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Thai investment applications top $25 billion in 2019

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BANGKOK (Reuters) – Investment applications in Thailand reached a total 756 billion baht ($25.07 billion) worth of projects in 2019, down about 16% from the previous year but slightly beating a target, the state investment agency said on Monday.

The agency targeted 750 billion baht in investment pledges last year, down from 902 billion baht recorded in 2018.

In 2019, Thai and foreign firms submitted 1,624 projects in Southeast Asia’s second-largest economy, the Board of Investment (BOI) said in a statement.

Of those, about 445 billion baht of planned projects was for the Eastern Economic Corridor, a centerpiece of the government’s policy to spur growth and attract hi-tech industries such as robotics and aviation.

Last year, China beat Japan for the first time as Thailand’s top foreign investor, as firms relocated production due to the U.S.-China trade war, Deputy Prime Minister Somkid Jatusripitak told reporters.

“That’s because costs in China are higher,” he said, adding China’s planned projects were worth 260 billion baht, far above Japan’s 73 billion baht.

Last year, the government launched a relocation package, including tax incentives and special investment zones, to draw foreign firms seeking to escape the trade war.

Somkid said he had asked the BOI and the finance ministry to consider further measures to spur investment over the next six months because private investment had remained low.

The BOI is expected to meet again early next month and offer an investment target for 2020 as it is assessing economic conditions, agency head Duangjai Asawachintachit said.

Thailand’s growth has lagged most regional peers for years. The central bank has projected growth of 2.8% this year after a five-year low of 2.5% in 2019.

(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Anil D’Silva)

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Toronto market hits 7-week low on Omicron uncertainty

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Canada‘s main stock index fell on Wednesday to its lowest level in over seven weeks as the United States reported its first case of the Omicron variant that investors fear could impede economic recovery, with the index giving back its earlier gains.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 195.39 points, or 0.95%, at 20,464.60, its lowest closing level since Oct. 12.

Wall Street also closed lower as the U.S. Centers for Disease Control and Prevention said the country had detected its first case of the new COVID-19 variant, which is rapidly becoming dominant in South Africa less than four weeks after being detected there and has spread to other countries.

It might take longer than expected for supply chain disruptions to abate, “especially if we have renewed shutdowns in Asia,” said Kevin Headland, senior investment strategist, Manulife Investment Management.

Still, Headland does not expect the new variant to lead to an economic recession or a bear market for stocks in 2022, saying: “Reaction to headline news provides opportunities for those that have a longer-term timeframe to add in the equity markets.”

The TSX will add to its recent record high over the coming year as the domestic economic recovery helps underpin corporate earnings, but gains are expected to slow from 2020’s breakneck pace, a Reuters poll found.

The technology sector fell 2.7%, while energy ended 1.9% lower as oil was unable to sustain an earlier rally. U.S. crude oil futures settled 0.9% lower at $65.57 a barrel

The materials group, which includes precious and base metals miners and fertilizer companies, lost 2.2%.

Financials were a bright spot, advancing 0.4%, helped by gains for Bank of Nova Scotia as some analysts raised their target price on the stock.

Bombardier Inc was among the biggest decliners. Its shares sank 10.4%.

 

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Peter Cooney)

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Canada’s TSX to extend record-setting rally; pace of gains to slow: Reuters poll

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Canada‘s main stock index will add to its recent record high over the coming year as the domestic economic recovery helps underpin corporate earnings, but gains are expected to slow from 2020’s breakneck pace, a Reuters poll found.

The median prediction of 26 portfolio managers and strategists was for the S&P/TSX Composite index to rise 9.1% to 22,540 by the end of 2022.

That’s a move that would eclipse last month’s record high of 21,796.16 and compares with an August forecast of 22,000. It was then expected to edge up to 23,150 by the middle of 2023.

The index had advanced 18.5% since the start of the year, putting it on track for its second biggest gain since 2009.

