Kaohoon Morning Brief – 23 June 2022

1) KSS says market could rebound after entering an oversold territory

Krungsri Securities (KSS) expected the SET Index to move within the range of 1,550 – 1,570 points as the market lacked a positive catalyst to stimulate the investment. The main pressure comes from concerns of recession as global central banks could fasten the rate hike pace, resulting in an outflow from Thailand. The decline in crude oil prices should have a negative impact on the energy sector as well.

However, KSS expected to see buying power in some stocks that have unique catalysts, while the technical signal indicated an Oversold, which could buoy the market to rebound.


2) Powell is committed to bringing inflation down, admitted that recession could happen

The Federal Reserve Chairman Jerome Powell told the Congress on Wednesday that the Fed is committed to bring inflation down, showing confidence that the central bank could make it happen.

“At the Fed, we understand the hardship high inflation is causing. We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so,” said Powell to the congressional lawmakers. “We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”

Still, the Fed’s chair acknowledged that a recession could happen even though the U.S. economy is strong now in his view.


3) Sri Lanka economy has collapsed, president request funding aid to IMF

The Sri Lankan president sent an aid request to the International Monetary Fund (IMF), saying that the country has collapsed as they have no money left to buy fuel and an agreement with the UMF is the only way to turn that around.

The country has been on the brink of collapse for the past few months with shortages of food, fuel and electricity.


4) Oil prices extend losses as looming recession could hurt demand

Oil prices continued to decline in the morning session of Asian trading hours on Wednesday.

The international benchmark Brent crude fell 2.74% to $108.68 per barrel and the West Texas Intermediate dropped 3.06% to $102.94 per barrel.

The fall in oil prices came amid rising concerns of global central banks accelerating the rate hike pace to tame inflation in which an aggressive hike could trigger a recession and dent fuel demand.

The U.S. President Joe Biden also proposed a federal tax cut on fuel as well as demanding oil companies that are benefiting from higher refinery margins to cut the price down.