Kaohoon Morning Brief – 7 November 2022

1) FSS sees economic outlook accelerates as tourism enters peak season and funds flow should return

Finansia Syrus Securities (FSS) expected the SET to move sideways down within 1,615-1,630 points as global investors continue to monitor the U.S. midterm elections and its inflation on Thursday. Today, China-related shares, such as mobile distributors, marine transport, steel, and upstream energy, would see pressure from the news that China maintained its zero-covid policy. However, FSS still believed that the SET’s loss would be less than its global equity markets. This week, the Thai equity market will focus on listed companies’ earnings results. Since the economic outlook accelerates due to consumption recovery and investment, and tourism enters its high season, funds should flow into Thailand in the medium run. Also, domestic and reopening plays should continue to outperform global stocks. In the short run, place selective bets on stocks with a solid 3Q22 earnings forecast.


2) Japan 3Q22 GDP is expected to slow down to 1.1% growth

Japan’s economy in the third quarter of 2022 is expected to grow 1.1% on a yearly basis, while representing a sharp plunge compared to a 3.5% growth in the second quarter. The decrease would be due to rising inflation and weak Japanese yen also pressured imported prices that forced consumers to limit their spendings, while global recessions could hurt external demand.

The data is expected to be released on November 15, 2022.


3) JPMorgan remains Neural on Thai stocks, but expects service sector to be main catalyst

JPMorgan reiterated its Neutral view on Thailand, saying that upbeat domestic demand and revitalization of the services sector remain the main catalysts for Thai equities in the near term and could be further supported by domestic institutions returning to buy stocks in November and December. The firm picked HMPRO, KBANK, PTTEP, BANPU, Thai Union, and CPALL as preferring stocks with idiosyncratic drivers and resilient earnings.


4) Covid cases in China hit 6-month high

The number of daily Covid cases in China has risen to its highest level in over six months as widespread outbreaks have occurred while health officials have vowed to maintain China’s stringent virus regulations.

The country reported 5,436 cases on Sunday, a 27% increase from the previous day and the highest since May 2, when Shanghai was under a months-long lockdown.