Investors lock in profits before tariff deadline
Trading in Thailand was also subdued, as investors monitored the growing border conflict with Cambodia and waited for news on the trade and tariff front.
The SET index moved in a range of 1,191.65 and 1,227.71 points this week, before closing yesterday at 1,217.15, up 0.9% from the previous week, with daily turnover averaging 41.5 billion baht.
Foreign investors were net buyers of 9.07 billion baht. Retail investors were net sellers of 5.75 billion baht, followed by institutional investors a 3.28 billion, and brokerage firms at 42.1 million.
NEWSMAKERS: President Donald Trump announced a "massive" trade deal with Japan that would include a 15% tariff on imports. Under the deal, Japan will invest $550 billion into the US, which Trump said would receive 90% of the profits.
Trump also agreed to reduce threatened tariffs on the Philippines, but only by one percentage point to 19%, while Manila would open up completely to US goods, he said after meeting with counterpart Ferdinand Marcos at the White House.
US Treasury Secretary Scott Bessent signalled a 90-day extension of the trade "truce" with China, saying he would meet his Chinese counterparts in Stockholm next week for tariff talks, paving the way for continued trade negotiations and keeping triple-digit tariffs on hold.
The EU is preparing to impose counter-tariffs on $117 billion worth of American products, including aircraft, automobiles and bourbon whiskey, if trade talks fail and Washington proceeds with threats to impose 30% tariffs on EU imports starting Aug 1.
The European Central Bank kept interest rates unchanged for the first time in more than a year as it looks for clarity on EU trade with the US. President Christine Lagarde said the bank was now in a "wait-and-see" mode, with inflation at the 2% goal and the economy performing in line with or better than expectations.
China's yuan hit an eight-month high against the dollar on Thursday, after the People's Bank of China set the midpoint rate at 7.1385 per dollar, its strongest since Nov 6.
Trump downplayed his clash with Fed chairman Jerome Powell over cost overruns during a tour of the central bank's renovation project, making it clear that he saw lower interest rates as a more pressing concern.
The EU announced a new sanctions package against Russia, its most severe yet, cutting the Russian crude oil price cap to $47.50 a barrel from $60, imposing sanctions on "shadow fleets" transporting Russian oil, and an expanded scope that includes banking and military industrial sectors.
Nvidia is reportedly facing difficulty delivering its H20 AI chips to China despite recently announcing plans to resume sales, as it had earlier returned production quotas booked with Taiwan Semiconductor Manufacturing Co following a US government ban in April. It may take up to nine months to resume production.
Japanese government bonds (JGBs) have been one of the world's most stable securities for decades. However, the 30-year JGB yield this week rose to 3%, the highest since the 2008 subprime crisis, reflecting massive selling. This may raise concern over a new round of financial crisis.
South Korea's economy grew 0.5% year-on-year in the second quarter, the central bank said, driven by stronger private consumption and 4.2% export growth, the best in nearly five years.
Tesla chief executive Elon Musk said reductions in US government support for EV makers could lead to a "few rough quarters". His company reported a second-quarter profit of $1.2 billion, down from $1.4 billion a year earlier, as sales fell to $22.5 billion from $25.5 billion.
Google's parent Alphabet said 2025 capital expenditures will be $85 billion, or $10 billion greater than an earlier forecast. Its sales climbed to $81.7 billion, slightly above projections, while second-quarter profit of $28.2 billion also beat expectations.
Malaysia reported second-quarter GDP growth of 4.5% year-on-year, better than the market consensus of 4.2% and up from 4.4% in the previous quarter.
Finance Minister Pichai Chunhavajira says the United States has now looked at 90% of Thailand's new trade proposals and is expected to give a clear answer before Aug 1. Thailand hopes to receive a reduction in its tariff rate from 36% to below 20%, or similar to the rates in other Asean countries.
Deputy Finance Minister Paopoom Rojanasakul says negotiations with the US will not include full opening of markets for US goods with zero tariffs, as seen in other countries that have reached agreements, due to concerns about domestic economic impact, especially on agricultural products.
