Kaohoon Morning Brief – 18 October 2022

1) FSS expects SET Index to edge higher from bullish sentiment overseas even without catalyst

Finansia Syrus Securities (FSS) expected the SET Index to see short-term recoveries to test 1,580-1,585 points, in line with the bullish sentiment from abroad. Although the market still lacks fresh catalysts to provide support, it bounced back after plummeting in the past month. In the latest news, China delayed the release of its 3Q22 GPD. It triggered market concern for a weak growth rate.

At the moment, the spotlight is on the 3Q22 earnings season. In Thailand, banks will start this week, followed by the real sector’s earnings preview. Although they are generally unexciting since the rainy season is a low season, FSS maintained its bullish view of domestic and reopening plays in 4Q22 when tourism and spending resume their high season. Also, the economy should accelerate in 2023. It would diverge from the West, which risks a recession.


2) Goldman sees deeper recession for UK economy in 2023

Goldman Sachs revised UK GDP forecast for 2023 to a 1% contraction from an earlier forecast for a 0.4% drop, seeing a deeper UK recession after a u-turn on tax cuts of Truss’ government.

The firm saw core inflation at 3.1% at the end of 2023, down from 3.3% previously.

The Truss government stated that it will go ahead with corporation tax rising to 25% in 2023, a significant turnaround from a pledge to freeze it at 19%.


3) Bank of America reported higher-than-expected 3Q22 earnings from higher interest rate

The Bank of America reported higher-than-expected 3Q22 earnings with an EPS of $0.81vs $0.78 expected. Meanwhile, revenue for the quarter was $24.50 billion vs $23.54 billion as net interest income increased $2.7 billion or 24% to $13.8 billion, driven by benefits from higher interest rates, including lower premium amortization expense and solid loan growth.

The share price of Bank of America Corp rose 6.06% to close at $33.62 per share.