Kaohoon Morning Brief – 30 September 2022

1) FSS expects Thai domestic and reopening plays to outperform peers

The SET should move sideways-to-sideways down within 1,580-1,600 points. In general, the market still lacks catalysts. It remains anxious about the global economic slowdown that risks a recession amid the high inflation and interest rates. On the domestic front, investors should monitor the Charter Court’s ruling on the Prime Minister’s term in office in the afternoon. On this matter, FSS expected the market to have a neutral or bullish response, depending on the verdict. FSS thought the SET is still in retreat to build its base. At the same time, investors are adjusting their portfolios to reflect the tighter global interest rate outlook next year. However, FSS viewed the Thai equity market would outperform its peers in other regions due to the accelerating economy. In this regard, domestic and reopening plays should outperform their peers. They include banks, tourism, commerce, and food. At this point, the SET remains in the recommended range for accumulation at 1,580-1,600 points (+/-). Also, FSS suggested its investors hold their mid-to-long-term investments, waiting for a recovery in 2023.


2) Chinese PMI beat expectations in September

China’s official manufacturing Purchasing Managers’ Index beat expectations by rising to 50.1 in September at a much higher figure than a reading of 49.6 forecast by analysts in a Reuters poll.

The Caixin Purchasing Managers’ Index showed a contraction of 48.1 for factory activity.

Meanwhile, the official non-manufacturing PMI was at 50.6 in September, down from 52.6 in the previous month.


3) US jobless claims fall to five-month low

Numbers of Americans filing for unemployment benefits last week fell to the lowest level in five months as the labour market is strengthening despite the US Federal Reserve trying to slow it down.

Jobless claims fell by 16,000 to 193,000 for the week ended September 24, the lowest level since April 23.


4) US mortgage rises to 15-year high

US mortgage rates reached 15-year high with an average rate on a 30-year fixed mortgage rose to 6.7%, putting more pressure on the U.S. housing market that already gone cold.

This week’s rate was up from the level of 6.29% from the previous week, while it was 3.01% a year ago.

Pending home sales were already at the lowest since 2011