Kaohoon Morning Brief – 10 August 2022

1) FSS expects fund inflow to continue as investors monitor MPC meeting

Finansia Syrus Securities (FSS) expected the SET to move sideways-to-sideways up within 1,610-1,630 points, supported by continued international fund inflows. Today, there is one crucial factor, i.e., the MPC meeting. FSS stated that the market expected its first rate hike of 0.25%, in line with economic recovery and pressure from the higher-than-expected inflation. The increase should support banks. Also, the U.S. will release its inflation for July tonight. The market anticipates a Y-Y growth, implying it has peaked in June. If it does not miss the estimate, the easing sentiment should continue.

Meanwhile, the 2Q22 earnings season is about to end. So far, most reported in-line or below-estimate earnings results. They are in tandem with FSS’ view of a slight downward revision in 2H22.

Strategically, FSS still focused on stocks with a robust 2Q22 profit forecast and a consistently healthy outlook in 2H22. Also, FSS liked value and domestic plays that benefited from the domestic economic recovery. However, the SET’s swift and continued rallies to above 1,600+ narrow its upside compared to the target of 1,670 points. Hence, FSS recommended short-term profit-taking, particularly when international fund flows slow or when foreign investors go short to close their sizable long position on the Index Futures.


2) China consumer price rises 2.7% in July, while producer price edges 4.2% higher

China’s consumer price index (CPI) rose by 2.7% in July from the same period last year, up from a 2.5% increase in June. The figure in July was its highest in two years, but still below expectations of 2.9% increase.

Food prices rose by 6.3% in July from a year earlier, compared to 2.9% in June, driven by rising pork and vegetable prices.

Meanwhile, the producer price index (PPI), an indicator for prices that factories charge wholesalers for products, rose by 4.2% in July year on year, down from 6.1% growth in June.


3) Elon Musk sold another 7.92 million shares of Tesla

Tesla CEO Elon Musk sold his 7.92 million shares of Tesla worth around $6.88 billion on multiple transactions between 5-9 August, according to the filing.

The CEO said earlier this year that he had no further plan to sell Tesla shares after a series of disposals at that time.