Kaohoon Morning Brief – 30 November 2022

1) FSS advises to monitor MPC raising rates, while oil prices continue to recover

Finansia Syrus Securities (FSS) expected the SET Index to move sideways-to-sideways-up to test its resistance at 1,630-1,635 points due to the easing covid situation in China. Also, Beijing plans to boost covid vaccination for the elderly as it finds its reopening path. The Dollar Index extended its losses while Asian currencies increased. It supports the region’s fund inflow outlook. Crude prices continued recovering after the market viewed that OPEC+ would maintain its daily output cut of 2mn barrels from November onwards at a meeting on December 4, 2022.

On the local front, investors should monitor if the MPC raises its policy rate by another 0.25%, in line with the economic recovery. Also, the Charter Court will rule if the organic law on the election of MPs is constitutional. If yes, it will serve as a catalyst for domestic plays and the SET Index. FSS maintained its mid-to-long-term bullish view of the economy and the fund inflow outlook.


2) China’s factory activity data misses expectations as Covid weighs on economy

China’s official manufacturing Purchasing Managers’ Index for November came out lower than expected and also in a negative territory at 48, below Reuters poll for 49 and 49.2 in October. This is also below the 50-point mark that separates growth from contraction.

China is struggling with rising Covid-19 cases in recent weeks, seeing multiple stringent measures by the authorities that sparked unrest in the communities leading to protests in many cities.


3) JPMorgan sees more pain in UK next year

European gas prices rose to a new high in more than a month with unusually cold weather expected to start eroding gas inventories.

JPMorgan warns of more pain for the UK while seeing GDP to decline in 2023 amid rising interest rates and soaring gas prices.

The firm sees the UK’s GDP increasing 4.3% this year, but falling 0.6% in 2023. Meanwhile, interest rates were expected to rise to 4.25% by 1Q23.