Kaohoon Morning Brief – 26 September 2022

1) FSS expects high season of tourism in 4Q22 to reduce pressure on weak Thai baht

Finansia Syrus Securities (FSS) stated that it expected the SET Index to move sideways down to its support 1,620 +/- as investors pull back from risk assets. Fears of high inflation and increasing interest rates trend put global economic outlook worsens into next year especially in the US and Europe. China’s economic growth slowdown may have triggered a stagnation of Thailand’s exports.

However, FSS still believed that the Thai stock bourse has limited downside as compared to other equity markets owing to its rising economic outlook in 2H22-2023, in line with the high season of tourism in 4Q22 reducing pressure on the weak baht. Domestic and reopening plays should outperform the market. Also, the MPC’s potential rate hikes at the last two meetings this year should support banks to perform well at this time. If the SET decreases to 1,600-1,610 points (+/-), it will provide an opportunity for additional accumulation.


2) British pound falls to 1985 lows as investors speculate on BoE to response

The British pound hit a record low on Monday as investors digested the U.K. government’s plan for tax cuts to support its citizens during the energy crisis, but could stretch government finances to the limit.

Sterling dropped nearly 5% during the trading session on Monday to $1.0327, falling below 1985 lows, and the market is now speculating for a prompt response by the Bank of England to cushion the fall.


3) Russia to annex occupied territories on September 30

Russia may deliver an address to the Federal Assembly to announce an annex on the occupied Donetsk, Luhansk, Kherson and Zaporizhzhia on September 30, according to the state media agencies TASS and RIA Novost.

According to the report from The Telegraph, Russian forces are knocking door-to-door to collect referendum votes that were reported for being illegal referendums due to the threats by Russia.


4) Italy is on course to have first female prime minister

Far-right leader Giorgia Meloni’s Fratelli d’Italia is on course to becoming Italy’s first female prime minister and the first government since the end of World War 2 to be led by the far-right group.

She is pointed to acquire 26.4% of the vote to form a coalition party with Lega, under Matteo Salvini, Silvio Berlusconi’s Forza Italia and a more minor coalition partner, Noi Moderati.