“We think the economy and markets will continue to progress further into the mid-cycle phase next year,” said Angelo Kourkafas, investment strategist at Edward Jones. “We are past the strongest point of the cycle, but there is plenty of runway ahead, especially from an economic standpoint.”

Canada‘s economy https://www.reuters.com/world/americas/canadian-economy-posts-annualized-gain-54-q3-october-gdp-seen-up-08-2021-11-30 grew at an annualized rate of 5.4% in the third quarter, beating analyst expectations, and growth most likely accelerated in October on a manufacturing rebound.

“Banks can continue to benefit from an improving economy and reducing loan loss provisions and resource companies can benefit from higher commodity prices,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

Combined, the financial services and resource sectors account for 55% of the Toronto market’s valuation.

Nearly all participants that answered a separate question on the outlook for corporate earnings expected earnings to improve. But the pace of growth could slow.

“We expect a decelerating pace of (earnings) growth,” said Chhad Aul, chief investment officer & head of multi-asset solutions at SLGI Asset Management Inc. “In particular, we expect the recent strong earnings growth in the energy sector to begin to moderate.”

The price of oil, a key driver of energy sector earnings, has tumbled 24% since October, pressured by rising coronavirus cases in Europe and the detection of the possibly vaccine-resistant Omicron variant.

Another risk to the outlook could be a reduction in policy support, say investors.

With inflation climbing, the Bank of Canada https://www.reuters.com/world/americas/bank-canada-signals-it-could-hike-rates-sooner-than-expected-2021-10-27 has signaled it could begin hiking interest rates as soon as April and the Federal Reserve https://www.reuters.com/markets/us/powell-yellen-head-congress-inflation-variant-risks-rise-2021-11-30 is mulling whether to wrap up tapering of bond purchases a few months sooner.

“The key is the pace of both fiscal and monetary policy normalization,” said Ben Jang, a portfolio manager at Nicola Wealth. “This process will likely lead to more volatility in markets, potentially returning to an environment where we will see drawdowns of more than 10%.”

Asked if a correction was likely over the coming six months, nearly all respondents said yes.

 

(Reporting by Fergal Smith; polling by Mumal Rathore and Milounee Purohit; editing by David Evans)

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Investment

Toronto index up on energy boost, easing Omicron fears

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Canada‘s main stock index rose on Wednesday mirroring global mood, as energy stocks gained on stronger oil prices and as concerns around the new coronavirus variant Omicron eased.

At 9:41 a.m. ET (14:41 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 224.87 points, or 1.09%, at 20,884.86, a day after posting its biggest decline since October 2020.

The energy sector climbed 1.9% with oil prices rising more than 3% as major producers prepared to assess the threat posed by the new Omicron variant of the coronavirus to energy demand. [O/R]

“Canadian markets rebounded with the markets around the world and at least we’re off to a bit of a relief rally to start December. The price of oil is bouncing back as well, which also helped the Canadian market today,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

Global equities rose, reversing much of the previous session’s losses, as investors used the dip in prices to bet the latest COVID-19 variant would not derail the economic recovery. [MKTS/GLOB]

Toronto-listed technology stocks rose 0.9% tracking gains in U.S. tech-heavy Nasdaq index.

The financials sector, which account for about 30% of the Toronto market’s value, gained 1.3%.

However, further gains in the sub-index were limited by National Bank of Canada, down 2.1%, as its earnings fell short of analysts’ estimates, despite fourth-quarter profit rising and the lender raising dividend payouts.

The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.7% as gold futures rose 0.7% to $1,785.6 an ounce. [GOL/]

On the economic front, domestic manufacturing activity expanded at a slightly slower but still robust pace in November as production accelerated in spite of severe supply bottlenecks, data showed.

HIGHLIGHTS

The TSX posted no new 52-week high or low.

Across Canadian issues, there were six new 52-week highs and 11 new lows, with total volume of 47.22 million shares.

 

(Reporting by Amal S in Bengaluru; Editing by Vinay Dwivedi)

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