|Bid||9.50 x 27000|
|Ask||9.51 x 28000|
|Day's Range||9.32 - 9.55|
|52 Week Range||9.22 - 14.08|
|Beta (3Y Monthly)||1.22|
|PE Ratio (TTM)||7.16|
|Forward Dividend & Yield||0.77 (8.33%)|
|1y Target Est||16.00|
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. The Bank of Thailand unexpectedly cut its benchmark interest rate Wednesday for the first time in more than four years to boost the economy, and said it sees more room to ease as global risks surge.The Monetary Policy Committee voted five to two to cut its key rate by a quarter-percentage point to 1.5%, the central bank said in a statement. Just two of the 29 economists in a Bloomberg survey expected the cut, while the rest forecast no change.The central bank earlier had resisted rate cuts, voicing concern about consumer debt and risks to financial stability. However, the economic outlook has deteriorated sharply in recent months amid escalating U.S.-China trade tensions, a worsening drought and a surging currency, which is hurting exports and tourism. The baht has gained about 8% against the dollar in the past year, the best performer in Asia.“Sluggish exports and domestic consumption will make it very tough for the Thai economy this year,” said Prapas Tonpibulsak, chief investment officer at Talis Asset Management Co. in Bangkok. “We expect more cuts by the central bank through 2020 because it must keep easing monetary policy to make it more effective.”The baht was trading down 0.1% at 3:29 p.m. in Bangkok. The benchmark SET index gained as much as 0.7%, its biggest advance in more than two weeks.What Bloomberg’s Economists SayThe Bank of Thailand’s rate cut on Wednesday should help slow appreciation pressures on the baht. The central bank, though, sounds wary that more work might need to be done. Indeed, we expect more measures to be rolled out, barring a stabilization in the baht against trading partner currencies, especially the yuan.Click here to read the full report.\-- Tamara Mast Henderson, Asean economistCentral banks across Asia are easing policy to boost growth and keep pace with the U.S. Federal Reserve, which cut its benchmark rate by 25 basis points last week. New Zealand and India cut interest rates earlier Wednesday -- in both cases by more than forecast -- while the Philippine central bank is expected to cut its key rate Thursday after inflation reached a two-year low in July.In its decision, the Bank of Thailand noted the economy was expected to slow and inflation could come in below target. The currency’s impact on the economy could be heightened amid global trade tensions, the bank said, adding that it would evaluate whether more steps were needed to restrain the baht.Sunthorn Thongthip, a strategist at Kasikornbank Pcl, said sectors that will benefit most from Wednesday’s cut include the property market, infrastructure funds, utilities and smaller banks, while big banks could be negatively impacted.“The depreciation might not be enough to really improve the outlook for exports,” he said.Thailand’s new government, which took office in July, wants fiscal and monetary policy to be synchronized to protect the economy against trade tensions.“This should stem some of the appreciation pressure, which the central bank was trying to do with other measures that proved to be ineffective,” said Prakash Sakpal, an economist in Singapore at ING Groep NV, who expects another quarter-point cut this year. “It’s not just required for arresting the currency appreciation but also for greater policy accommodation, given that there’s no clarity yet on fiscal stimulus.”Frances Cheung, head of Asia macro strategy at Westpac Banking Corp. in Singapore, said Thailand’s real policy rate remains relatively low. The central bank “probably would take time to gauge the transmission first before considering the next move,” she said.(Recasts lead, adds analyst comments throughout.)\--With assistance from Tomoko Sato, Chester Yung, Lilian Karunungan, Anuchit Nguyen, Siraphob Thanthong-Knight, Michelle Jamrisko and Margo Towie.To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at email@example.comTo contact the editors responsible for this story: Sunil Jagtiani at firstname.lastname@example.org, Michael S. Arnold, Nasreen SeriaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- If the European Central Bank decides to cut interest rates and restart bond purchases, it would hurt the euro-area economy more than help it, according to ING Groep’s chief executive officer.Ralph Hamers said on a call with journalists Thursday that it’s “not the moment” for such support measures. Lending demand in the region, he argued, is already sufficiently met, and pessimistic tones from the central bank could reinforce consumers’ waning confidence.