Kaohoon Morning Brief – 23 August 2022

1) FSS expects SET Index to test crucial support at 1,600 points amid international bearish sentiment

Finansia Syrus Securities (FSS) expected the SET to retreat in the short run to test its crucial support at 1,600 points (+/-) due to continued pressure from the international bearish sentiment. In particular, markets feared the Fed would signal a sharp rate hike in September at the Jackson Hole Symposium late this week. It triggered a sell-off in risk assets after the Dollar Index and bond yields extended their gains.

In Thailand, investors should keep a close watch on the Constitutional Court tomorrow to see if it will rule for the Prime Minister to step down due to his eight-year term or not. However, Thailand Focus 2022 during August 24-26 should provide modest support since it would enhance confidence in the economic outlook and the attractiveness of investment in Thailand.

FSS maintained its mid-to-long-term bullish view of domestic and reopening plays. However, investors might park cash in defensive plays in the short run. Strategically, FSS recommended that its investors wait to repurchase stocks on weakness after taking some short- term profit at 1,630 points (+/-). The securities company stated that it still believes that the SET will climb in 2H22-2023.


2) German power prices surge to record high above EUR700 amid fear over gas shortage

German power prices surged to above 700 euros a megawatt-hour for the first time on Monday amid concerns over Russia cutting gas supply ahead of this winter. The level is about 14 times the seasonal average over the past five years.

During the weekend, 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.


3) UK inflation is expected to surge above 18% next January, Citi says

U.K. inflation is expected to break 18% in January next year, according to an estimate by Citi economists. Meanwhile, the retail price index also got a revision to 21%. The estimate is based on the assumption of a £300 policy offset applied to household energy bills from October through to 2024 amid an upcoming increase in energy price cap.


4) Oil surges after OPEC says it would cut output

Oil prices edged higher on Tuesday after Saudi Arabia said that OPEC could cut output to correct a recent drop in oil futures.

International benchmark Brent crude rose 0.84% to $97.29 per barrel. The West Texas Intermediate (WTI) gained 0.83% to $91.11 a barrel.