The cabinet approved the nomination of Vitai Ratanakorn as the next governor of the Bank of Thailand. The president of the Government Savings Bank was chosen over BoT deputy governor Roong Mallikamas. Finance Minister Pichai said he hopes to see monetary and fiscal policies moving in the same direction to address challenges.
The Board of Investment said the value of applications in the first six months rose 139% from a year earlier to a record 1.06 trillion baht ($32.5 billion), led by a 20-fold increase to 523 billion baht in digital sector pledges, electrical and electronic goods and rail infrastructure.
Car production in Thailand rose for a second straight month in June, up 12% from a year earlier to 130,223 units, the Federation of Thai Industries said. The increase followed a rise of 10.3% in May, after nearly two years of contraction.
The Ministry of Finance is studying the imposition of a higher excise tax on imported electric vehicles that use a low proportion of local content.
The dollar value of Thai exports rose 15.5% year-on-year in June, reflecting the continued front-loading of shipments in anticipation of higher US tariffs in the second half of this year.
The House of Representatives approved amendments to the National Savings Fund Act to allow the sale of "retirement lottery" tickets as an alternative for people to save money and create a sustainable savings system. Tickets would be issued weekly with a cap on purchases at 3,000 baht per month.
Suvarnabhumi Airport has more airlines serving it -- 113 -- than any other airport in the world, according to data reviewed by FlightConnections as of April 16 this year.
The Tourism Authority of Thailand has set a revenue target for 2026 of 2.8 trillion baht, up 5% from this year, while acknowledging risk factors that could repeat some negative trends seen in 2025, such as a 33% decline in Chinese arrivals.
Gulf Development, Thailand's largest energy company by market value, has purchased the entire shareholding of the Pak Lay hydropower project in Laos for $128 million.
The Government Savings Bank is preparing to launch G-token savings bonds worth 5 billion baht, offering higher returns than market interest rates due to lower issuance costs. These will be sold alongside regular bonds worth 25 billion baht, expected to begin in late August.
Real estate developers propose amending property rights laws to promote optimal land utilisation, support foreign investment and megaprojects. They suggest extending long-term land lease rights to 50-60 years from 30 and reducing social risks.
The Bank of Thailand issued a warning letter following the cabinet approval of the Financial Hub Bill draft, emphasising the need to manage money laundering and terrorism financing risks, and ensure business separation from mainstream financial system operations.
COMING UP: On Monday, Canada releases monthly wholesale sales. On Tuesday the US releases consumer confidence, job openings and weekly crude oil stocks. Wednesday brings German, euro zone and US GDP data; US Federal Reserve and Bank of Japan rate decisions, and Chinese manufacturing PMI.
On Thursday, Germany releases an inflation update and the US releases core personal consumption expenditures, the Fed's preferred inflation gauge. On Friday, the euro zone releases an inflation update and the US releases July nonfarm payrolls and unemployment data.
Locally, the Thai General Insurance Association presents an industry outlook. On Friday, the Bangkok Post Forum 2025, "Shaping the Future Economy in the New Global Order", takes place.
STOCKS TO WATCH: The Thai-Cambodian conflict has had a significant impact on listed companies with exposure in Cambodia, says Krungsri Securities. SAV is the most heavily affected as 100% of its revenue is derived from Cambodia. This is followed by CBG at 13%. Other companies with moderate exposure include: OSP (5%), OR (4%), BDMS (3.7%), MAJOR (3%), BH (3%). Lower exposure is seen in BCH (1.7%), CHG, PTT (1% each). Companies with minimal exposure (less than 1%) include TOP, PTTGC, IRPC, CPF and TFG.
Key Q2 earnings to watch next week: SCC, MINT and ADVANC are among the biggest names on the calendar. Large-cap stocks, especially in banking and energy, are expected to attract continued fund inflows. Recommended picks include ADVANC, AMATA and SCB.
InnovestX Securities also highlights sustained foreign fund inflows into the region, which are likely to benefit the Thai market. However, short-term sentiment could be weighed down by tariff uncertainties and the Thai-Cambodian border situation. Top stock picks are BCPG, HMPRO and CHG.
