Market Roundup 14 September 2022

1) Thai stock market overview

Thailand’s SET Index closed at 1,656.58 points, decreased 4.51 points or 0.27% with a trading value of 72 billion baht. The analyst stated that the Thai stock market moved in the same direction as regional markets after the U.S. inflation data missed expectations in August/ The analyst stated that the SET Index is still performing better than the others as ASEAN’s economies are expected to continue growing in the next two years.


2) Analyst rates Thai commerce sector “Overweight” after minimum wage hike

KGI Securities (Thailand) keeps its Overweight rating on the commerce sector as it expects investor sentiment to improve in light of a minimum wage hike and an upward revision to tourist arrival outlook. KGI named CPALL as its Top Pick.

Though CPALL is expected to face the most negative impact from rising wages, it would also benefit from greater domestic purchasing power and the return of tourists. KGI maintains a rating of Outperform on CPALL with an end-2022 target price of THB74.00 based on PER 35.0x (+1.0 S.D. historical average between Siam Makro (MAKRO) and CPALL).

The re-opening of the country and return of tourists should benefit consumption in 2023 with better GDP growth, increase in tourist numbers, and employment. Under KGI’s best case scenario of 28 million tourist arrivals in 2023 (from current assumption at 25 million people), KGI expects spending of around THB31.5 billion to be injected into the system in 2023.


3) UK inflation unexpectedly drops to 9.9% in August, but still near 40-year high

Official data released on Wednesday showed that inflation in the United Kingdom declined unexpectedly in August as fuel prices plummeted, providing some relief to households and the Bank of England after the CPI rate reached a 40-year high.

The annual rate of inflation as measured by changes in consumer prices dropped to 9.9% in August from 10.1% in July, which was lower than the 10.2% increase forecast by economists in a Reuters poll.


4) Canada’s Trudeau offers C$4.5 billion inflation relief

Canadian Prime Minister Justin Trudeau unveiled on Tuesday a C$4.5 billion ($3.43 billion) package that included doubling the quarterly tax credit sent to low and modest individuals and households to offset sales tax, as well as a C$500 one-time top-up to a housing benefit offered to low-income people who require help with rent.

Although inflation eased slightly in July from its almost four-decade high of 8.1%, the Bank of Canada remains concerned about rising costs and has promised future interest rate hikes.