Kaohoon Morning Brief – 24 August 2022

1) FSS expects diverged fund inflow from other regions to support Thai market

Finansia Syrus Securities (FSS) expected the SET to move sideways-to-sideways up within 1,625-1,645 points after a strong recovery yesterday, even though there was no fresh catalyst. Also, markets waited for the Fed chair’s statement at the Jackson Hole Symposium to see if he would signal continued rate hikes and tightening to bring down inflation to its target or not. In Thailand, investors should keep a close eye on the Constitutional Court to see its stance on the prime minister’s eight-year term.

Today, Thailand Focus 2022 will kick off, which would benefit confidence. FSS believed crucial support is still from international fund inflows, in line with the rising economic outlook in Thailand. It diverges from other regions, which slows down and risks recession.

FSS maintained its mid-to-long-term bullish view of domestic and reopening plays and recommended that its investors repurchase them on weakness to 1,600 points (+/-). Also, the securities company reaffirmed its stance that the SET will climb in 2H22-2023.


2) Thai central bank expects inflation to remain high throughout 2022

Thailand’s Monetary Policy Committee raised its key interest rate earlier this month and noted that gradual rate hikes were consistent with the country’s growth and inflation, according to minutes of the meeting on Wednesday.

The committee stated that monetary policy normalization should be done in a gradual and measured manner in the period ahead, while expecting headline inflation to remain high throughout 2022.


3) JP Morgan picks consumer and energy sectors  for the investment in Thai equity

JP Morgan stated that it preferred consumer and energy sectors for the investment in Thai equity , believing that tourism and exports have been the two main drivers of the Thailand economy, pointing out that consensus currently estimates Thailand EPS growth of 21.9% and 11.3% in FY22-23 versus 8.7% and 9.1% for MSCI Asia ex Japan.

JP Morgan chose HMPRO, KBANK, PTTEP, BANPU and CPALL as its top picks.


4) Oil slips on Wednesday as fears of OPEC+ cutting output subside

Oil prices fell in the morning session of Asian trading hours on Wednesday after fears of OPEC+ cutting output subsided.

On August 24, the international benchmark Brent crude dropped 0.42% to $99.80 per barrel, while the West Texas Intermediate (WTI) fell 0.30% to $93.46 per barrel.

Earlier this week, oil prices made some gains as Saudi Arabia said that OPEC could cut output to correct a recent drop in oil futures, resulting in a surge in the benchmark for oil prices to return to above $100 level per barrel.