Market Roundup 27 February 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,627.35 points, decreased 6.67 points or 0.41% with a trading value of 54 billion baht. The analyst stated that the Thai stock market continued to decline due to the pressure from the U.S. market expecting that the Fed could go with a 50bps rate hike in March, resulting in outflow from the Thai market. Meanwhile, the greenback rose against Thai baht, reflecting a negative outlook to the market.

The analyst expected SET Index to bounce back slightly within the range of 1,640 – 1,625 points.


2) Equities perform best over the long run, Credit Suisse’s yearbook data shows

Historic data has shown that investing in equities gives higher returns over bonds and bills, according to the Credit Suisse Research Institute’s Global Investment Returns Yearbook 2023.

By the end 2022, average inflation across the Yearbook countries was 8.0%, 19 times higher than at the end 2020. There were signs that inflation had peaked by the end of 2022. However, the Yearbook reports that historically, once inflation goes above 8%, it can take multiple years to revert to target.

Meanwhile, Individual physical/spot commodities have provided low long-run returns since 1900 with an average annualized return of −0.5%. 72% of the commodities examined failed to beat inflation. However, an equally-weighted portfolio of the same spot commodities gave a much higher annualized return of 2.0%, showing the power of diversification.

In addition, individual commodity futures have generated higher returns than spot commodities, on average beating Treasury bills by 1% per annum over the long-run.


3) Verdi Trade Union’s strike interrupts hundreds of flights in German regional airports

The majority of flights in German regional airports on Monday have been grounded due to the strikes by the Verdi trade union.

The Düsseldorf airport reported on Monday that only 89 flights of 330 were taking place, 29 flights were diverted to other airports, and seven flights were rescheduled for the next day, while the Cologne Bonn airport said only two of the 136 flights could be operated as planned.

These strikes hit the major European economies, including France, Britain, and Spain, due to the hikes in energy and food prices that had affected revenues and living standards after the COVID-19 pandemic and Ukraine’s war.