Daily Strategy: FSSIA Says Thai Stock Market Remains Solid amid Recovering State

Major stock markets in Asia traded lower on Thursday following a sharp decline in Wall Street last night as investors showed concerns on potential impact from inflation after Walmart and Target 1Q22 earnings.


Dow Jones closed 1,164.52 points lower or 3.57% at 31,490.07 points, while S&P 500 fell 4.04% and Nasdaq plunged 4.73%. Meanwhile, the CBOE Volatility Index (VIX Index) jumped 18.62%.


Walmart and Target reported their first quarter results this week where both companies had lower-than-expected EPS despite higher revenue growth than forecast.

Both companies had a partially common statement, saying that they are seeing a shift in consumer behaviour, moving toward essential goods versus discretionary merchandise. Meanwhile, both were seeing higher costs to execute their businesses. 

Meanwhile, China’s economy is expecting to grow slower-than-expected as Goldman Sachs cut its forecast for China’s economic growth in 2022 from 4.5% to 4% after the government’s data for April showed a decline in growth as Beijing’s zero-Covid policy has restricted business activities, especially due to the lockdown in major cities such as Shanghai.


Mr. Songklod Wongchai, Executive Vice President of FSS International Investment Advisory Securities Co., Ltd. (FSSIA), through “Kaohoon Jor Talad Program” on May 19, 2022, stated that the Thai market should be volatile in the short term, believing it is too early to expect a recession after some corporates saw impact from inflation. 

Mr. Wongchai stated that the U.S. market was on down trends even before yesterday’s decline, while the Thai stock market is stronger than the U.S. as the market is recovering from Covid-19 and there are no more lockdowns amid the omicron outbreak. He added that the market always rebounded after falling below the 1,600 level and foreign investors still showed interest in Thai stocks.

In addition, Mr. Wongchai affirmed that the Thai stock market is strong and advised investors and should accumulate stocks when the market edges lower, recommending stocks with solid fundamentals.