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Bangkok Post
14 hours ago
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WASHINGTON - The US central bank is widely expected to hold off slashing interest rates again at its upcoming meeting, as officials gather under the cloud of an intensifying pressure campaign by President Donald Trump. Policymakers at the independent Federal Reserve have kept the benchmark lending rate steady since the start of the year as they monitor how Trump's sweeping tariffs are impacting the world's biggest economy. With Trump's on-again, off-again tariff approach -- and the levies' lagged effects on inflation -- Fed officials want to see economic data from this summer to gauge how prices are being affected. When mulling changes to interest rates, the central bank -- which meets on Tuesday and Wednesday -- seeks a balance between reining in inflation and the health of the jobs market. But the bank's data-dependent approach has enraged the Republican president, who has repeatedly criticised Fed Chair Jerome Powell for not slashing rates further, calling him a "numbskull" and "moron". Most recently, Trump signalled he could use the Fed's $2.5 billion renovation project as an avenue to oust Powell, before backing off and saying that would be unlikely. Trump visited the Fed construction site on Thursday, making a tense appearance with Powell in which the Fed chair disputed Trump's characterisation of the total cost of the refurbishment in front of the cameras. But economists expect the Fed to look past the political pressure at its policy meeting. "We're just now beginning to see the evidence of tariffs' impact on inflation," said Ryan Sweet, chief US economist at Oxford Economics. "We're going to see it (too) in July and August, and we think that's going to give the Fed reason to remain on the sidelines," he told AFP. - 'Trial balloon' - Since returning to the presidency in January, Trump has imposed a 10% tariff on goods from almost all countries, as well as steeper rates on steel, aluminum and autos. The effect on inflation has so far been limited, prompting the US leader to use this as grounds for calling for interest rates to be lowered by three percentage points. Currently, the benchmark lending rate stands at a range between 4.25% and 4.50%. Trump also argues that lower rates would save the government money on interest payments, and floated the idea of firing Powell. The comments roiled financial markets. "Powell can see that the administration floated this trial balloon" of ousting him before walking it back on the market's reaction, Sweet said. "It showed that markets value an independent central bank," the Oxford Economics analyst added, anticipating Powell will instead be more influenced by labour market concerns. Powell's term as Fed chair ends in May 2026. - Jobs market 'fissures' - Analysts expect to see a couple of members break ranks if the Fed's rate-setting committee decides for a fifth straight meeting to keep interest rates unchanged. Sweet cautioned that some observers may spin dissents as pushback on Powell but argued this is not necessarily the case. "It's not out-of-line or unusual to see, at times when there's a high degree of uncertainty, or maybe a turning point in policy, that you get one or two people dissenting," said Nationwide chief economist Kathy Bostjancic. Fed Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman have both signalled openness to rate cuts as early as July, meaning their disagreement with a decision to hold rates steady would not surprise markets. Bostjancic said that too many dissents could be "eyebrow-raising," and lead some to question if Powell is losing control of the board, but added: "I don't anticipate that to be the case." For Sweet, "the big wild card is the labour market". There has been weakness in the private sector, while the hiring rate has been below average and the number of permanent job losers is rising. "There are some fissures in the labor market, but they haven't turned into fault lines yet," Sweet said. If the labour market suddenly weakened, he said he would expect the Fed to start cutting interest rates sooner.