“A further increase of the program or a decrease of rates into even further negative territory is hurting consumer confidence in the future,” he said. “We see that already. We are decreasing the rate, in some countries even to negative, but savings keep coming in. Why is that? Because they are uncertain about their financial future.”The CEO argued that the region’s protracted manufacturing-led slowdown has been driven by global uncertainties as the U.S. and China spar over trade policies and plans for the U.K.’s exit from the European Union remain unclear. The ECB announced last week that it would study possible measures in the coming weeks, with most analysts penciling in a rate cut and a renewed round of quantitative easing for September.“The issue we have in Europe is the absence of confidence on the production side as a result of geopolitical tensions, as well as the trade tensions,” Hamers said. “I don’t think that QE is a recipe to support an uncertain environment.”To contact the reporters on this story: Carolynn Look in Frankfurt at email@example.com;Ruben Munsterman in Amsterdam at firstname.lastname@example.orgTo contact the editors responsible for this story: Paul Gordon at email@example.com, Brian SwintFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The drought in Thailand threatens to exacerbate a sharp slowdown in economic growth and intensify pressure on the central bank to loosen monetary policy.The dry conditions are the worst in a decade, and farming heartlands in the northeastern region are among the hardest hit, according to the Meteorological Department.“The main impact if drought intensifies or lasts longer is on the growth outlook, which is already weakening,” said Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore. “That would then require more coordinated easing from both fiscal and monetary policy.”The Bank of Thailand has so far resisted joining a global wave of policy easing as officials are concerned about elevated household debt. But expectations for interest-rate cuts are growing, with ING Groep NV predicting a quarter-point reduction to 1.50% as early as the Aug. 7 meeting.The trade-led economy was already slowing because of sliding exports amid the U.S.-China tariff war and a surging currency. The central bank expects 3.3% economic growth in 2019, which would be the weakest pace in four years.“The drought situation is severe,” Bank of Thailand Senior Director Don Nakornthab said Wednesday in Bangkok. “But rain has started, so we think the situation is still within our forecast.”The dry spell imperils crop production and rural demand in Southeast Asia’s second-largest economy, where approximately 11 million people are employed in the agricultural industry. Thailand is the globe’s top grower of rubber, and one of the largest exporters of sugar and rice.Nomura estimates the current conditions could shave 0.1 percentage point off the growth rate in April through December, rising to 0.2 percentage points if the situation becomes severe.What Bloomberg’s Economists SayThai growth of 2.8% year-on-year in the first quarter was probably the peak for 2019, given strengthening headwinds from the trade war and drought. At the same time, the baht remains supported by capital inflows. I suspect a cut by the U.S. Federal Reserve will trigger a similar move by the Bank of Thailand.\-- Tamara Henderson, Asean economistAlready, nearly half of major reservoirs are operating at less than 30% of capacity, Irrigation Department data shows. The government has resorted to steps such as cloud-seeding to trigger rain and is trucking water into some rural towns.The Thai administration has also held talks with China about water management along the shared Mekong river. China plans to release more water from its dams upstream to help alleviate the situation, its Foreign Minister Wang Yi said Wednesday.(Updates with Chinese foreign minister’s comment in last paragraph.)\--With assistance from Chloe Whiteaker.To contact the reporters on this story: Siraphob Thanthong-Knight in Bangkok at firstname.lastname@example.org;Suttinee Yuvejwattana in Bangkok at email@example.comTo contact the editors responsible for this story: Sunil Jagtiani at firstname.lastname@example.org, Nasreen SeriaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The pound slid to its lowest level in more than two years and gilts rallied as U.K. Prime Minister Boris Johnson stepped up preparations for a no-deal Brexit with just about three months left until the nation exits the European Union.Sterling fell against all of its Group-of-10 peers as various members of Johnson’s top team took a tough stance, with Chancellor Sajid Javid saying he was stepping up Treasury preparations for a no-deal departure and top aide Michael Gove writing in the Sunday Times that the government was now “working on the assumption” the talks with the EU would fail.