Kaohoon Morning Brief – 29 November 2022

1) FSS expects SET Index to move sideways-down in lack of catalyst as external factors still bearish

Finansia Syrus Securities (FSS) expected the SET to extend its sideways-to-sideways-down movement. In this regard, it has crucial short-term support at 1,610 points. The market still lacks fresh catalysts to provide support. Also, the covid situation in China, i.e., the outbreak, the lockdown, and the protests against the lockdown, pressure the index. The Dollar Index increased after several Fed officials reiterated the rising policy rate outlook. In particular, they guided that it could peak in 1Q23. Energy should recover after crude prices started rebounding after the news that OPEC+ might cut their output at a meeting on December 4, 2022. Generally, external factors remain bearish. Also, a recession risk persists for next year. It reflected in Thailand’s exports for October, which began to contract. It reiterated that the domestic recovery remains robust. It would support the SET to outperform other regions.

Tomorrow, investors should monitor the MPC meeting. The market expects it to raise its policy rate by another 0.25% to 1.25%. Also, the Charter Court will rule on party-list seats based on the organic law on political parties. FSS maintained its long-term bullish view of the economy and mid-to-long-term  fund flows, which should stream into the country.


2) Crypto lender BlockFi files for bankruptcy

Cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection on Monday, marking the latest victim to the collapse of FTX exchange earlier this month.

BlockFi said in a bankruptcy filing to New Jersey court that its substantial exposure to FTX created a liquidity crisis via loans to Alameda, as well as cryptocurrencies held on FTX’s platform that became trapped due to FTX’s filings for bankruptcy, causing its assets to freeze.


3) NY Fed expects interest rates to remain high until 2024

New York Federal Reserve President John Williams said on Monday that he expected inflation to fall to low 5s this year and the low 3% zone in 2023. Still, he added the U.S. central bank needs to press forward with rate rises, and the cut should be in 2024 as inflation pressures likely ease.


4) Deutsche Bank expects bear market rally to continue into 2023 before falling back

Deutsche Bank said that the equity bear market rally will continue into 2023 before slumping as a recession in the world economy takes hold. The financial firm expected S&P 500 to rally to 4,500 in the first half of next year before starting to retreat.

Deutsche Bank said that recession was likely to take hold from mid 2023 and would also be felt in credit markets where U.S. high yield spreads should widen to 860 basis points by end-2023.