Kaohoon Morning Brief – 27 September 2022

1) FSS expects SET Index to move sideways down amid strong US yields and dollar

Finansia Syrus Securities (FSS) expected the SET to move sideways down to its crucial support at 1,600-1,610 points, pressured by the bearish investment sentiment from risk-asset sell-offs. It came after the U.S. bond yields and the Dollar Index extended their gains due to the continued interest rate uptrend. Also, the economy slows and risks recession, particularly in the U.S. and Europe. Also, China’s economy started to see a slowdown. They caused the sharp crude price falls to continue and pressured the energy and commodity sector, which should help ease the inflation and manufacturing cost outlook, in its view. Although exports may see some impacts, the weak baht will help support them. FSS expected the MPC to hike its policy rate at tomorrow’s meeting, in line with economic recovery.

FSS stated that it still thinks domestic and reopening plays would outperform the market. If the SET decreases to its crucial support, FSS views it as an opportunity to accumulate mid-to-long-term bets.


2) Thai baht hits 16-year low at THB37.98 ahead of BOT rate hikes

Strong US dollar pushed Thai baht to as much as THB37.98, marking its 16-year peak in USD-THB terms, but losing steam to THB37.90 level.

The resistance at THB38.00 may not be tested as the Bank of Thailand is close to hiking its interest rate in the meeting scheduled to be held this Wednesday. However, economists expected a small hike of 25 basis points would do little to no help cushioning Thai baht.

Earlier, the finance minister said that the Bank of Thailand was closely monitoring the baht weakness, while asserting that there were no significant concerns about the fall despite hitting 16-year low for Thai baht against the greenback that continued to rally on the back of the US Federal Reserve rate hikes.


3) World Bank slashes East Asia economic growth to 3.2%

The World Bank cuts 2022 economic growth of East Asia and Pacific region, including China, to 3.2%, a sharp decline from its 5.0% forecast in April and also compared to the previous year’s growth of 7.2%.

The main factor of slower economic growth is a slowdown in China from lockdown and zero-Covid policy.

However, the region is expected to pick up next year.


4) Apple to assemble iPhone 14 in India

Apple said that it is assembling its brand new iPhone 14 in India as the company is seen trying to shift away some production from China.

Its main iPhone assembler, Taiwan’s Foxconn, is manufacturing the devices at its Sriperumbudur factory in Chennai, India.

India has been Apple’s iPhone manufacturer since 2017, but for older models.