“The pound is back on the defensive after a short-lived relief rally following the appointment of Boris Johnson as the new prime minister,” said Lee Hardman, a currency analyst at MUFG. “The promotion of hard Brexiteers to key cabinet positions is consistent with a government that will press hard to deliver Brexit at the end of October with or without a deal.”Sterling is the worst performer in the Group-of-10 currencies this month as investors brace themselves for the risk of both a no-deal Brexit and a general election. Morgan Stanley sees the pound falling to as low as parity with the dollar under a no-deal Brexit scenario.The new British premier has set up cabinet groups to prepare for a no-deal Brexit and is expected to speak to more European leaders over the coming days.Sterling slid 0.7% to $1.2292 in London, the lowest level since March 2017. It weakened 0.7% to 90.47 pence per euro. The yield on U.K. 10-year government bonds fell four basis points to 0.65%.(Adds context in 5th paragraph, updates prices.)To contact the reporter on this story: Charlotte Ryan in London at email@example.comTo contact the editors responsible for this story: Ven Ram at firstname.lastname@example.org, William ShawFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- A rapid deterioration in Singapore’s economic data has fueled speculation the central bank will ease monetary policy. The result may be higher interest rates and bond yields.Bets the Monetary Authority of Singapore will adjust policy have intensified after government reports over the past month showed the economy unexpectedly shrank 3.4% in the second quarter and exports slumped 17.3% in June. The trade-reliant economy has suffered amid escalating tensions between the U.S. and China.The data caused a jump in the three-month swap-offer rate, one of the nation’s benchmark interest rates that reflects the cost of borrowing in Singapore dollars. The gauge rose for four days after the GDP data even as borrowing costs in the rest of the world fell. The rate had previously surged in January 2015 when the MAS eased policy, and again in April 2016 when it stopped seeking currency appreciation.The counter-intuitive relationship between monetary policy and borrowing costs is due to how Singapore’s central bank seeks to guide the economy. Instead of using interest rates to adjust liquidity, MAS does so through adjusting the currency against an undisclosed basket.In the absence of central bank control, interest rates are typically dependent on those overseas, particularly in the U.S. They also move based on expectations for whether the local currency is expected to strengthen or weaken.“We are now looking for the MAS to ease policy in October” due to deteriorating growth and slowing inflation, said Irene Cheung, a senior Asia strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “Given easing in currency policy, Singapore rates will likely be supported even though lower U.S. rates will exert downward pressure.”Any weakness in inflation numbers due this week may add to easing bets. Core inflation probably slowed to 1.2% last month, which would be least since March 2017, according to a Bloomberg survey before the data is released Tuesday. The gauge has dropped from as high as 1.9% in December amid stuttering local growth and the U.S.-China trade war.Whereas most central banks review policy eight to 12 times a year, MAS only does so twice: in April and October. Given the rapidly worsening economic environment, ING Groep NV says local policy makers may feel compelled to make an unscheduled adjustment.“Talk of an off-cycle policy adjustment, before the next scheduled semi-annual review in October, has gained traction,” Prakash Sakpal, an economist at ING, wrote last week in a research note. “We continue to expect easing either this month or next.”Below are key Asian economic data and events due this week:To contact the reporter on this story: Masaki Kondo in Tokyo at email@example.comTo contact the editors responsible for this story: Tan Hwee Ann at firstname.lastname@example.org, Nicholas Reynolds, Nasreen SeriaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.At the heart of Chief Executive Officer Christian Sewing’s turnaround plan for Deutsche Bank AG is a contrarian bet: that he can cut spending on technology while gaining ground on the competition.Even with the digital revolution in finance accelerating, Deutsche Bank expects to trim its annual outlays on tech to 2.9 billion euros ($3.3 billion) in 2022 from a peak of 4.2 billion euros this year.“Deutsche Bank would probably love to be spending more on technology, but they need money for other parts of their restructuring,” said Pierre Drach, managing director of Independent Research in Frankfurt. “It’s pretty much impossible for European banks to catch up with the Americans at this stage.”Sewing’s team says it’s made progress in fixing information networks that his predecessor called “antiquated and inadequate.” Years of expansion left it with systems that couldn’t communicate with each other and didn’t adequately track its business. The bank, which has spent almost $18.5 billion on legal settlements and fines since 2008, has also suggested that the past breakdown in controls stemmed in part from weak systems.The 4.2 billion euros Deutsche Bank has budgeted this year to maintain and modernize its systems represents a fraction of the $11.5 billion JPMorgan Chase & Co. shells out. "You have to spend to win" with new technologies, Jamie Dimon, the bank’s CEO, said Tuesday.The gap is set to widen as the German chief executive wants to cut technology costs by almost a quarter. European banks, meanwhile, are forecast to increase tech spending at a 4.8% annual rate through 2022, according to the consulting firm Celent.