Thailand Monthly Market Commentary and Investment strategy
Thai Equity Indexes
SET
SET50
31-MAR
28-APR
+/-
+/- (%)
1,575.11
1,566.32
-8.79
-0.56%
996.44
993.98
-2.46
-0.25%
Net Fund Flow(Million Bht) (1-28 APR)
+/-
Local Institution
-4,779.67
Proprietary Trading
9,157.49
Foreign Investors
-49.83
Retail Investors
Global Equity Indexes
-4,327.99
In March 2017, the Thai economy continued to expand. Export of
goods showed signs of broad-based improvements, consistent with
the steady recovery of external demand. The tourism sector
rebounded from the previous month. Private consumption gained
traction, particularly for spending on durables, as supported by
improved household income and greater consumer confidence.
Public spending continued to drive the economy, especially in public
investment. However, manufacturing production and private
investment contracted from the same period last year.
 Manufacturing sector: The Manufacturing Production Index (MPI)
+/-
20,663.22
20,940.51
277.29
1.34%
2,362.72
2,384.20
21.48
0.91%
NIKKEI 225
18,909.26
19,196.74
287.48
1.52%
Germany DAX
12,312.87
12,438.01
125.14
1.02%
France CAC 40
5,122.51
5,267.33
144.82
2.83%
FTSE 100
7,322.92
7,203.94
-118.98
-1.62%
64,984.07
65,403.25
419.18
0.65%
574.74
573.23
-1.51
-0.26%
29,620.50
29,918.40
297.90
1.01%
3,222.51
3,154.66
-67.86
-2.11%
YoY vs. -8.2% prev), while food (+1.0% YoY vs. +2.2% prev) and
China HSCEI
10,273.67
10,219.89
-53.78
-0.52%
IC (+1.5% YoY vs. +15.1%) also softened. On a positive note,
HSI
24,111.59
24,615.13
503.54
2.09%
9,811.52
9,872.00
60.48
0.62%
163.34
167.54
4.20
2.57%
S&P 500
Brazil BOSVESPA
MSCI Russia Index
India SENSEX
SHCOMP
TWSE
MSCI Golden Dragon
Commodities
Gold
31-MAR
28-APR
+/- (%)
Equity Market: Thailand
Economic Review
28-APR
DJIA
31-MAR
May 2017
+/-
+/- (%)
1,247.30
1,268.30
21.00
1.68%
NYMEX WTI
50.60
49.33
-1.27
-2.51%
Brent
52.83
51.73
-1.10
-2.08%
Bonds
31-MAR
28-APR
1.25
1.26
0.79
10y US Treasury
2.39
2.28
-10.72
1y Thai Govt Bond
1.55
1.50
-4.60
5y Thai Govt Bond
2.18
2.18
-0.60
10y Thai Govt Bond
2.69
2.71
2.70
USD/THB
31-MAR
34.35
28-APR
34.587
+/0.237
expectations at -0.7% YoY. Key drags were still vehicles (-9.5%
petroleum (+7.4% YoY vs. -9.2% prev), HDD (+32.7% YoY vs.
+3.1% prev), and electrical appliances (+2.0% YoY vs. -5.9%
prev) saw a sharp recovery. CAPU edged up to 60.3%, after
seasonal adjustment, from +59.4% prev.
 Consumption sector: Private consumption indicators expanded
from increased spending on durable goods especially on
+/-
2y US Treasury
FX
dipped -0.5% YoY in Mar (vs. -1.1% prev), in line with market
+/- (%)
0.69%
passenger cars. This was supported by the improved household
income, particularly farm income on the back of higher rubber
price and rice production. Overall consumer confidence also
edged up. In addition, financial institutions expect to slightly ease
their credit standards for auto leasing. Meanwhile, spending on
non-durable goods picked up slightly, attributed mainly to higher
fuel consumption as a result of reduction in oil prices.
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Thailand Monthly Market Commentary and Investment strategy
 Investment sector: Private investment indicators contracted
from last year for both construction and investment in
machinery and equipment investments. The decline followed
an acceleration in earlier periods, especially that in the
energy, services and export-related businesses, which in
turn reflected the soft recovery of private investment.
However, investment in commercial cars rose for four
consecutive months thanks to public investment’s
infrastructure projects and increasing farm income.
 External front: The value of merchandise exports
continuously expanded in most categories, with a growth of
10.8 percent compared to the same period last year.
Excluding gold, the expansion was 12.1 percent thanks to
growth in various products. (1) Export of electronics and
optical appliances (2) Export of petroleum-related products
(3) Export of automotive and export of big bikes to Europe
and ASEAN (4) Export of electrical appliances, especially air
conditioners and solar panels.
The value of merchandise imports grew by 22.4 percent from
the same period last year. Excluding gold, the value of
merchandise imports expanded by 21.4 percent. In
particular, import of raw and intermediate materials—
particularly fuel and metals—grew on the back of higher
global crude oil prices. Moreover, import of parts for
electronics and electrical appliances expanded, consistent
with an upward export trend of such products.
May 2017
The current account posted a surplus due to the trade surplus,
as supported by steady improvements in exports. On the other
hand, the capital and financial accounts registered a deficit due
to: (1) portfolio investment abroad in both debt and equity
securities, (2) Other Depository Corporations’ increased
deposits abroad and short-term loan repayment to adjust their
foreign currency positions, and (3) direct investment abroad by
Thai corporates.
 Tourism sector: Tourism sector improved with a rebound in the
number of foreign tourists, registering a 2.0 percent annual
growth. After seasonal adjustment, the number of foreign tourists
increased by 3.3 percent from the previous month, mainly from
China and Malaysia. However, tourists from Europe excluding
Russia slowed down in March before the Easter holiday would
take place in April this year.
 Headline inflation decelerated to 0.76 percent from 1.44 percent
in the previous month. This was due to a decrease in fresh food
prices as their supply improved as well as the decline in
domestic petroleum prices.
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Thailand Monthly Market Commentary and Investment strategy
April Market Review
The SET moved to test resistances at 1590, supported by foreign
fund flow at the end of the month. News about the US studying
its trade deficit with 16 trade partners, including Thailand, and
the Fed’s discussion about balance sheet normalization moved
the SET little. After testing resistance of 1590, the SET steadily
moved down for no discernible reason since foreign markets
were recovering. In France, Macron and Le Pen led the first
round and passed to the May 7 final round. Markets expect
Macron to win, eliminating the worry that France will exit the EU.
Trump finally announced the details of his tax reduction policies
near the end of the month, but markets are skeptical. The SET
closed the month at 1566.32, -0.6%MoM. Foreign investors were
net buyers of Bt1.8bn.
May 2017
May Market Outlook
In May, we expect the SET index to move in the same range 1530
– 1590. Key issues for this month are: 1) Earnings reports from
mid and small caps, on which we have a neutral view. 2) Thai
1Q17 GDP (May 15), which is expected to grow at 3.0–3.3%YoY:
a beat will be positive, a miss negative. 3) BOT MPC meeting
(May 24), at which no change in interest rate of 1.5% is
anticipated. 4) MSCI re-balance announced on May 15. 5)
Possible upside: A win by Le Pen in the French final round on May
7 – since if she wins, foreign funds may flow to developing
markets. Another upside would be if OPEC extends its oil
production reduction before the official meeting on May 25.
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Thailand Monthly Market Commentary and Investment strategy
May 2017
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