Traders cautious as US tariff deadline nears
The SET index moved in a range of 1,080.92 and 1,128.07 points this week, before closing yesterday at 1,119.94, up 3.5% from the previous week, with daily turnover averaging 33.75 billion baht.
Institutional investors were net buyers of 3.83 billion baht, followed by brokerage firms at 301.46 million. Retail investors were net sellers of 2.73 billion baht, followed by foreign investors at 1.40 billion.
NEWSMAKERS: The US and Vietnam agreed on a trade deal in which tariffs of 20% will apply to Vietnamese-origin goods and 40% on transshipped goods. In return, Vietnam will grant total market access to US goods by applying a zero tariff rate.
Economists say Vietnam's trade deal with the US is a wake-up call for Asian governments grappling with the reality that higher tariffs are here to stay.
Trump has threatened to impose a 30% or 35% tariff on Japan if a deal between the two countries is not reached before Wednesday's deadline. That would be well above the 24% rate announced on "Liberation Day" on April 2.
Trump said an upcoming trade deal between India and the US is going to be of a "different kind" with "much less tariffs".
The US House approved Trump's landmark "big beautiful" tax and spending bill, setting the stage for Trump to sign it on the Independence Day holiday, July 4.
Trump supports a Senate bill that would impose tariffs as high as 500% on China and India if they import oil from Russia, aimed at pressuring President Vladimir Putin to enter negotiations with Ukraine.
Federal Reserve chairman Jerome Powell said interest rates probably would have been lower by now if Trump had not announced tariffs, which forced the Fed to delay easing as tariffs can significantly raise inflation.
Trump threatened to cut off billions of dollars in subsidies that Elon Musk's companies receive from the US government, in an escalation of the war of words between the president and the world's richest man, one-time allies who have since fallen out.
Multiple news outlets report that the US has lifted export restrictions on chip design software to China, seen as an important sign of easing trade tensions.
US non-farm payrolls increased by 147,000 in June, higher than market expectations, while the unemployment rate fell to 4.1%, reflecting a strong labour market that eases concerns about a recession. Markets still expect the Fed to cut rates twice more this year, in September and December.
European Central Bank (ECB) policymakers are concerned that the appreciation of the euro could weigh on exports and drag inflation down further, minutes from their June meeting showed.
The US manufacturing purchasing managers' index (PMI) expanded for the sixth consecutive month in June, rising to 52.9, the highest since May 2022, supported by increases in new orders and employment.
The US consumer confidence index also improved from the previous month to 60.7, higher than market expectations.
Japan's tax revenues hit a record ¥75.2 trillion ($524 billion) in the fiscal year ended March 31, surpassing government forecasts by ¥1.8 trillion.
India's manufacturing PMI for June rose to 58.4, the highest in 14 months, from 57.6 in May, driven by strong exports.
South Korea reported that June exports increased more than expected by 4.3% year-on-year due to strong global demand for semiconductors. Semiconductor exports rose by 11.6% to a record high of $14.97 billion.
Microsoft is laying off as many as 9,100 employees, or 4% of its workforce, the Seattle Times reported, with big cuts in its gaming division as it seeks to control costs.
♦Opec+ is expected to accelerate oil production for the fourth straight month in August, adding another 411,000 barrels per day, despite recent price decline after the Israel-Iran ceasefire, as global oil demand is still viewed as robust.
Hong Kong is expected to lead the world in IPOs this year despite uncertainty from geopolitical tensions and trade tariffs, PwC said. The Chinese financial hub has rebounded strongly this year, with dozens of Chinese companies piling in to raise overseas capital. PwC predicted nearly 100 companies will raise at least US$25 billion in Hong Kong this year.
Tesla shares jumped after the carmaker posted a less drastic decline in vehicle sales than the most pessimistic analysts feared. The company delivered 384,122 vehicles during the last three months, down 13% from a year earlier. Some investors were braced for a 20% plunge or worse.