Bangkok Post
2 days ago
- Bangkok Post
All eyes on Trump's August 1 deadline
As global markets continue to digest US President Donald Trump's latest trade announcements, attention now turns to the rapidly approaching Aug 1 deadline that could reshape Southeast Asia's economic landscape. While recent bilateral deals have provided some clarity, Thailand faces the dual challenge of securing favourable trade terms with the US while managing an unexpected military escalation with Cambodia. Trump's tariff template The MSCI World Index of equities has continued its upward trajectory following Trump's announcement of new trade agreements that appear to establish a regional framework. Japan secured a 15% tariff rate (down from 24%), while the Philippines and Indonesia both achieved 19% rates, down from 20% and 32% respectively. These developments, combined with Vietnam's earlier 20% agreement, suggest Southeast Asian nations may face similar tariff levels. The US-Japan deal, which Trump dubbed "the largest trade deal in history", reveals the administration's negotiating blueprint. Japan's commitment to establish a $550-billion US investment fund, alongside promises to purchase 100 Boeing aircraft and billions of dollars' worth of defence equipment annually, demonstrates the scale of concessions required to secure preferential rates. However, the agreement has drawn sharp criticism from US automotive manufacturers, who argue that reducing tariffs on Japanese cars fails to address the core trade imbalance while disadvantaging American producers. With automobiles and auto parts comprising 80% of the US-Japan trade gap, industry representatives question whether the deal serves American interests. EU prepares for trade war Meanwhile, the European Union is preparing its most powerful trade retaliation tool -- the Anti-Coercion Instrument -- should Trump proceed with 30% tariffs on European goods. The EU outlined counter-tariffs on $117 billion worth of American products, including Boeing aircraft, automobiles and bourbon whiskey, signalling that trade tensions could escalate beyond Asia. European officials have indicated a willingness to accept 15% tariffs on most goods, while negotiating to keep rates on steel and aluminium at current levels, though these products may still face 50% duties. AI and monetary policy Adding to the complex global landscape, Trump signed executive orders launching his "AI Action Plan", aimed at maintaining American technological leadership through deregulation and energy infrastructure expansion. The plan emphasises federal standardisation over state-by-state regulation, while strengthening export controls to counter Chinese artificial intelligence development. On monetary policy, Trump's unprecedented visit on Thursday to the Federal Reserve -- the first presidential visit in nearly two decades -- highlighted ongoing tensions with chairman Jerome Powell over both interest rate policy and the central bank's building renovation costs. Despite public disagreements, Trump indicated he would not remove Powell over cost overruns, while continuing to pressure for rate cuts. Precarious position For Thailand, the stakes could not be higher. Without a successful trade negotiation with the US, the kingdom faces a punitive 36% tariff rate -- among the highest proposed -- creating a significant competitive disadvantage against regional peers. This cost differential of 10 to 16 percentage points compared with Vietnam (20%) and Malaysia (25%) could prompt foreign investors to relocate production bases. Finance Minister Pichai Chunhavajira's confidence in securing competitive rates reflects the urgency of Thailand's situation. The country may need to consider sacrificing protection for certain sectors to achieve an agreement that benefits the broader economy. Cambodian conflict Thailand's trade negotiations have been complicated by an unexpected military confrontation with Cambodia. Following a Cambodian artillery attack on Thai territory, Thailand responded by deploying F-16 fighter jets to strike Cambodian firing positions, leading to a temporary 0.58% decline in the SET index. While the immediate market impact appears limited -- Cambodia represents only 3% of Thailand's total exports -- the conflict could affect specific industries dependent on the Cambodian market, particularly energy products and consumer goods including beverages and fertilisers. For Cambodia, the economic consequences are far more severe, with potential losses including worker remittances worth 6.6% of GDP and shortages of essential goods including refined oil, fertilisers and food products. Market implications InnovestX analysis suggests limited impact on major Thai stocks, as most SET50/SET100 companies have minimal Cambodian exposure. However, stocks with significant Cambodian revenue face higher risks, including Samart Aviation Solutions (SAV) with 100% exposure, Carabao Group (CBG) at 14% and the consumer finance firm Aeon Thana Sinsap (AEONTS) with 7%. We maintain a cautious outlook, noting Thailand's structural disadvantage when it comes to trade requires urgent diplomatic resolution before the Aug 1 deadline. In the longer term, Thailand must diversify its trade relationships and accelerate free trade agreement negotiations with other regions to reduce dependence on the US market. Investment strategy In this environment of heightened volatility, investors are advised to maintain diversified portfolios across defensive stocks, government bonds, commodities including gold, and alternative assets. The Thai stock market is expected to consolidate while awaiting new catalysts and monitoring trade negotiation progress. As the Aug 1 deadline approaches, Thailand's ability to navigate both trade negotiations and regional security challenges will prove crucial for maintaining investor confidence and economic stability. The coming weeks will determine whether the kingdom can secure terms that preserve its competitive position in an increasingly fragmented global economy.
