Market Roundup 28 October 2022

1) Thai stock market overview

Thailand’s SET Index closed at 1,606.07 points, increased 3.74 points or 0.23% with a target price at 55 billion baht. The analyst stated that the Thai stock market had a positive outlook after being able to close above the 1,600 level, while having a limited downside as the analyst did not give much weight on the US PCE as the market already priced in a 75bps rate hike.


2) Finance Ministry lowers Thai economic growth to 3.4% on inflationary pressure

The finance official trimmed Thailand’s GDP forecast to 3.4% this year and 3.8% next year, citing weaker investment in key industries, particularly construction, as inflation drove up materials and costs.

Export growth is expected to accelerate to 8.1% this year before falling to 2.5% in 2023, said the Finance Ministry.

The ministry has also raised its prediction for international arrivals in 2022 to 10.3 million, expecting them to generate over THB490 billion in income thanks to the sector’s continued recovery. The number of foreign visitors is expected to reach 21.5 million in 2023, as Chinese tourists return.

Inflation is expected to hit 6.2% this year before falling to 2.9% the following year.


3) BOJ keeps rate unchanged despite yen at 32-year low

The Bank of Japan maintained its dovish stance by keeping interest rates unchanged in its policy meeting on Friday despite hawkish moves by central banks around the world.

As widely expected by analysts and economists, the Japanese central bank in a unanimous vote, kept its interest rates at -0.1%, and 0% for the 10-year government bond yield. The committee also said that it would purchase necessary amounts of government bonds  at a fixed rate to keep its 10-year bond yields at 0%.

The announcement was delivered on Friday despite the Japanese currency hovering at 32-year lows amid pressure from central banks around the world that raised interest rates in an attempt to curb high inflation.

In the meantime, the central bank published its revised forecast for inflation, expecting the core consumer price to hit 2.9% in the current fiscal year ending in March 2023 and 1.6% the fiscal year of 2024.


4) IMF cuts Asia’s growth projection on slowdown in China

The IMF lowered its forecast for Asia’s economic outlook on Friday due to the negative effects of global monetary tightening, rising prices blamed on the Ukraine conflict, and China’s sharp slowdown damaged the region’s recovery hopes.

According to the International Monetary Fund’s Asia-Pacific regional economic outlook report, the Fund suggested most central banks must keep hiking interest rates to maintain inflation expectations stable, despite inflation in Asia remains subdued compared with other regions.

The IMF cut Asia’s growth estimate to 4.0% this year and 4.3% next year, down 0.9% and 0.8% from April.

China’s rapid and broad-based economic slowdown, blamed on harsh COVID-19 lockdowns, and its deepening property troubles are among the most significant headwinds, according to the IMF.