Deputy Finance Minister Julapun Amornvivat cautioned that Thailand's trade negotiations with the US are unlikely to conclude before Tuesday's deadline, as the team led by Finance Minister Pichai Chunhavajira was unable to reach a conclusion with the US Trade Representative in talks this week in Washington.
Thailand has a new acting prime minister, Phumtham Wechayachai, and 13 new ministers after a reshuffle that happened to coincide with a Constitutional Court ruling to suspend PM Paetongtarn Shinawatra pending a ruling on her ethics case.
Ms Paetongtarn is still in the cabinet, as culture minister, as she prepares her defence against allegations related to her handling of a phone call with former Cambodian premier Hun Sen. The court is expected to take 1-2 months to reach a final decision.
The World Bank has reduced its economic growth forecast for Thailand to 1.8% for this year and 1.7% for 2026, citing mounting global and domestic challenges. The projections mark a downgrade from earlier forecasts of 2.9% and 2.7%, respectively. Thailand recorded GDP growth of 2.5% last year.
The Investment Analysts Association downgraded its Thai GDP growth forecast for 2025 to 1.87%, from 2.56% in the previous quarter. The SET index is forecast to finish the year at 1,231 points.
The Ministry of Tourism and Sports on Friday shut down the online registration system for the much-hyped "We Travel Together" travel subsidy scheme because of repeated problems that led to crashes. Repairs may take a few days. The Tourism Authority of Thailand had been counting on the 1.76-billion-baht programme to generate tourism revenue of 35 billion baht from July 4 to Oct 31.
Foreign tourist arrivals from Jan 1 to June 29 fell 4.6% from the same period a year earlier, the tourism ministry said. Of the 16.6 million visitors, Malaysia was the largest source country with 2.29 million, followed by China with 2.25 million.
Long-term corporate bond issuance in the first half of 2025 dropped by 19.3% year-on-year, totalling 399 billion baht, the Thai Bond Market Association (ThaiBMA) said. Foreign investors were net buyers of Thai bonds, totalling 32.3 billion baht.
The ThaiBMA said most market participants expect the Bank of Thailand to cut its policy interest rate once more in the final quarter of 2025, from 1.75% to 1.50%.
Thailand's Manufacturing Production Index in May expanded 1.9% year-on-year to 100.79, with the automotive industry growing 12.9%, reflecting motor show bookings, economic stimulus and lower interest rates.
The cabinet has extended registrations for debt relief measures until Sept 30 from the original June 30 deadline. Conditions were also revised to provide broader coverage.
COMING UP: On Monday, euro zone finance ministers meet and Japan releases current account data. On Tuesday, Australia and New Zealand announce interest rate decisions. On Wednesday, The US reports crude oil inventories and the Fed releases minutes of its last meeting. On Thursday, the US announces initial jobless claims. On Friday, the UK reports monthly GDP, Germany announces monthly inflation and the International Energy Agency releases its monthly oil market report.
Locally, the SET on Monday holds a briefing on market trading ion June. On Wednesday, Finnomena discusses the fund market outlook for the second half of 2025.
STOCKS TO WATCH: Asia Plus Securities (ASPS) says heightened volatility in the Thai stock market has caused capital to flow into the bond market as a safe haven. However, if stock market conditions stabilise, there is a strong possibility that funds could flow back into equities.
The brokerage notes that with the SET index hovering around 1,100 points, the market yield gap has widened to 6.25% and the dividend yield gap has reached nearly 3%, making equities attractive from a risk premium standpoint. It recommends high-dividend stocks that show signs of recovery including SIRI (11% yield), ITC (9%), M (9%), AP (8.9%), LH (8.8%), KKP (8.4%), TU (7%) and KTC (5%).
InnovestX Securities says investors should focus on the fact that the US intends to unilaterally impose tariff rates on dozens of trading partners if they cannot reach deals by the July 9 deadline. Its top stock picks include PTT at a target price of 41 baht, CPALL (68 baht) and CBG (70 baht).
