

 

Between August 19-23, the baht is expected to move between Bt30.70 to Bt31 to the dollar. The market will focus on the GDP figure, July’s export figure and the latest developments in the trade war between the United States and China, as well as Brexit, according to Kasikorn Research.

 

The Thai stock market on Friday dropped 1.17 per cent from the previous week to 1,631.40. The market was in negative zone most of the week after making some gains on Friday. Investors were worried about the impact of the trade war, the recession, the protests in Hong Kong and political instability in Argentina.

 

They, however, welcomed news reports of the Thai government’s stimulus package. The SET Index may move down to the 1,610-1,590 level while the resistance barrier is between 1,640-1,650 for this week, according to Kasikorn Research. Investors will also focus on the preliminary purchase managers’ index for July in major economies, namely the US, Japan and the euro-zone. 

 

Investors will also keep an eye on sales of new homes and second homes in July in the US and the minutes of the US Federal Reserve meeting. The will also look at July’s inflation rate in Japan, said Kasikorn Research.

 

Source: https://www.nationthailand.com/business/30374945

 

-- © Copyright The Nation Thailand 2019-08-19

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[hotchilli]

I sincerely hope it does !

[Srikcir]

6 hours ago, webfact said:

They, however, welcomed news reports of the Thai government’s stimulus package.

The objective of which is to keep the SET from sliding as was the minor BOT rate cut. Any benefit to the Thai people in general is otherwise insignificant.

[EricTh]

I doubt it will affect baht much.

 

The main problem is the huge inflow coming from other countries and the trade surplus.

 

 

[PommieOz]

I heard from a usually reliable source in Vietnam that several major manufactures currently based in Thailand have feelers out for possible relocation there. If true this could have an enormous effect on the economy.

[lujanit]

The government should be more worried about the probable international bond market collapse. With 30% of bonds in negative territory which has never happened before and losses in the trillions this is going to end badly for everyone.

 

The western is full of stories on this and the Thais just put their head in the sand.

[mok199]

At last , my boy needs new shoes..

[Srikcir]

6 hours ago, webfact said:

Most research houses predict growth would be slower at around slightly over 2 per cent

That's been my forecast for last month, at that time with an upper limit of 2.5%.

 

6 hours ago, webfact said:

Thailand’s GDP in the second quarter may expand by 2.8 per cent while full year GDP would grow 3.1 per cent.

If the 2019Q2 is 2.8% or less, there will be no annual average GDP growth rate of 3.1% because the 20019Q3 and 2019Q4 would have to exceed 3.5%.

Some of the many challenges:

• Second-quarter private investment fell 2.8% from a year earlier while consumption growth slowed to 3.3%, central bank indices showed
• Non-performing home loans amounted to 3.34% of total mortgage loans at Thai banks as of the end of June
• In the second quarter, exports declined 4.2% from a year earlier
• “Weaker external demand started to filter down to domestic demand,” said Sarun Sunansathaporn, economist of Bank of Ayudhya
• gains from tourism and domestic activity slowed
• Thailand experienced an inverted yield curve, as a 10-year bond rate is lower than the short-term policy rate of the Bank of Thailand, which is currently set at 1.5 per cent (inverted yield curve is an indication of looming recession)

[Eric Loh]

There will be equally big problems if the Baht has severe volatility and major swing of the exchange rate. It will create lots of panic and out flows and that will seriously impact the country just like 1997. BOT has a large war chest and will intervene to smooth out the volatility; I hope.   

[RotBenz8888]

8 minutes ago, Eric Loh said:

There will be equally big problems if the Baht has severe volatility and major swing of the exchange rate. It will create lots of panic and out flows and that will seriously impact the country just like 1997. BOT has a large war chest and will intervene to smooth out the volatility; I hope.   

It will be interesting to see how long their huge reserve will last, when that huge debt bubble bursts.

[RichardColeman]

Be more massaged than a Pattaya massage junkie, though less happy ending.

[EricTh]

The Q2 GDP is out and is weaker than expected.

 

But the Baht has gained strength instead of weakening. LOL