Kaohoon Morning Brief – 8 November 2022

1) FSS advises investors to monitor US midterm elections while domestic and reopening plays to continue outperforming

Finansia Syrus Securities (FSS) expected the SET’s sideways movement to continue within 1,615-1,630 points as global investors monitor the U.S. midterm elections today. Most polls showed that Republicans would hold a majority in the lower house. It resulted in speculations in energy and pharmaceutical. Although China’s reopening remains highly uncertain, investors are hopeful that it will reopen eventually.

In general, the Thai equity market has bullish sentiment today. However, the market focus is still on the 3Q22 earnings season. In this regard, MTC, KCE, STA, STGT, NER, OR, and IRPC will deliver their earnings results today. In general, funds would extend their inflows into the Thai equity market in the medium term, in line with the economic recovery. Also, domestic and reopening plays would continue to outperform global stocks. In the short run, place selective bets on stocks with a solid 3Q22 earnings forecast.


2) Goldman Sachs says China reopening still months away

Goldman Sachs said China may still be months away from reopening as elderly vaccination rates remain low and case fatality rates appear high among those unvaccinated. The financial firm expected reopening in China to occur in the second quarter of 2023, and China stocks may jump 20% at reopening.


3) Deutsche Bank expects Republicans to take lower house while Democrats maintain slight edge in the Senate

Deutsche Bank said that the base case for the U.S. midterm elections is that Republicans will take the House but Democrats will maintain their slightly-above the edge majority in the Senate, although the Dem also admit that this could be a close call.

Citing data from PredictIt, Goldman Sachs noted that the odds of a full sweep for the Red tide have now risen to 71%, more than double from their early September lows.