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RECAP: Asian investors turned cautious on Friday as the July 9 deadline to avert steep US tariffs approached with very few trade deals concluded. President Donald Trump indicated that dozens of trading partners could simply get letters next week informing them of their rates. The SET index moved in a range of 1,080.92 and 1,128.07 points this week, before closing yesterday at 1,119.94, up 3.5% from the previous week, with daily turnover averaging 33.75 billion baht. Institutional investors were net buyers of 3.83 billion baht, followed by brokerage firms at 301.46 million. Retail investors were net sellers of 2.73 billion baht, followed by foreign investors at 1.40 billion. NEWSMAKERS: The US and Vietnam agreed on a trade deal in which tariffs of 20% will apply to Vietnamese-origin goods and 40% on transshipped goods. In return, Vietnam will grant total market access to US goods by applying a zero tariff rate. Economists say Vietnam's trade deal with the US is a wake-up call for Asian governments grappling with the reality that higher tariffs are here to stay. Trump has threatened to impose a 30% or 35% tariff on Japan if a deal between the two countries is not reached before Wednesday's deadline. That would be well above the 24% rate announced on "Liberation Day" on April 2. Trump said an upcoming trade deal between India and the US is going to be of a "different kind" with "much less tariffs". The US House approved Trump's landmark "big beautiful" tax and spending bill, setting the stage for Trump to sign it on the Independence Day holiday, July 4. Trump supports a Senate bill that would impose tariffs as high as 500% on China and India if they import oil from Russia, aimed at pressuring President Vladimir Putin to enter negotiations with Ukraine. Federal Reserve chairman Jerome Powell said interest rates probably would have been lower by now if Trump had not announced tariffs, which forced the Fed to delay easing as tariffs can significantly raise inflation. Trump threatened to cut off billions of dollars in subsidies that Elon Musk's companies receive from the US government, in an escalation of the war of words between the president and the world's richest man, one-time allies who have since fallen out. Multiple news outlets report that the US has lifted export restrictions on chip design software to China, seen as an important sign of easing trade tensions. US non-farm payrolls increased by 147,000 in June, higher than market expectations, while the unemployment rate fell to 4.1%, reflecting a strong labour market that eases concerns about a recession. Markets still expect the Fed to cut rates twice more this year, in September and December. European Central Bank (ECB) policymakers are concerned that the appreciation of the euro could weigh on exports and drag inflation down further, minutes from their June meeting showed. The US manufacturing purchasing managers' index (PMI) expanded for the sixth consecutive month in June, rising to 52.9, the highest since May 2022, supported by increases in new orders and employment. The US consumer confidence index also improved from the previous month to 60.7, higher than market expectations. Japan's tax revenues hit a record ¥75.2 trillion ($524 billion) in the fiscal year ended March 31, surpassing government forecasts by ¥1.8 trillion. India's manufacturing PMI for June rose to 58.4, the highest in 14 months, from 57.6 in May, driven by strong exports. South Korea reported that June exports increased more than expected by 4.3% year-on-year due to strong global demand for semiconductors. Semiconductor exports rose by 11.6% to a record high of $14.97 billion. Microsoft is laying off as many as 9,100 employees, or 4% of its workforce, the Seattle Times reported, with big cuts in its gaming division as it seeks to control costs. ♦Opec+ is expected to accelerate oil production for the fourth straight month in August, adding another 411,000 barrels per day, despite recent price decline after the Israel-Iran ceasefire, as global oil demand is still viewed as robust. Hong Kong is expected to lead the world in IPOs this year despite uncertainty from geopolitical tensions and trade tariffs, PwC said. The Chinese financial hub has rebounded strongly this year, with dozens of Chinese companies piling in to raise overseas capital. PwC predicted nearly 100 companies will raise at least US$25 billion in Hong Kong this year. Tesla shares jumped after the carmaker posted a