1) Thai stock market overview
Thailand’s SET Index closed at 1,600.06 points, decreased 32.56 points or 1.99% with a trading value of 73 billion baht. The analyst stated that the Thai stock market traded lower in the same movement as global markets in concerns of Fed’s rate hikes after the U.S. inflation in May reached 8.6%. The analyst advised investors to wait for the Fed’s actions in the meeting on 14-15 June.
2) Analyst warns traders to be wary of cannabis stocks
Asia Plus Securities cautions investors about investing in cannabis-hemp related stocks as they’ve already rallied and absorbed the hemp trend.
The warning came after share prices for cannabis and hemp firms have skyrocketed since legalization of cannabis took effect in Thailand on June 9, exceeding the market’s consensus.
The analyst urges investors to invest with caution in cannabis and hemp equities, as these businesses are just beginning. Some firms (e.g. RBF, DOD, RS, and SAPPE) are making headway in hemp-cannabis cultivation, extraction, and production despite having a profit base of less than THB500 million; these stocks may climb with the trend. Meanwhile, some businesses are experiencing losses (e.g. SPA, FN, BEAUTY, BC).
3) BoT confirms rate hike, but not in a hurry to do so
Thailand’s Central Bank chief suggests a possible key interest rate hike, but it will depend on the country’s circumstances and is unlikely to be in the same direction as other major global economies due to Thailand’s different conditions, with the demand side primarily responsible for the growth in inflation.
The Bank expects inflation to widen and peak in the third quarter of this year.
4) Japanese yen falls to 1998 lows amid rising US Treasury yields on hot inflation
The Japanese yen fell to the lowest level in 24 years against the dollar on Monday as the gap between Japanese and U.S. benchmark yields edged wider in response to surging U.S. inflation that prompted U.S. Treasury yields higher.
The greenback rose as much as 135.22 yen, its highest since October 1998, as the dollar had been gaining on the yen for the last six sessions, showing the difference between hawkish Fed and dovish Bank of Japan.
As central banks around the world are more or less moving toward interest rate hikes to curtail rising inflation, the market expected little to no change from the Bank of Japan as the consensus estimated the central bank to maintain the rate at -0.10%.