Bangkok Post
2 days ago
- Bangkok Post
Investors lock in profits before tariff deadline
RECAP: Asian shares eased back yesterday, with Japanese markets retreating from a record peak, as investors locked in profits ahead of a crucial week that includes US President Donald Trump's tariff deadline. Trading in Thailand was also subdued, as investors monitored the growing border conflict with Cambodia and waited for news on the trade and tariff front. The SET index moved in a range of 1,191.65 and 1,227.71 points this week, before closing yesterday at 1,217.15, up 0.9% from the previous week, with daily turnover averaging 41.5 billion baht. Foreign investors were net buyers of 9.07 billion baht. Retail investors were net sellers of 5.75 billion baht, followed by institutional investors a 3.28 billion, and brokerage firms at 42.1 million. NEWSMAKERS: President Donald Trump announced a "massive" trade deal with Japan that would include a 15% tariff on imports. Under the deal, Japan will invest $550 billion into the US, which Trump said would receive 90% of the profits. Trump also agreed to reduce threatened tariffs on the Philippines, but only by one percentage point to 19%, while Manila would open up completely to US goods, he said after meeting with counterpart Ferdinand Marcos at the White House. US Treasury Secretary Scott Bessent signalled a 90-day extension of the trade "truce" with China, saying he would meet his Chinese counterparts in Stockholm next week for tariff talks, paving the way for continued trade negotiations and keeping triple-digit tariffs on hold. The EU is preparing to impose counter-tariffs on $117 billion worth of American products, including aircraft, automobiles and bourbon whiskey, if trade talks fail and Washington proceeds with threats to impose 30% tariffs on EU imports starting Aug 1. The European Central Bank kept interest rates unchanged for the first time in more than a year as it looks for clarity on EU trade with the US. President Christine Lagarde said the bank was now in a "wait-and-see" mode, with inflation at the 2% goal and the economy performing in line with or better than expectations. China's yuan hit an eight-month high against the dollar on Thursday, after the People's Bank of China set the midpoint rate at 7.1385 per dollar, its strongest since Nov 6. Trump downplayed his clash with Fed chairman Jerome Powell over cost overruns during a tour of the central bank's renovation project, making it clear that he saw lower interest rates as a more pressing concern. The EU announced a new sanctions package against Russia, its most severe yet, cutting the Russian crude oil price cap to $47.50 a barrel from $60, imposing sanctions on "shadow fleets" transporting Russian oil, and an expanded scope that includes banking and military industrial sectors. Nvidia is reportedly facing difficulty delivering its H20 AI chips to China despite recently announcing plans to resume sales, as it had earlier returned production quotas booked with Taiwan Semiconductor Manufacturing Co following a US government ban in April. It may take up to nine months to resume production. Japanese government bonds (JGBs) have been one of the world's most stable securities for decades. However, the 30-year JGB yield this week rose to 3%, the highest since the 2008 subprime crisis, reflecting massive selling. This may raise concern over a new round of financial crisis. South Korea's economy grew 0.5% year-on-year in the second quarter, the central bank said, driven by stronger private consumption and 4.2% export growth, the best in nearly five years. Tesla chief executive Elon Musk said reductions in US government support for EV makers could lead to a "few rough quarters". His company reported a second-quarter profit of $1.2 billion, down from $1.4 billion a year earlier, as sales fell to $22.5 billion from $25.5 billion. Google's parent Alphabet said 2025 capital expenditures will be $85 billion, or $10 billion greater than an earlier forecast. Its sales climbed to $81.7 billion, slightly above projections, while second-quarter profit of $28.2 billion also beat expectations. Malaysia reported second-quarter GDP growth of 4.5% year-on-year, better than the market consensus of 4.2% and up from 4.4% in the previous quarter. Finance Minister Pichai Chunhavajira says the United States has now looked at 90% of Thailand's new trade proposals and is expected to give a clear answer before Aug 1. Thailand hopes to receive a reduction in its tariff rate from 36% to below 20%, or similar to the rates in other Asean countries. Deputy Finance Minister Paopoom Rojanasakul says negotiations with the US will not include full opening of markets for US goods with zero tariffs, as seen in