“We continue to invest in IT to serve clients better, become safer, more efficient and better controlled,” Senthuran Shanmugasivam, a Deutsche Bank spokesman, said in response to questions from Bloomberg. “Despite our smaller footprint, our investment plans in 2019 are broadly unchanged as we reallocate resources to our core businesses.”It’s all part of a retrenchment Sewing announced last week to exit equities sales and trading and eliminate 18,000 jobs. Deutsche Bank aims to cut adjusted costs to 17 billion euros in 2022 from 22.8 billion euros last year; the share of technology expenses would remain stable over that time period.The company can modernize systems while spending less, for example by moving most of its applications to the cloud, according to Frank Kuhnke, who oversees its technology. He said Deutsche Bank has already cut the cost of crunching data by more than 30% since 2016 even as it increased computing capacity by about 12% a year to meet regulatory demands.Still, Deutsche Bank needs “to make a further step change in embracing technology,” Sewing told analysts last week.New HiresThe CEO has brought in new talent to do that. Bernd Leukert, who left the management board of software company SAP SE earlier this year, will start in September. Neal Pawar will join as chief information officer from AQR Capital Management the same month.Hiring outsiders hasn’t been a panacea in the past. Kim Hammonds, a former Boeing Co. executive, spent about four and a half years rebuilding the bank’s systems only to be ousted in 2018 after reportedly calling the bank “the most dysfunctional company” she’d ever worked for.Deutsche Bank expects its retrenchment from businesses to allow it to focus on its core operations. It will also save about 300 million euros by 2022 by shedding almost 5,000 external IT contractors and replacing them with internal staff at a lower cost. The integration of consumer lender Postbank will avoid duplication of expenses.The digital revolution is upending all aspects of finance -- from taking deposits to bond trading, a traditional Deutsche Bank strength. Citigroup Inc. has created a fintech division to invest in debt-market technologies while Spain’s Banco Bilbao Vizcaya Argentaria SA has created a unit to automate trade processes and generate intelligence from data. Dutch bank ING Groep NV has used artificial intelligence to win 20% more bond trades and cut costs.Cutting tech costs is also notoriously difficult.A three-year initiative announced in 2012 failed to stop technology spending from ballooning 44% by 2015. That was the year that then-CEO John Cryan said he would reduce the number of operating systems from 45 to four in 2020. Deutsche Bank still has 26, Sewing told investors in May. He kept the goal of eventually cutting them to four, but says the lender will need to run 10 to 15 systems for the foreseeable future.“Everyone knows that Deutsche Bank’s systems are a mess and I think they will have to end up spending more,” said Drach. “The fact that their new technology head hasn’t come on board yet gives them a good narrative for increasing the ultimate amount.”\--With assistance from Katie Linsell.To contact the reporter on this story: Nicholas Comfort in Frankfurt at email@example.comTo contact the editors responsible for this story: Dale Crofts at firstname.lastname@example.org, James Hertling, Giles TurnerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The market has been volatile in the last 6 months as the Federal Reserve continued its rate hikes and then abruptly reversed its stance and uncertainty looms over trade negotiations with China. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF […]
Rating Action: Moody's downgrades 18 Turkish banks; outlooks remain negative. Global Credit Research- 18 Jun 2019. London, 18 June 2019-- Moody's Investors Service has today downgraded 18 banks in Turkey....
Dutch lender ING Groep has decided against a tie-up with Germany's Commerzbank, German business daily Handelsblatt said in a pre-released report on Monday, citing financial sources. ING's management opted not to pursue the merger a month and a half ago, Handelsblatt reported, after Commerzbank chief executive Martin Zielke and ING boss Ralph Hamers met twice to discuss a potential deal.
Moody's Investors Service (Moody's) today affirmed the A2 deposit ratings of ING-DiBa AG (ING-DiBa), with a stable outlook. At the same time, the rating agency upgraded the bank's Counterparty Risk Assessment (CR Assessment) to Aa2(cr) from Aa3(cr) and the Counterparty Risk Ratings (CRRs) to Aa3 from A1.