Market Roundup 19 December 2022

1) Thai stock market overview

Thailand’s SET Index closed at 1,618.20 points, decreased 0.81 points or 0.05% with a trading value of 44 billion baht. The analyst stated that the Thai stock market moved narrowly as investors speculated on retail stocks in anticipation of the new stimulus plans to be discussed among the Thai cabinet tomorrow. However, a selloff in energy stocks, caused by concerns of demand in China, pressured the Thai stock market.


2) Thai central bank sees limited impact of global financial tightening on Thailand’s recovery

The Bank of Thailand (BOT) said on Monday that despite global financial tightening, the country’s economy should continue to recover and the overall financial stability remains solid.The central bank stated that it is prepared to alter the pace of rate hikes if the outlook shifts, but that a gradual rate hike is still aligned with Thailand’s recovery and inflation outlook.The rebound in private consumption and the key tourist sector will continue to underpin South-east Asia’s second-largest economy, according to the central bank in a statement issued for an analysts’ meeting.The recovery and inflation forecast have been in line with expectations, and long-term inflation expectations have remained stable, according to the report.BOT predicts Thailand’s economic growth would accelerate to 3.2% in 2022 and 3.7% in 2023.With the vital tourism sector only beginning to pick up this year, Thailand’s economic recovery has lagged that of other South-east Asian countries, and the tightening cycle has been less aggressive than in many regional peers.


3) South Korea warns economic downturn could last longer than expected

South Korea on Monday warned of a more severe economic slowdown than expected, lasting at least through the first half of next year, and extended sales tax cuts on some fuel oil goods and passenger cars for a few more months.

As the country with the fourth-largest economy in Asia, South Korea depends largely on exports of goods including cars, ships, electronics, and smartphones. Growth is forecast to drop to below 2% in 2022 from near 3% this year.

After a scheduled revision last month, the central bank lowered its forecast for economic growth in 2023 to 1.7% from 2.1%, citing a projected decline in corporate investment due to falling exports.

Since the economy should now rely more on domestic consumption to counter slowing export demand, the finance ministry has extended tax incentives on fuel oil products and passenger car sales by up to six months beyond their initial end-of-2022 expiration date.


4) EU putting forward a last-ditch effort to reach deal on gas price cap

Energy ministers from EU member states are gathering in Brussels on Monday to attempt to reach agreement on capping gas prices, an emergency step that has divided sentiment inside the bloc as it seeks to calm the energy crisis.

Last week, national leaders encouraged their ministers to endorse the cap on Monday to conclude a policy that had been deliberated for months without agreement despite two emergency sessions.

According to the draft seen by Reuters, a cap would be triggered if the front-month contract at the Dutch Title Transfer Facility (TTF) gas hub exceeded 188 euros per megawatt hour for three days. This is far lower than the 275 eur/MWh proposed by the European Commission last month.

To combat the high gas prices that have increased people’ energy costs and fueled record-high inflation this year after Russia cut off most of its gas exports to Europe, countries like Belgium, Poland, and Greece have demanded a cap below 200 eur/MWh.

But countries such as Germany, the Netherlands, and Austria are concerned that the cap could cause chaos in Europe’s energy markets and lead the EU to lose access to crucial gas shipments. They have pushed for stricter criteria, such as an automatic halt to the cap if it has unintended negative effects.