other countries that have reached agreements, due to concerns about domestic economic impact, especially on agricultural products. The cabinet approved the nomination of Vitai Ratanakorn as the next governor of the Bank of Thailand. The president of the Government Savings Bank was chosen over BoT deputy governor Roong Mallikamas. Finance Minister Pichai said he hopes to see monetary and fiscal policies moving in the same direction to address challenges. The Board of Investment said the value of applications in the first six months rose 139% from a year earlier to a record 1.06 trillion baht ($32.5 billion), led by a 20-fold increase to 523 billion baht in digital sector pledges, electrical and electronic goods and rail infrastructure. Car production in Thailand rose for a second straight month in June, up 12% from a year earlier to 130,223 units, the Federation of Thai Industries said. The increase followed a rise of 10.3% in May, after nearly two years of contraction. The Ministry of Finance is studying the imposition of a higher excise tax on imported electric vehicles that use a low proportion of local content. The dollar value of Thai exports rose 15.5% year-on-year in June, reflecting the continued front-loading of shipments in anticipation of higher US tariffs in the second half of this year. The House of Representatives approved amendments to the National Savings Fund Act to allow the sale of "retirement lottery" tickets as an alternative for people to save money and create a sustainable savings system. Tickets would be issued weekly with a cap on purchases at 3,000 baht per month. Suvarnabhumi Airport has more airlines serving it -- 113 -- than any other airport in the world, according to data reviewed by FlightConnections as of April 16 this year. The Tourism Authority of Thailand has set a revenue target for 2026 of 2.8 trillion baht, up 5% from this year, while acknowledging risk factors that could repeat some negative trends seen in 2025, such as a 33% decline in Chinese arrivals. Gulf Development, Thailand's largest energy company by market value, has purchased the entire shareholding of the Pak Lay hydropower project in Laos for $128 million. The Government Savings Bank is preparing to launch G-token savings bonds worth 5 billion baht, offering higher returns than market interest rates due to lower issuance costs. These will be sold alongside regular bonds worth 25 billion baht, expected to begin in late August. Real estate developers propose amending property rights laws to promote optimal land utilisation, support foreign investment and megaprojects. They suggest extending long-term land lease rights to 50-60 years from 30 and reducing social risks. The Bank of Thailand issued a warning letter following the cabinet approval of the Financial Hub Bill draft, emphasising the need to manage money laundering and terrorism financing risks, and ensure business separation from mainstream financial system operations. COMING UP: On Monday, Canada releases monthly wholesale sales. On Tuesday the US releases consumer confidence, job openings and weekly crude oil stocks. Wednesday brings German, euro zone and US GDP data; US Federal Reserve and Bank of Japan rate decisions, and Chinese manufacturing PMI. On Thursday, Germany releases an inflation update and the US releases core personal consumption expenditures, the Fed's preferred inflation gauge. On Friday, the euro zone releases an inflation update and the US releases July nonfarm payrolls and unemployment data. Locally, the Thai General Insurance Association presents an industry outlook. On Friday, the Bangkok Post Forum 2025, "Shaping the Future Economy in the New Global Order", takes place. STOCKS TO WATCH: The Thai-Cambodian conflict has had a significant impact on listed companies with exposure in Cambodia, says Krungsri Securities. SAV is the most heavily affected as 100% of its revenue is derived from Cambodia. This is followed by CBG at 13%. Other companies with moderate exposure include: OSP (5%), OR (4%), BDMS (3.7%), MAJOR (3%), BH (3%). Lower exposure is seen in BCH (1.7%), CHG, PTT (1% each). Companies with minimal exposure (less than 1%) include TOP, PTTGC, IRPC, CPF and TFG. Key Q2 earnings to watch next week: SCC, MINT and ADVANC are among the biggest names on the calendar. Large-cap stocks, especially in banking and energy, are expected to attract continued fund inflows. Recommended picks include ADVANC, AMATA and SCB. InnovestX Securities also highlights sustained foreign fund inflows into the region, which are likely to benefit the Thai market. However, short-term sentiment could be weighed down by tariff uncertainties and the Thai-Cambodian border situation. Top stock picks are BCPG, HMPRO and CHG.
