Market Roundup 20 December 2022

1) Thai stock market overview

Thailand’s SET Index closed at 1,604.44 points, decreased 13.76 points or 0.85% with a trading value of 58 billion baht. The analyst stated that the Thai stock market plunged sharply, following the movement in regional and international markets, pressured by BOJ’s policy in expanding the yield curve. Meanwhile, the government’s newly stimulus plan did not buoy the stock market as much. The analyst expected support level for SET Index tomorrow at 1,590-1,595 points and a resistance level at 1,610-1,615 points.


2) BOJ widens yield target range while holding rates unchanged

The Bank of Japan on Tuesday left its policy rate unchanged and said it will adjust its yield curve control band.

The BOJ surprisingly stated that it will flexibilizes yield curve control (YCC) of 10-year Japan government bonds unchanged at “around zero”, but widen the range around the band from its present plus and minus 0.25 percentage points to plus and minus 0.5 percentage points.

The adjustment is made in order to “improve market functioning and encourage a smoother formation of the entire yield curve, while maintaining accommodative financial conditions,” the BOJ said.

The Japanese yen surged up to 3% to stand at 134.33 against the U.S. dollar shortly after the announcement. Meanwhile, the Nikkei 225 Futures fell more than 4%, after closing its morning session 0.29% higher.


3) World Bank cut China’s growth outlook, citing pandemic and property sector crisis

The World Bank cut its growth forecast for China this year to 2.7% as the pandemic and property sector crisis hit the world’s second-largest economy.

The institute had estimated in June that the Chinese economy would increase by 4.3% this year. It also reduced its growth outlook for next year from 8.1% to 4.3%.

Both figures are far below Beijing’s official GDP growth projection for this year of approximately 5.5%, which many analysts believe is already out of reach.


4) Thai Cabinet approves tax-refund package to boost economy in 2023

The Thai Cabinet on Tuesday approved another stimulus package to boost the kingdom’s economy in 2023 as tourism is expected to continue to recover.

The scheme known as “Shop Dee Mee Kuen” will allow consumers spending on products and services in Thailand to be eligible for tax deduction up to THB 40,000 per person.

The Ministry of Finance estimated that the scheme, which will run from 1 Jan – 15 Feb 2023, will generate more than THB 56,000 million of cash flow in the country, while the Revenue Department would lose THB 8,200 million of tax collection. The scheme is expected to drive Thai gross domestic product in 2023 by 0.1-0.2%.

Products and services that were excluded from the scheme are liquor, tobacco, vehicle, boat, hotel reservation, travelling guide fees, utility fee, insurance etc.