Kaohoon Morning Brief – 22 August 2022

1) FSS expects SET Index to pull back over dull sentiment ahead of Fed’s Symposium

Finansia Syrus Securities (FSS) expected the SET to retreat in the short run to move within 1,610-1,630 points due to the dull sentiment from abroad. In particular, the market is looking forward to the Jackson Hole Symposium on August 25-27 to see if the FOMC will reiterate its stance on aggressive rate increases to fight inflation or not. As a result, funds flowed out of risk assets, while the Dollar Index increased quickly.

In Thailand, market players are monitoring a crucial issue over the Prime Minister’s eight-year term on August 24 this week. Also, Thailand Focus 2022 will begin on August 24-26, which could help enhance confidence in the economic outlook and interest in investment in Thailand.

FSS stated that it still believes domestic and reopening plays that lag behind the market will outperform the market at this time since they benefit from the rising profit outlook, in line with the economy. Strategically, FSS recommended its investors wait to repurchase stocks on weakness after making a short-term profit at 1,630 (+/-) since FSS believed the SET will climb in 2H22-2023.


2) Russian Gazprom to shutdown Nord Stream 1 on unscheduled maintenance

Russian state-owned energy company Gazprom stated that it will shut down Nord Stream 1 pipeline, a key pipeline conveying natural gas to Europe, in an unscheduled maintenance for three days on August 31 – 2 September.

The shutdown will deepen an energy standoff between the Kremlin and European countries that could send the current 40-year high inflation even higher.

The flow through Nord Stream 1 pipeline is currently at 20% of its max capacity, and Gazprom stated that the output will remain as it is after the maintenance.


3) New Zealand’s central bank is open for 75bps hike to lower core inflation

Reserve Bank of New Zealand Deputy Governor Christian Hawkesby stated on Monday that policymakers want policy rates to be comfortably above neutral to help ease pressure on core inflation, as reported by Reuters in a phone interview.

Hawkesby said that the central bank last week was considering a 25 or 75 basis point increase before ending up raising rates by 50bps.

He said that policymakers are open for a larger more than 50 bps if the committee thought that market pricing was wrong.

if the committee thought that market pricing was wrong and they needed to shift it they would consider a larger move than 50 bps.

The cash rate in New Zealand is now at 3.0%, a level not seen since September 2015, and the forecast expects the rate to be at 4.0% by early next year.