Market Roundup 9 December 2022

1) Thai stock market overview

Thailand’s SET Index closed at 1,623.13 points, increased 2.64 points or 0.16% with a trading value of 50 billion baht. The analyst stated that the Thai stock market edged higher in the same direction as Asian markets as investors eased concerns over Fed’s rate hike after seeing US jobless claims rose. Still, the analyst recommended investors to continue monitoring US inflation and Fed’s meeting next week, expecting SET Index to move in sideways trend with a support level at 1,610-1,615 points and a resistance level at 1,630-1,635.


2) IMF, World Bank sound alarm about global economic outlook

The International Monetary Fund, World Bank and others raised concerns about a worsening global outlook, while hopeful that China’s reopening will help support world growth.

IMF Managing Director Kristalina Georgieva said indicators show further downgrades to global growth are likely. Speaking Friday after a meeting with China’s Premier Li Keqiang in Anhui province, Georgieva said China’s recalibration of its Covid policies would be a good thing for the domestic economy and the rest of the world.

The IMF currently forecasts global growth will be 2.7% next year, slowing from 3.2% this year.


3) European central bank poised to hike rate by 50bps as bloc enters recession

A Reuters poll revealed that the European Central Bank is likely to raise its deposit rate by 50 basis points at its upcoming meeting on December 15 to 2.00%, despite the euro zone economy almost being in recession, in order to combat inflation running at five times its target.

The European Central Bank (ECB) has raised its benchmark deposit rate by 200 basis points since July, bringing it to 1.50%, as part of its ongoing battle to combat inflation.

According to a Reuters poll conducted between December 5 and 8, banks will earn 2.00% on deposits after officials meet on Thursday, the highest rate since 2009. The refinancing rate will rise 50 basis points to 2.50%.

It is also largely anticipated that the U.S. Federal Reserve would shift to a 50 basis point move at the conclusion of its policy meeting on Wednesday, the day before the ECB decision, following four consecutive 75 basis point rises.


4) Thai hotel sector to benefit from China’s further relaxation of Covid curbs, analyst says

KGI Securities maintains a “Overweight” rating on Thailand’s hotel sector, citing the positive outlook for tourism in 2023, and several indicators pointing to clearer signs of recovery in the number of Chinese tourists ahead, such as the continued relaxation of Covid-19 measures for international arrivals and the return of Chinese group tours. Meanwhile, the recent increase in daily Covid-19 infections in some nations should have little impact on global tourism sentiment.

KGI said in a note on Friday that the current top picks are The Erawan Group (SET: ERW) (TP: THB5.10) and S Hotels and Resorts (SET: SHR) (TP: Bt4.90).

KGI forecasts a 4 million increase in Chinese tourist arrivals in 2023 (returning to 36% of the pre-Covid level).  Meanwhile, the country’s tourist arrival projections for 2022/2023 remain unchanged at 11 million/25 million. The short-term forecast remains positive, with KGI projecting 5.4 million tourist arrivals in 4Q22, up from 3.6 million in 3Q22.