Kaohoon Morning Brief – 7 September 2022

1) FSS expects SET Index to outperform regional peers, especially in 4Q22 on tourism revival

Finansia Syrus Securities (FSS) expected the SET INdex to move sideways within 1,625-1,640 points. It would slow after yesterday’s strong rallies, pressured by U.S. bond yields and the Dollar Index. They extended their gains due to concerns that the Fed would raise its policy rate by another 0.75% at the meeting this month. In this regard, the market increases the probability to 75%. Similarly, it viewed that the ECB would hike its benchmark rate by another 0.5% at tomorrow’s meeting amid the economic slowdown and high energy price crisis. They would cap risk assets’ rallies, particularly global, tech, and growth shares.

However, FSS maintained that the SET Index would outperform other regions, in line with its rising economic outlook. In particular, it would perform well in 4Q22 due to tourism. Hence, FSS still recommended investments in domestic and reopening plays with historically lower valuations than their pre-covid level. If the SET decreases to 1,600 points (+/-), it will provide an opportunity for stock repurchases.


2) US Aug S&P Global Services PMI adjusted downward to 43.7

The S&P Global US Services PMI was revised lower to 43.7 in August from a preliminary reading of 44.1, falling further from 47.3 in July. The reading is now pointing to the sharpest contraction in the US services sector since May 2020.

Output was seen sharply lower in August amid weaker domestic and foreign demand than the previous month. Meanwhile, new orders fell at the sharpest rate in over two years.


3) Liz Truss to immediately tackle the problem as British prime minister

Liz Truss officially took over as British prime minister on Tuesday and vowed to immediately solve the currently unsettled situation involving soaring energy bills, potential recession and industrial strife, which would be one of the most challenging tasks for a leader in post-War history.

Top three priorities of Truss are tax cuts to boost the economy, support on rising energy costs, and sorting out the state-run National Health Service.


4) Apple to appeal Brazilian order to ban new iPhones without chargers

Apple Inc will appeal an order to ban new iPhones without a charger by the Brazilian government.

Apple noted that the reason for not including chargers is to reduce carbon emission, but Brazilian authorities rejected the claim, saying that there is no evidence that it will offer environmental protections.

The Justice Ministry had fined Apple about $2.38 million and ordered the company to cancel sales of the iPhone 12 and newer models that come without chargers.

Brazilian authorities said that this is “deliberate discriminatory practice against consumers.”