less drastic decline in vehicle sales than the most pessimistic analysts feared. The company delivered 384,122 vehicles during the last three months, down 13% from a year earlier. Some investors were braced for a 20% plunge or worse. Deputy Finance Minister Julapun Amornvivat cautioned that Thailand's trade negotiations with the US are unlikely to conclude before Tuesday's deadline, as the team led by Finance Minister Pichai Chunhavajira was unable to reach a conclusion with the US Trade Representative in talks this week in Washington. Thailand has a new acting prime minister, Phumtham Wechayachai, and 13 new ministers after a reshuffle that happened to coincide with a Constitutional Court ruling to suspend PM Paetongtarn Shinawatra pending a ruling on her ethics case. Ms Paetongtarn is still in the cabinet, as culture minister, as she prepares her defence against allegations related to her handling of a phone call with former Cambodian premier Hun Sen. The court is expected to take 1-2 months to reach a final decision. The World Bank has reduced its economic growth forecast for Thailand to 1.8% for this year and 1.7% for 2026, citing mounting global and domestic challenges. The projections mark a downgrade from earlier forecasts of 2.9% and 2.7%, respectively. Thailand recorded GDP growth of 2.5% last year. The Investment Analysts Association downgraded its Thai GDP growth forecast for 2025 to 1.87%, from 2.56% in the previous quarter. The SET index is forecast to finish the year at 1,231 points. The Ministry of Tourism and Sports on Friday shut down the online registration system for the much-hyped "We Travel Together" travel subsidy scheme because of repeated problems that led to crashes. Repairs may take a few days. The Tourism Authority of Thailand had been counting on the 1.76-billion-baht programme to generate tourism revenue of 35 billion baht from July 4 to Oct 31. Foreign tourist arrivals from Jan 1 to June 29 fell 4.6% from the same period a year earlier, the tourism ministry said. Of the 16.6 million visitors, Malaysia was the largest source country with 2.29 million, followed by China with 2.25 million. Long-term corporate bond issuance in the first half of 2025 dropped by 19.3% year-on-year, totalling 399 billion baht, the Thai Bond Market Association (ThaiBMA) said. Foreign investors were net buyers of Thai bonds, totalling 32.3 billion baht. The ThaiBMA said most market participants expect the Bank of Thailand to cut its policy interest rate once more in the final quarter of 2025, from 1.75% to 1.50%. Thailand's Manufacturing Production Index in May expanded 1.9% year-on-year to 100.79, with the automotive industry growing 12.9%, reflecting motor show bookings, economic stimulus and lower interest rates. The cabinet has extended registrations for debt relief measures until Sept 30 from the original June 30 deadline. Conditions were also revised to provide broader coverage. COMING UP: On Monday, euro zone finance ministers meet and Japan releases current account data. On Tuesday, Australia and New Zealand announce interest rate decisions. On Wednesday, The US reports crude oil inventories and the Fed releases minutes of its last meeting. On Thursday, the US announces initial jobless claims. On Friday, the UK reports monthly GDP, Germany announces monthly inflation and the International Energy Agency releases its monthly oil market report. Locally, the SET on Monday holds a briefing on market trading ion June. On Wednesday, Finnomena discusses the fund market outlook for the second half of 2025. STOCKS TO WATCH: Asia Plus Securities (ASPS) says heightened volatility in the Thai stock market has caused capital to flow into the bond market as a safe haven. However, if stock market conditions stabilise, there is a strong possibility that funds could flow back into equities. The brokerage notes that with the SET index hovering around 1,100 points, the market yield gap has widened to 6.25% and the dividend yield gap has reached nearly 3%, making equities attractive from a risk premium standpoint. It recommends high-dividend stocks that show signs of recovery including SIRI (11% yield), ITC (9%), M (9%), AP (8.9%), LH (8.8%), KKP (8.4%), TU (7%) and KTC (5%). InnovestX Securities says investors should focus on the fact that the US intends to unilaterally impose tariff rates on dozens of trading partners if they cannot reach deals by the July 9 deadline. Its top stock picks include PTT at a target price of 41 baht, CPALL (68 baht) and CBG (70 baht).
