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The SET index gained 1.8% for the week to close on Friday at 1,500.40, just above the 1,500 psychological level, despite that the Thai third-quarter 2016 GDP came in at 3.2% on Monday, missing the consensus estimate by 20 basis points and the continuation of foreign investor selling. According to the SET data as of November 25, net sells by foreign investors surged to 31.84 billion baht month-to-date, compared to net sells of 14.48 billion baht during the entire month of November last year. The trading range between 1,491 and 1,513 may be established, but one should pay attention to a 1,513 level retest, as a breakout could send the SET index to the 1,560 level.
The Thai baht weakened slightly against the U.S. dollar, as the dollar is way overbought. For the week, the USD/THB exchange rate inched up 0.11% to close on Friday at 35.63 baht per dollar, while the U.S. Dollar index (DXY), essentially the USD/EUR exchange rate, stalled at 101.55, still at a thirteen-year high. The recent data released by the U.S. Department of the Treasury showed that Thailand bought $18 billion worth of U.S. Treasury Securities in the past 12 months, a 56.4% increase, and now holds about $49.9 billion of U.S. Treasury Securities, at the end of September 2016.
The yield of Thailand 10-year government bonds gained 0.75% for the week, to close at 2.67% on Friday. The yield spread between the Thailand 10-year bond and the benchmark U.S. 10-year Treasury Note, yielding at 2.359% on Friday, widened to 0.311 percentage points.
Shares of PTT PCL (SET:PTT) and PTT Exploration and Production PCL (SET:PTTEP) were up 1.16% and 2.17%, respectively, for the week, along with a small gain in Brent crude oil prices. The WTI crude price lost 0.65% this week, to close at $46.06 per barrel on Friday, while the Brent crude spot price gained 0.77% to close at $47.24 per barrel, despite a bullish EIA weekly U.S. oil inventory report and Russia reiterating its readiness to freeze oil production at its current levels.
OPEC oil ministers will meet on November 28 in Vienna to discuss the contribution that producers outside OPEC will make to a proposed supply-limiting agreement. OPEC agreed in September at a meeting in Algeria to reduce its production to between 32.5 million and 33 million barrels per day (bpd) and had proposed that non-OPEC countries cut oil production by 500,000 bpd.
The EIA weekly U.S. oil inventory report on Wednesday showed that domestic crude supplies fell by 1.3 million barrels to 489.0 million barrels, excluding the Strategic Petroleum Reserve, in the week ending November 18, compared to S&P Global Platts analysts’ expectations for no change. The American Petroleum Institute (API) inventory data on Tuesday showed a U.S. crude inventory decrease of 1.3 million barrels.
Separately, the EIA said the weekly U.S. crude oil production dropped 9,000 bpd for the week ending November 18, to 8.69 million bpd. Weekly U.S. crude oil output has fallen about 9.57% from the peak level of 9.61 million bpd during the week ending June 5, 2015. Houston-based oilfield services company Baker Hughes Inc. said on Friday that the U.S. oil rig count rose by another 3 to 474, compared to 316, when the rig count hit the low on June 6, 2016. |
