Kaohoon Morning Brief – 26 August 2022

1) FSS expects sideways-up movement for SET Index but limited ahead of Fed’s symposium

Finansia Syrus Securities (FSS) expected the SET’s sideways-up movement to continue after it recovered sharply yesterday. Since the index crossed 1,642 points, it opened an upside to test the next resistance at 1,650 points (+/-). However, today’s upside may not be sizable due to one crucial factor. It is the Fed chair’s speech at the Jackson Hole Symposium. In particular, investors would see how he crafts out his wording and if he reiterates continued tightening or not. Domestically, the market does not have additional pressure. It still benefits from the rising economic outlook. It breaks rank from other regions, which are slowing down and risk recession next year.

FSS maintained its mid-to-long-term view that domestic and reopening plays will outperform. FSS viewed that the minimum wage hike will benefit purchasing power, and operators should be able to manage and partially offset it via price hikes. FSS still recommended that its investors hold their bets placed earlier and accumulate more on weakness to 1,600 (+/-) since the securities company reaffirmed its bullish view of the SET outlook in 2H22-2023.


2) Second estimate shows slight improvement in US 2Q GDP to shrink 0.6%

Real gross domestic product (GDP) decreased at an annual rate of 0.6% in the second quarter of 2022, according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 1.6 percent, the Bureau of Economic Analysis of the United States of America stated.

The second estimate was lower than the advance estimate of 0.9% and slightly lower than the consensus of 0.8%.


3) FSSIA believes termination of investment in Bitkub will benefit SCB

FSSIA stated that SCB will not be penalized from the termination of investment in Bitkub, and the bank should have more liquidity for potential investments in the future. FSSIA stated that it think SCB will not pay any special dividend from the deal’s cancellation, one of the reasons for the overhang in its share price is the concern over the price of this deal. Therefore, FSSIA believed the cancellation should positively impact SCB’s share price.


4) US retaliates by cancelling 26 China-bound flights

The U.S. government said on Thursday that it will suspend 26 flights bound to China from the United States by four Chinese carriers, namely;  Xiamen, Air China, China Southern Airlines and China Eastern Airlines, in response to the Chinese government’s decision to suspend some U.S. carrier flights due to Covid-19 cases.